By John Lee.
The continuing war against the Islamic State (IS, ISIS, ISIL), coupled with the decline in oil prices, have reportedly made Iraqi regulators and government more receptive to reforms that would strengthen the economy and the stock market, according to an article in UAE-based The National.
Shwan Taha, head of Rabee Securities, has been pushing for reforms to the stock exchange (ISX) for some years, including the establishment of a custodian bank, and says that the authorities seem to be finally listening:
“The government has to balance the budget, and we are seeing serious efforts towards reforming the country – in both Baghdad and Kurdistan. These reforms would never have been talked about seriously unless there had been a steep decline in the oil price. So this is a blessing in disguise.”
Geoffrey Batt, a US-based fund manager at Euphrates Advisors, agreed, arguing that lower oil prices had forced Iraqi politicians to think seriously about increasing capital formation and stimulating economic growth.
He said that politicians are now open to discussing the privatisation of state-owned banks and utilities, providing tax incentives for private companies that list on the ISX, and establishing a third-party custodian bank:
“The ISX has the potential to attract $10bn-plus of capital into the country if it is properly utilised. At $100 oil, the government could afford to neglect the exchange’s potential. At $50 oil, they have to take it seriously.”
(Source: The National)