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 was mostly subdued through the dog days of summer but the big development to note is the realignment of interests of regional players in a post-ISIS Iraq with major implications for the Iraq investment story.
The equity market, as measured by the RSISUSD index, ended the month up +0.2% after trading in a tight range following the July sentiment turnaround, in which extremely depressed bank valuations drove locals to step up and absorb foreign selling as highlighted in last month’s piece on Iraq Business News.
However, turnover continued to be low in-line with the last few months (see chart below) while foreign activity was mostly subdued with some re-emergence of selling in banks in the last few days but, at least for now, that has lost its ability to depress the overall market. The low turnover continues to emphasize the early phases of the liquidity recovery in the economy and the market.
However, the most significant development is the broadening of the realignment of interests of regional players in dealing with the root causes of the conflict, i.e. the deep economic and political disenfranchisement, that were such fertile grounds for the rise of extremism.
Following the military resolution to contain the common threat, these would be long-term solutions which will involve significant investments in infrastructure to bring much-needed developments and create prosperity.
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.
His comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.