Archive | Mark DeWeaver on Investments and Finance

Now moved to Investment

Iraqi Stocks Bounce Back

By Mark DeWeaver. This week saw a dramatic turnaround in Iraqi stocks. Last Thursday’s selloff (see this post) accelerated into a mad dash for the exits on Sunday, with the RSISX losing 4.3% on virtually no advancing volume and 60% of the trading in limit-down stocks. On Monday the index fell another 3% to bottom […]

The Wrong Time to Panic

By Mark DeWeaver. Iraqi stocks held up surprisingly well for most of this week despite the dramatic loss of much of Northwestern Iraq to extremists. Even following the fall of Mosul on Tuesday, Rabee Securities’ RSISX index was down only 2.6% for the week by Wednesday’s close. And while the ISX index fell 3.3% on […]

Why Two Exchange Rates?

By Mark DeWeaver. Since the Central Bank of Iraq (CBI) began changing the rules for its USD auctions in 2012, Iraq has been operating a de facto dual exchange rate system. (There’s a summary of some of the CBI’s recent rule changes on pages 12-14 of this report from Sansar Capital.) For those with access […]

Does ‘Mental Accounting’ Matter?

By Mark DeWeaver. ISX observers sometimes blame share price declines on people selling their recently listed bonus or rights issue shares. Such behavior would be interesting to document because it seems to imply a departure from perfect rationality. From the point of view of conventional finance theory, there just isn’t any reason to differentiate between […]

In State Banks We Trust

By Mark DeWeaver. 2013 was another strong year for deposit growth at the ISX-listed banks. Deposits at the 19 names that have so far reported year-end financials were up 17% year-on-year as of December 31. (Only BDFD and BELF, which together accounted for 8% of 2012 listed-bank deposits, have yet to report.) While their deposit […]

Iraq’s Missing Market

By Mark DeWeaver. In my last post I argued that Iraqi banks’ high cash/deposit ratios are due to the absence of an interbank market. If that is the case, you might think it would be easy to get the banks to put more of their deposits to work in the “real economy.” Couldn’t somebody (e.g. […]

Are Iraqi Banks Too Liquid?

By Mark DeWeaver. Fund managers visiting Iraq for the first time are often surprised by the large amounts of cash Iraqi banks typically hold. While the Central Bank of Iraq (CBI) requires lenders to hold 15% of their deposits in the form of vault cash and central bank reserves, most hold well over 50%. (See […]

Dinar Boosted by Iranian Election

By Mark DeWeaver. Since the beginning of 2012 the Iraqi dinar has been on something of a roller coaster ride. Changes in central bank policy combined with strong dollar demand from Iran and Syria have twice pushed the market rate above 1280. Both times, subsequent increases in dollar sales at the central bank’s currency auctions […]

Capital Increase Déjà Vu

By Mark DeWeaver. A year ago I wrote a post called “Will the Banks Get More Time,” in which I argued that most of the ISX-listed banks weren’t going to make the central bank’s deadline of June 30, 2012 to reach IQD 150 bn in paid-up capital. I posted pretty much the same thing back […]