Turkey's MSCI Emerging Market weighting decreases, putting pressure on exchange rates and valuations

(1) Turkey's weighting in the emerging market index was once about 1.5% to 2%. (2) It declined continuously from 2016 to 2021, rebounded to some extent until 2024, and then dropped to about 0.4%. (3) There are various reasons, but fundamentally it includes the weakening of the lira. (4) Valuations saw a downward revision, with the price-earnings ratio dropping from 10–12 times to 4–6 times. (5) The strong performance of the technology sector in emerging markets also lowered the relative weighting of other markets. (6) Going forward, pay attention to the lira's movement, valuation recovery, and the further impact of changes in the internal structure of the emerging market index on Turkey's weighting.