New Iraqi Stock Market

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Iraq has just started its new Stock market. Fifteen stocks available today and thirty by the end of the month. Pepsi Baghdad, Al-Helal Industry, Dar-Al-Salam bank, Al-Kazer Construction are a few of the ones available for investment today

Iraq— What are the prospects of Arab stock markets in the second half of the year? How optimistic can one reasonably be following the solid performance of these markets in 2003 and the first half of 2004?

The fundamentals suggest that the outlook remains positive. The same bullish factors that underpinned the excellent performance of the region's stock markets in the past year or so are still in place.

These include double digit growth in corporate earnings of listed companies for the first half of 2004 across markets and firm oil prices with an average price this year of Brent crude around $35 a barrel, its highest yearly average since the 1980s.

Excess liquidity conditions are likely to prevail supported by higher government expenditures and more bank lending.

All of this is expected within an environment of low interest rates even after taking into consideration the recent small rise in US dollar and domestic short- term rates in line with US dollar rates.

Our region is growing this year at the impressive rate of more than five per cent, generating a "pull factor" for increasingly more Arab funds to be invested locally, while the lackluster performance of stock markets in the US and Europe and the rising restrictions on investments and travel to the West are acting as a "push factor" encouraging more funds to be repatriated from abroad.

It has become clearer recently that the pool of wealth that is floating amongst the region's stock markets has grown substantially. It is coming mainly from Saudi Arabia and Kuwait and its destination is primarily the United Arab Emirates (UAE) and Oman and have started to target markets in Jordan and Egypt to take advantage of the lower valuation currently prevalent in these markets.

The top performer in the first six months of the year was Qatar, with the index for the Doha stock market up an impressive 33.7 per cent on top of the 70 per cent recorded last year.

Lebanon followed with arise of 30 per cent, reversing the slight decline of 2003.

Saudi Arabia and Oman were the next best performing stock markets in the region posting gains of 28.7 per cent and 26.8 per cent respectively.

The UAE market also attracted considerable buying interest during the first half of the year and closed up 26 per cent.

Egypt ended the first six months of the year up 19 per cent, followed by Morocco up 14 per cent, and Kuwait up 13.9 per cent. Only Palestine ended the first six months of the year in negative territories, down 3.5 per cent.

Iraq has recently started up its new stock market with Fifteen Stocks available and thirty by the end of the month. US Citizens can open an account with either Warka Investment Bank or Investment bank of Iraq. The email addreses are investmentiraq@yahoo.com or warkabank@hotmail.com

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William Burbank