The source, who asked for anonymity, said that during the past three months the number of Arab and foreign investors dealing in Iraq stock market through intermediary companies qualified and authorized to conduct all dealings between customers and the market has increased, stressing that the participation of Arab and foreign capital revived the stock market and increased demand for purchase by Iraqi investors, and expected the rise of foreign investment at the beginning of next year.
He explained that the market is getting ready to start the electronic trading sessions through preparing selling and buying halls in a number of major governorates as a first stage, and also give intermediaries intensive training courses in preparation for this matter; it is hoped to begin electronic trading early next year. These mechanisms will be an incentive for increasing demand for circulation by Iraqis and others, in addition to other things that encourage this like the stable security situation in the country, and the laws that guarantees investment.
The source said there are now mediation companies completing the process on behalf of investors, who are first requested to provide some probative papers, before being accredited. So far non-Iraqi investor were mainly from the Gulf, and recently investors from Kuwait, Saudi Arabia, UAE, Egypt and Palestine has been accredited, while non-Arab investors were mainly from American nationalities and there are signs for the entry of funds belonging to investors from European countries. He added that 2007 has been a remarkable year for the Iraqi market which is still looking for the best; the number of shares in circulation until the end of last month reached 141 billion and 648 million shares and the trading volume amounted to 418 billion and 939 million Iraqi dinars, while the number of listed companies within circulation hit 94 companies from different sectors.
In spite of the efforts of the Central Bank to stabilize the Iraqi market, enhance the value of the Iraqi dinar against other currencies, and increase the purchasing power of the Iraqi people, the sudden fall of the American dollar prices last Wednesday by ten points paralyzed the market completely, since it deals primarily in foreign currencies more than local ones. The Central Bank deliberately put forth foreign currencies ten points below the prices of last Tuesday in the Iraqi markets, which made the Bank's clients who were participating in the auction reluctant to purchase, while others rushed to sell their stock of foreign currencies to the Bank at a price imposed by it and which was 1214 dinars per dollar after it was, early this week, 1224 dinars. The number of participants in the auction were 16 banks which came to buy for the benefit of their customers at a sale price of 1216 dinars per dollar, but what happened during last Tuesday's auction was that despite the open quantities offered for selling by the Central Bank, most customers were reluctant to buy for fear of a another decline in the coming days that will result in significant losses in their dealings which are often in foreign currencies; therefore, the sold by the auction was only 11 million and 900 thousand dollars, while some dealers wished to sell to the Bank at the same price for the disposal of their assets, so they sold 40 million dollars to the Bank.
An official in the Central Bank, who preferred to remain anonymous, said about the reasons for this sudden decline in the value of the dollar, "enhancing the value of the dinar is not new; more than three years ago, we have adopted policies in this regard, we have opened the auction currencies and we fully provided the Iraqi market with the dollar for the past period. The price of the dollar when the market was started was more than 1750 dinars per dollar, and during the past period we were able to raise the value of the dinar. (Source)AlSabah