Agence France Presse, 26 February 2006
The three-storey, cream building on the corner of a Baghdad sidestreet could pass easily as a hotel or cinema, with gun-carrying guards at the door and sandbags protecting it -- a common sight in insurgency-racked Iraq.
But it offers neither accommodation nor movies, for this is Iraq's very own stock exchange, which comes alive every Monday and Wednesday as investors step through the wooden door onto the trading floor after being frisked by the guards.
"I think this is the only place where there is a buzz ... vibrancy in Iraq, where we want to forget our daily worries and do some business," says Rita Eliyas, aged 35 and one of the few female brokers on the Iraq Stock Exchange.
She is not wrong.
Hundreds of investors and dozens of brokers gather in the compact ground floor hall of the building on the only two days of trading for a brisk two-hour session that starts at 10 am (0700 GMT).
The bourse may be way behind the developed exchanges of the world but does share some common rituals -- here trading starts with a sharp ring of the bell -- something that the New York Stock Exchange still does.
As the bell sounds, the hall fills with a sudden rush of energy as hungry brokers rush to the trading floor, shouting and quoting stock prices as their clients -- most dressed in well-pressed suits, others in traditional dress -- watch over each other's shoulders from a distance.
"Bank stocks are favourites these days and of them the Middle East Investment Bank is hot," says Eliyas as she ducks under the arm of a burly, male broker and rushes to the floor to place an order for a client, a sheikh.
Even as she places his order, her mobile phone rings and she takes another from a different client.
Two computers are fixed high on two walls of the hall to indicate the index, though most of the time they appear still.
As the session peaks, brokers literally shove each other out of the way and run to-and-fro between their clients and the floor. Most of the time it's to rub off old stock prices and write new ones on the white boards fixed on the wall, a sign that electronic trading is still far away.
"We are looking at electronic trading," said Taha Ahmed Abdul Salam, the stocky, cigarette-smoking chief executive officer of the exchange who sits in a smart, first floor office.
"We have just moved into our own building ... let the political situation and security stabilise and then we are sure we will be the key financial institution in Iraq."
The exchange began business nearly two years back, replacing the now defunct Baghdad Stock Exchange which was riddled with corruption and often manipulated by officials of Saddam Hussein's regime and members of his family.
Initially operating in makeshift halls, the bourse opened in the building in the Kharada area of Baghdad in 2004.
"Many Iraqi banks, companies and stockbrokers have their offices here and so we decided to shift here," said Salam. "This does make us a potential target but we have been lucky, though bombs have gone off in nearby areas.
"Only a few weeks ago there was a bomb attack at a nearby church. Nobody is safe in Iraq but those who come to the exchange are small investors, while the rich give orders by phone."
Despite these concerns, Salam paints a rosy picture.
At least 80 companies are currently listed on the exchange and its market capitalisation has doubled to 2.14 billion dollars at end of 2005 compared to 1.15 billion dollars a year earlier.
Salam said a number of new issues have been floated by the companies in the past 18 months -- mostly by financial companies -- considered a "relatively safe" sector by hungry investors.
"Many foreign banks were striking alliances with Iraqi banks like Dar El-Salam Investment Bank has a joint venture with HSBC," he said.
At the moment the market is, however, bearish.
The index closed in 2005 at 46 points but has lost ground over the past weeks.
"We need more money," said Nabeel Abbas, 35, a doctor by profession who runs a pharmacy in Baghdad and also dabbles in stocks.
Abbas, who has nearly 100,000 dollars' worth of investments in the market, invested over the past five years, is worried about the security situation in the country and shortage of trading funds.
For him the market was steady during the Saddam regime, though it offered smaller returns.
"But now because of these deficiences there is extreme volatility and also rich investors are getting out and leaving Iraq," said Abbas, dressed in a smart brown suit.
But he offers a solution too.
"Open the market to foreign investors and get money into the market," he said, adding that the government seemed scared that a big foreign investor could swallow the whole market for a few billion dollars.
Brokers, however, continue to be upbeat.
"The market is bearish but then so what ... I like the rush, the frantic pace on the floor and I have been doing this for the last 10 years. I wish we had more money and tradings every day," said the short, chirpy Eliyas.
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Citation: "Dealing in stocks behind Baghdad's sandbags," Agence France Presse, 26 February 2006.
Original URL: http://news.yahoo.com/s/afp/20060226/ts_afp/iraqeconomystocks
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