ISX volume reveals big money favorites

As of June 17, year-to-date average daily turnover on the Iraq Stock Exchange (ISX) has remained subdued at just ID 2.2 billion (US$ 1.9 million).  Surprisingly, however, large block trades on just 16 days (8 days in May, 4 in March, and 4 in January) accounted for 48% of YTD total trading.  An easy way to see what the big money has been up to this year is simply to look at what those trades were and who made them.

One thing worth noting is that they were predominantly done by either locals or foreigners trading through local accounts.  Local transactions accounted for 73% of the big trades on those 16 days and involved six names: North Bank (40% of the local transactions), Baghdad Soft Drinks (25%), Iraqi Islamic Bank (23%), Al Mansour Hotel (8%), United Bank (3%), and Babylon Hotel (1%).  About a third of these trades involved locals selling to foreigners, the remaining two-thirds were done with Iraqis on both the buy and the sell side.

Foreign trading accounted for only 27% of the big trades on those 16 days and involved just four stocks:  North Bank (65% of the foreign buying), Bank of Baghdad (27%), Baghdad Soft Drinks (5%), and Gulf Commercial Bank (3%).  These names seem like good candidates for the buy list of anyone hoping to front-run future inflows of institutional investor money.  With the exception of the Gulf Commercial Bank trade, where both the buyer and the seller were foreign, the foreigners were buying in all cases.  This stands to reason as most of the market is owned by Iraqis.  Foreign banks with long term strategic holdings in ISX-listed subsidiaries and affiliates are the only significant non-Iraqi shareholders and they are unlikely to be selling.

Trading in North Bank, which had the largest share of both the local and foreign trading, came to ID 55 bn—23% of YTD total turnover for the entire market.  Foreigners accumulated an 11% stake, leading to a significant diversification of the company’s shareholder base in just a few days of trading.

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