Not all is warm and fuzzy here in the Middle East even though the revolutions of recent months supposedly led to a positive transfer of power in some of the region’s biggest markets.
Sitting here in Istanbul, this side of the Middle East is definitely a much better place.
The Turkish market has already delivered a solid bounce after traders fled the region back in early March, and now the Turkish ETF (TUR, quote) seems to have built a comfortable base around $59 to $60 a share:
However, while the latest round of protests in Egypt look peaceful, the gathering crowds have analysts warning that this market will remain under pressure for the immediate future.
Essam Sharaf, the country’s new prime minister, is making concessions to the populace, but it remains to be seen whether real reform — and a trial for former dictator Hosni Mubarak — will unfold at a pace that keeps the crowd happy.
Nonetheless, the tourists seem to be coming back, and while the Egyptian ETF (EGPT, quote) has dipped 6% in the last three weeks, it is still well above its post-revolution lows:
A little secret about both Egypt and Turkey: neither has appreciable oil, so they trade better when oil prices are in decline.
That is the exact opposite of what many in the market naively believe, and is a macro factor to keep in mind whenever you look at either country.