As I wrote yesterday, Turkey’s stock market and currency recovered sharply after the diplomatic confrontation with the US. The key mover in this is Turkcell, which is in a joint venture with Huawei to install a 5G mobile broadband network in Turkey. Turkcell’s move in the past month accounts for nearly 1,400 index points in Turkey, or about 1.2% of the total index, while the index itself is basically unchanged.

Turkish stocks
Source: Bloomberg

The transformative impact of Chinese technology on Turkey can’t be overstated. Turkey has a 70% smartphone penetration rate, second only to China’s in the emerging world. The finance ministry has a plan to move to a cashless payments system by 2023. Combine fast broadband with e-commerce, e-payments and e-finance, and Turkey is a different economy, linked to China by fast rail.

I wouldn’t buy the Turkish market here — Turkey’s current account still looks dicey and the risk is too high for my appetite — but I did buy a bit of Turkcell for my p.a. The most important point here is the macro implication for China’s Asian expansion.