BAGHDAD, 18 July 2004 — Iraq has the potential to become the Japan of the Middle East and its revamped stock exchange, which is already trading at record volumes, will soar as a result, executives at the bourse predicted Friday.
But it will take time, they admitted, as the interim government struggles to end a 15-month-old insurgency that bred chaos during the US-led occupation.
“Iraq is a very rich country potentially,” Talib Al-Tabatabie, chairman of the bourse, told a news conference at the well-guarded stock exchange building tucked away behind a large hotel in the center of Baghdad.
“It needs only efforts to redevelop it again and you will have one of the richest countries in the Middle East,” he declared, noting the country’s rich oil, water and other natural resources. “Iraq is by all means a futuristic country. ... I have a strong faith that the economy of Iraq will be one of the healthiest, strongest economies in the Middle East and that of course will be reflected in the stock exchange,” he said.
“If I am to be permitted to dream ... Iraq will develop into the Japan of (the Middle East), and it wouldn’t take a long time.” The product of more than a year’s work by 12 brokerage firms and banks that jointly own it, the Iraq Stock Exchange has 27 listed companies, with about 100 more due to go public in the next month and a half, the executives said.
These firms have an automatic right to float as they were part of the former Baghdad exchange, which was dissolved after the March 2003 US-led invasion, but new companies are also clamoring for a piece of the action. “The total number of listed companies by the end of this year is expected to be around 180 or 200 companies,” Tabatabie said.
In its first morning of business on June 24, more than 500 million shares were traded - more than the Baghdad Stock Exchange ever achieved - with shares in just six companies changing hands, and the volume is expected to keep rising, said Chief Executive Taha Abdulsalam.
Twelve companies actively traded on the second session on Sunday, July 4.
Their aggregate share price at the end of the morning was $2.66 million, up from $2.21 million at the start, for a 20 percent rise, the exchange said in a statement, adding that 560 million stocks changed hands.