War-torn Iraq is expected to attract more overseas investment this year after foreigners were net buyers on its stock exchange in 2010, snapping up $53 million worth of shares, the market's head said on Sunday.
Taha A. Abdulsalam, chief executive of the Iraq Stock Exchange (ISX), said foreign investors were showing interest across the board's 85 listed companies and this was expected to increase as sentiment improved after the formation of a new government.
"They (foreigners) bought about 36 billion shares and they sold only 5 billion shares," Abdulsalam told Reuters in an interview. "I believe the numbers will be increased (this year)."
He said foreigners - mainly from the United States, Europe, the Gulf and Egypt - had bought 62 billion Iraqi dinars ($53 million) worth of shares in 2010. Eight billion Iraqi dinars worth of shares had been sold, he said. Iraq's battered infrastructure is in desperate need of investment as the country slowly gets back on its feet after decades of war and economic sanctions.
Foreign firms have started putting money into the oil-rich country but overall security and red tape remain concerns as US troops withdraw from the country eight years after the 2003 US-led invasion.
However, the formation of a new government more than nine months after inconclusive elections has raised hopes amongst foreign investors of greater stability in the country, Abdulsalam said. The ISX, which started operating in 2004, is a rare outpost of capitalism in a country dominated by state companies. It moved from manual to automated trading in 2009 and opens for trading for two hours a day, five days a week. Each trade takes around 8 seconds to process.
The banking sector is the largest on the bourse, which also lists industrial, insurance, hotel and agriculture firms.
The total market value of shares listed on the bourse is around $3 billion, which Abdulsalam said he expected would increase in 2011. Abdulsalam, who has four children and graduated with a masters degree in economics from Baghdad University, said he anticipated that trading volumes, which totalled 400 billion Iraqi dinars in 2010, to be higher this year.
The 47-year-old chief executive said the daily volume of trades so far in 2011 had so far averaged between $2 million to $3 million compared to $1 million to $2 million in 2010.
"There are many investors coming to the stock exchange ... The last two sessions were more than $3 million. The last session (Wednesday) was about $6 million," Abdulsalam said. "At the end of this year, I believe the figures will be more than 2010."
Abdulsalam said he expected up to 10 new listings, mainly banking and industrial stocks, on the bourse this year.
He also said he hoped to get the ISX onto the World Federation of Exchanges this year, and expected real-time data from the stock exchange to be available on its website www.isx-iq.net in the next six months.