Erbil Stock Exchange eschews ‘gateway’ role

On July 6, the website of Kurdistan’s Peyamner News Agency reported that Iraq’s second stock exchange had “opened” in the Kurdish city of Erbil.  It wasn’t clear what was meant by opening, however.  The Erbil Stock Exchange (ESX) was licensed in February and trading is not due to start until later this year.  I believe the only real news this month was the appointment of board members.  (Hopefully, there will soon be more information available on the ESX website,, but at the moment it is still “under construction.”)

Erbil could potentially play an important role in attracting overseas investment into Iraqi capital markets, a role in some ways analogous to that of Hong Kong as ‘gateway’ to China.  By listing companies from all over Iraq (starting with secondary listings for ISX-listed companies), the ESX could promote itself as a place for local brokers and listed company representatives to meet foreign investors, who would naturally prefer this alternative to visiting Baghdad.  Eventually, the city might even become something of a financial center, with all manner of service providers setting up shop there as well.

Unfortunately, however, this doesn’t seem to be what the promoters have in mind.  The secretary of the high economic council of the Kurdistan Regional Government, Izzat Mullah, told Peyamner that the purpose of the exchange was to facilitate trading in “shares in the local companies of Kurdistan.”  While he added that “it will be a secure place for the foreign investors to keep their money,” without listings from elsewhere in the country the ESX won’t be a gateway to anywhere but the Kurdish region itself.

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