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French Version

Outdated Iraqi stock exchange rising slowly but steadily

With banks in vogue baghdad bourse attracts fledgling investment

"I prefer bank stocks - they have a future," says a punter at the entrance to the Iraqi Stock Exchange, located in a converted house that is guarded like a fortress against insurgent attacks.

Bank shares account for 16 of the exchange's 87 listed companies, but make up half the combined $1.4-billion capitalization and a full 87-percent of turnover.

"Banks are in vogue right now," says Fadel Ali Akbar, a 42-year-old broker for the Iraqi bank Dar as-Salaam.

"Their prices are rising thanks to entities in the Gulf, which have so much money to place in emerging markets."

Despite Iraq's bloody insurgency and the snail's pace of the political process, the market's ISX index has risen from its base of 100 when trading began last June to 111 now.

"More than anything, the market moves on announcements by listed companies and the weekly and monthly bulletins we publish," said the bourse's director, Taha Ahmed Abdel-Salem, 41.

Investors and brokers confirm this.

"We are sensitive above all to economic rumors, even if we follow politics from a distance," said Dina al-Hashimi, a young trader dressed in jeans and a blue tulle scarf.

Even so, Hashimi, who is director of the investment department at the Bank of Baghdad, said everyone is waiting for a return to security in the country.

He is clearly not alone in his preferences. "If the situation improved, you would see the arrival of foreign investors, but right now they are afraid to come," she said, adding that "everyone is afraid of a suicide attack on the bourse.Akbar agrees.

"Security is more important to the market than politics, because when you have security, foreigners will come, hostelry and services will profit and industry will follow."

That security begins outside in the street, in Baghdad's Karrada district, where civilian guards, pistols in their belts, frisk everyone before they enter.

Taking refuge in the shade outside, small groups of investors share small talk and gossip over a glass of coffee.

They get together every day, even though trading is only conducted for a brief two and a half hours on Mondays and Wednesdays.

Inside, the trading floor is located in a big white room, illuminated with neon lights and divided into two sections.

On one side, up to 200 or 300 men are investors. On the other, brokers, both men and women, move back and forth between investors and white boards on the wall.

Trading is still about as old-fashioned as it can be, replete with shouting and waving of hands.

Tracking is also fairly rudimentary. Each listed share is marked on the board in two columns, one for bids and one for offers. Once a transaction is completed, details are taken into another room for logging on a computer. Trading volume is very modest, ranging between $2 million and $6 million a session. "At the moment, we have 1,000 to 1,500 trades per session, while with an electronic system we could handle 5,000 to 10,000," says Abdel-Salem, adding that is the exchange's ambition.

Amman,04 04 2005
The Daily Star
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