By Ahmed Tabaqchali (pictured), CIO of Asia Frontier Capital (AFC) Iraq Fund.
Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
The equity market, as measured by Rabee Securities’ RSISUSD index, followed the theme of the prior month with declines deepening on continuing low turnover, down by about -4% for the month but higher than the worst point a few days earlier when it was down -7.7%.
The average daily turnover (regular turnover excluding block/arranged transactions by insiders/strategic holders whether local or foreign) has been slightly higher than last month. The data is as of May 25th, with one week to go for the month, but the last trading day before Ramadan during which turnover is expected to decline further and most likely follow a continuation of the recent theme.
Net foreigner turnover which was negative in April has become somewhat less negative as the chart below shows. However, what it doesn’t show is the net figure is made up of expanded selling with the avg. daily sells for the last 3 weeks at 1.4 x the average daily sells of the previous 10 weeks but the average daily buys of the last 3 weeks at 7.5x the very low average daily buys of the previous 10 weeks.
However, the chart clearly shows that there is no sustainable trend, as of yet, suggesting the selling is limited and nowhere near the persistent and widespread selling of the prior year but also that there is no new cycle of foreign interest in Iraq.
Mr Tabaqchali is the CIO of the AFC Iraq Fund, and is an experienced capital markets professional with over 25 years’ experience in US and MENA markets.