The Iraq Stock Exchange was incorporated and began operations in June 2004’. It operates under the oversight of the Iraqi Securities and Exchange Commission, an independent commission modeled after the United States Securities and Exchange Commission.
Before the 2003’ invasion it was called the Baghdad Stock Exchange and was operated by the Iraqi Ministry of Finance. Now it is a self regulated organization similar to the New York Stock Exchange, owned by the 50 or so member brokerage firms.
As of 2005, the ISX was Iraq's only stock exchange. It opened in 2004 with 15 companies, and now lists more than 100 companies. Turnover of shares in 2005 was approximately $5 million USD per trading session. Major stocks included Baghdad Bank, Baghdad Beverage, Iraqi Tufted Carpets Co, Hader Marble, and Altherar Agriculture.
Aswat al – Iraq news agency covers every trading session with reports published on the web in English and Arabic.
Trading was with pen and paper. Buyers shouted at or called into their brokers, who stood near their whiteboards that listed each company's share buy and sell price.
That changed in February 2008, when for the first time since it was launched in the mid-1990s, the Iraq Stock Exchange announced that it would have a computerized system to show the movement of shares. Iraqi Exchange and Securities Commission Chairman Abdul-Razzak al-Saadi said that the new system would replace two blackboards that are manned by personnel using chalk to record all changes. Al-Saadi said a $7 million grant from international donors enabled the stock exchange to buy the electronic system.
Trading was suspended for several months in 2006 due to violence and power outages.
In 2006’ 92 trading sessions were held (an average of 2 per week), 57 billion shares were traded (at a value of 146 billion dinars), and 38,000 trades were consummated. The trading floor is open Sunday, Tuesday, and Thursday from 10:00 a.m. - 12:00 noon, six hours a week.
The ISX opened to foreign investors on August 2, 2007. The market is dominated by a handful of wealthy Iraqis, many of whom live outside the country and call in their orders
by phone to brokers, says Taha Abdul Salam, the exchange's CEO. Foreign investors in late 2008’ accounted for less than 10% of activity.
The ISX has been unaffected by the economic crisis of 2008’ which devastated the United States and other countries. On April 19, 2009, the ISX started testing their electronic trading with a handful of stocks. Currently, only five companies are available for electronic trading, but more will be added over the next few months.
Market capitalization currently stands at $1.8 billion dollars, with 61 companies currently trading electronically on NASDAQ OMX trading platform, all companies are scheduled to complete the transfer into the new platform by the end of November 2009. The ISX is preparing to link its exchange with several regional exchanges, including an ETF available in all NASDAQ OMX exchanges. Iraq Treasury Bills and corporate bonds are proposed to trade in a secondary market on the ISX.
Washington, D.C. hosted an Iraqi Investment Summit on October 20–21, 2009. Investment and IPO contracts of up to $500 billion dollars are proposed for offering. Major US banks and international investment firms like JP Morgan Chase, Citi, HSBC, Lazard, and Goldman Sachs will be present to possibly announce joint ventures from negotiations that started during the London economic conference on Iraq held earlier this year.
The ISX index started the 2010’ year at 90 down from a reweighed index value in September 2009’ of 117. This market is currently undervalued when compared to the region, as Palestine sits at 530, Tel- Aviv 1170, Beirut 1,500, Saudi Stock Exchange 6400, Dubai Financial Market 1600, Abu Dhabi Securities Market 2750, Bahrain 1500, Muscat 6700, Doha 6900, and Kuwait 7,300. Some analysts in the Middle East say the ISX index could go up by twenty times, bringing it towards 2000.
With Iraq floating on a sea of oil and a new political landscape, this economy is poised to outpace the region in growth. Iraq's stock exchange on Sunday, November 2, 2009 moved to electronic trading every day of the business week for the first time, in a step towards embracing the modern world of international finance. This is a huge move for the country and a step in the right direction to attract foreigners to invest in the market. The exchange is state of the art technology and was modeled after the NASD and Malaysian stock exchange.
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