The chief executive of the Iraq Stock Exchange (ISX) believes secondary listings for local companies on bourses in London and New York would eventually attract extra liquidity and boost trade.
"That is the long-term strategy," said Taha Abdulsalam, the chief of the bourse in Baghdad. "It's not going to happen overnight, but the plan is to aim to develop the same standard of bourses and companies outside."
Mr Abdulsalam said that Iraqi companies needed to improve their disclosures, and the timing of them, along with the level of corporate governance. They must also ensure controls are implemented for insiders. Companies have already adopted the International Financial Reporting Standards system, he added.
Listings and prices have grown dramatically on Iraq's stock market since the United States invaded the country in 2003 and the previously state-dominated economy opened up to private investments.
Until last October, the ISX had benefited from seven years of consistent gains as foreign investors and hedge funds bought up shares with the expectation that the oil-producing state would enjoy an economic boom. But the index has shed 21 per cent of its gains since then amid political volatility after the withdrawal of US troops in December, with daily traded value at US$2 million (Dh7.3m).
Mr Abdulsalam said the market had the potential to grow once Iraq eased its reliance on the oil sector for growth.
"Iraq's stock market has the potential to grow to the size of Saudi Arabia, it has the oil, a huge population and very diversified sectors," said Anastasios Dalgiannakis, the head of institutional trading at Mubasher Financial Services in Dubai, which last year signed an agreement to offer live prices for the exchange.
"But many investors are waiting for a foreign custodian to operate in Iraq," Mr Dalgiannakis said. "Investors are willing to take the risk and invest in Iraq, but not take additional counter-party risk."
In March, the ISX mandated that any bank, foreign or local, could apply to a custodian of investor assets. The exchange is in talks with two international investment banks, and expects a resolution in the next four months, Mr Abdulsalam said. He declined to name the banks.
If the main telecommunications companies listed on the exchange, he said, the market's capitalisation would double overnight from its current level of $4 billion. Three mobile companies now operate in Iraq: AsiaCell, in which Qatar Telecommunications has a 30 per cent stake; Korek, in which France Telecom and the Kuwaiti logistics group Agility have a 44 per cent stake; and the Kuwaiti telecoms group Zain.
Mobile operators in Iraq have been under pressure from the government to list their shares under the terms of the licence bought in 2007.
"Until now, they have not given any request to list on the stock exchange," Mr Abdulsalam said.
halsayegh@thenational.ae
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
How to increase your savings
- Have a plan for your savings.
- Decide on your emergency fund target and once that's achieved, assign your savings to another financial goal such as saving for a house or investing for retirement.
- Decide on a financial goal that is important to you and put your savings to work for you.
- It's important to have a purpose for your savings as it helps to keep you motivated to continue while also reducing the temptation to spend your savings.
- Carol Glynn, founder of Conscious Finance Coaching
Tailors and retailers miss out on back-to-school rush
Tailors and retailers across the city said it was an ominous start to what is usually a busy season for sales.
With many parents opting to continue home learning for their children, the usual rush to buy school uniforms was muted this year.
“So far we have taken about 70 to 80 orders for items like shirts and trousers,” said Vikram Attrai, manager at Stallion Bespoke Tailors in Dubai.
“Last year in the same period we had about 200 orders and lots of demand.
“We custom fit uniform pieces and use materials such as cotton, wool and cashmere.
“Depending on size, a white shirt with logo is priced at about Dh100 to Dh150 and shorts, trousers, skirts and dresses cost between Dh150 to Dh250 a piece.”
A spokesman for Threads, a uniform shop based in Times Square Centre Dubai, said customer footfall had slowed down dramatically over the past few months.
“Now parents have the option to keep children doing online learning they don’t need uniforms so it has quietened down.”
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