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Bridges To Babylon: New Fund Focuses On Iraq
Fin Alternatives - [10/02/2007]
Foreign investors are not yet allowed to trade on the two-and-a-half-year-old Iraq Stock Exchange—“They have said, ‘within six months,’ for the last two-and-a-half-years,” Englund laments, though he adds optimistically, “there is a possibility it will happen by the end of the year, but nobody really knows”—so you need locals on the ground.
Englund’s colleagues in the war-torn country are directors Ismail al-Rashidi and Fouad Cheragwandi, the former an ex-vice chairman of the Iraqi Federation of Industries and one-time Iraqi delegate to the World Trade Organization. He’s also co-founded a number of banks in Iraq, including the Commercial Bank, Economic Bank of Iraq and Investment Bank of Iraq.
For now, trading on the Iraq Stock Exchange is a decidedly small-scale affair. Its total market capitalization is just US$2 billion—half the size of Jordan’s—and it trades for only two-and-a-half hours a day, twice a week, on Mondays and Wednesdays. During those sessions, Englund says, only about a quarter of the roughly 80 securities listed on the exchange trade, with a total turnover of between US$2 million and US$4 million, at best, which is less than half the size of the fund.
“One of my worries,” Englund admits, “is that we might end up a strategic player, and that’s not our intention.” So, to blunt the force of his fund on the market, only about a quarter of its assets will be invested on the ISX. Another quarter will be invested directly in Iraq through a combination of internationally-traded Iraqi bonds, dinar-denominated six month Iraqi Treasury bills and some private equity investments. The rest will be invested in foreign companies that do business with Iraq.
Englund suspects that once the foreign investment restrictions are lifted, the floodgates will open. “There is a lot of interest from foreigners to enter the Iraq Stock Market,” he says. “But now you have to get around [the restriction], and many people don’t want to take that risk.” There are also concerns about a lack of transparency, but Englund argues that such risks are the nature of the emerging market—without them, there wouldn’t be the fantastic returns that investors often see in developing economies.
“Many people complain that you cannot find the stock price on the Iraq Stock Exchange on the Internet. You cannot find the data,” he says. “But when you have that, the market has already risen 100% or 200%. There are a lot of unknowns here.”
From what I understand is that right now it is legal to play the ISX under a Wharka name but I haven't heard of any american broker doing it but they can't do it until the Investment Law is put into play. That is what a lot of ISX investors are doing right now is having it in the establishments name until that law is put into effect.
I think he was asking about American firms that you can invest with.
As for Warka Bank..yes they will invest your money in the stock market.
But its not under your name...and technically (while I am not an attorney)...most likely not legal under Iraqi Law. Warka might get away with doing it...but they might not.
But if people want to take a flyer...its available.
(Just my Unedumacated Opinion!)
From what I have seen is that you can place an order under their name until the Investment Law is put into place. With Wharka Bank I think.
Not sure. Although if the system is electonic...you would think they would eventually be hooked up internationally just like any other Financial Market.
At first though I'm sure its brokers like Aman Financial that will take the bulk of the orders.
My guess is that brokers in Kuwait will be right behind.
If I find out anymore, I'll let you know.
I am fairly heavily invested in the DINAR and am interested in the Iraqi stock exchange. Do you have a guess as to whether we will be able to use U.S. brokers when it trade electronically, like Schwab, etrade, etc.
Iraqi Dinar to rise vs dollar....
http://www.iraqdirectory.com/DisplayNews.aspx?id=2947
Nice Site for DD.
This is a great site to do DD on all the companies on the ISX. Although it isn't always updated on a regular basis.
Still it will give you a nice feel for the market.
http://www.isx-data.com/
Old article (but nice background info).
http://www.iraqdirectory.com/DisplayNews.aspx?id=562
Here is an investment company for the ISX.
Please do not contact them now as they are unable to open accounts for foreigners.
However, as we get closer, keep them in mind.
If anyone has other brokers, please feel free to post.
I am not recommending them, but they are the only reputable broker I know at the moment.
http://isx-aman.com/
No problem. I'll post articles here as I come across them.
That is awesome, I have heard a lot of talk about the ISX for awhile now and I am willing to hear all the DD on it. Thanks
No problem with the question.
As of now foreigners CANNOT invest in the Iraqi Stock Exchange.
However, the stock exchange is scheduled to open in April of 2007 to foreign investors.
This board is being setup to try and educate investors about the various stocks in Iraq and keep them up-to-date on their movements until the market opens.
There is one loophole for getting into the market. That is to setup an Iraqi Corporation and have that Corporation invest in the market. But you must have an Attorney in Iraq to set up the corp. and an Iraqi national must own at least 5%.
But with the market scheduled to open soon...I don't think I'd go to this expense or trouble. I would just watch the market and try to get information on the stocks prior to purchasing.
What I wanted to do with this board is concentrate on the various stocks that will be traded when the ISX opens.
For now I think we should start with the banks as they will see the largest growth explosion.
For instance, Credit Bank of Iraq, and Dar El Salaam Bank both announced partnerships with foreign banks.
When these partnerships were announced the banks stocks went from approx 7 dinar a share to 80 dinar in 1 day.
Since then they have had several splits.
Credit Bank for instance this January is paying a 1 for 1 dividend. For every share you own...they give you an additional share free! (Nice Dividend).
I believe that several banks will have parnterships once the Foreign Investment Law goes into affect....(1st quarter of this year).
IMHO there is a boatload of money to be made for those willing to take risks.
Check out these sites, I am more familiar with their currency than anything else. Somebody might know on my board as well.
IRAQ DINAR BOARD
http://www.investorshub.com/boards/board.asp?board_id=7851
ISX
http://www.investorshub.com/boards/read_msg.asp?message_id=15860234
Ladies and Gentleman,
Please do not slaughter me on this? I am new to the pinks. But how do you invest in this Iraqi Stock exchange?
As you can see from my screen name - OIF2006 - that stands for Operation Iraqi Freedom 2006 - the year I spent in that hell hole.
This exchange has NO other option but to go because of the money I saw FIRST hand being dumped into that shit hole by the US government. I believe that we are in Iraq for a longer period of time because of the money we have dumped into it. I also believe that once the oil is released from the UN embargo - the rest is history.
With that being said, what is the ticker symbol for this - how do you invest. I hate to sound ignorant to the fact, but Im a soldier - not a brooker.
Shawn
I would like to know more about the ISX since I am heavily invested in the Dinar. I haven't done a lot of DD on this issue. I know it is talked a lot about on the other Dinar forums.
Thanks man...
and yes the rate has dropped to 1315 now. So it continues to look like a great investment.
As long as they get security straightened out.
I have heard that if you get in it right now it will explode just because you will be playing the market at the current rate of 1318 or lower and when their currency REVALUES. Your investment will go KABOOM. This board should go hand in hand with this board.
IRAQ DINAR BOARD
http://www.investorshub.com/boards/board.asp?board_id=7851
ISX
http://www.investorshub.com/boards/read_msg.asp?message_id=15860234
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