The chief executive of the Iraq Stock Exchange (ISX), Taha Abdulsalam, 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. It’s not going to happen overnight, but the plan is to aim to develop the same standard of bourses and companies outside.“
Although companies have already adopted International Financial Reporting Standards (IFRS), he said Iraqi companies need to improve their disclosures, including timing, and their level of corporate governance, especially with regard to insiders.
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 to 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.
Mobile operators in Iraq have been under pressure from the government to list their shares under the terms of the licence bought in 2007. If the main telecommunications companies listed on the exchange, Abdulsalam said, the market’s capitalisation would double overnight from its current level of $4 billion.
“Until now, they have not given any request to list on the stock exchange,” he said.
(Source: The National)