Foreign portfolio investment in Iraq is increasing; foreigners were net buyers on the ISX in the first 10 months of this year, purchasing 70bn shares for $118mn, according to Abdulsalam.
But such amounts fall far short of the expected size of the telecom IPOs, so local stock market investors would have to bear much of the burden. Local investment is also rising—the market’s main index has gained over 30% this year—but Iraq lacks big institutional investors and pension funds that could reliably channel large amounts of money into the IPOs.
Valuations of the three mobile firms are still being studied but Korek CEO Ghada Gebara has said 25% stakes in each of the three operators would be worth about $5bn combined.
Securities firm Nomura has given Zain Iraq, which has appointed BNP Paribas, Citigroup and National Bank of Kuwait to run its share offer, an enterprise value of $4.9bn.
Nomura has valued Asiacell, whose IPO is being managed by HSBC and Morgan Stanley, at $4.4bn, making quarter-stakes in both firms worth about $2.35bn combined.
Before listing on the market, all the firms must first convert themselves into shareholding companies, and then obtain approval from the ISX board and Iraq’s securities commission.
The CMC has said it is unlikely the three operators will conduct IPOs before the middle of next year.
“We cannot (list) all of them at the same time because each company is different to the other. We know that Zain is a Kuwaiti company. Asiacell is Iraqi,” said CMC Commissioner Ahmed Alomary.
“For a Kuwaiti company to be registered as an Iraqi company, it will take more time than Asiacell. Korek has a new partnership with France Telecom and they’re already working on having their holding company in Dubai. So each scenario is different.”
However, Alomary said it would be best for the companies to work on similar timelines for listing their shares, and to sell some equity as soon as possible.
Korek’s Gebara said it would be better to list the companies one after the other to give the market time to absorb the shares, and that one of the priorities should be to educate investors on how to receive the listings.
“It’s not a race. At the end of the day, we all want to maximise the value of our companies,” she said.
(Source: Gulf News)
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