IRAQ: DECADE OF SANCTIONS LEAVE HEAVY TOLL ON IRAQ'S ECONOMY BUT BAGHDAD STOCK EXCHANGE GOES FROM STRENGTH TO STRENGTH

Record ID: 647492

  • Title: IRAQ: DECADE OF SANCTIONS LEAVE HEAVY TOLL ON IRAQ'S ECONOMY BUT BAGHDAD STOCK EXCHANGE GOES FROM STRENGTH TO STRENGTH
  • Date: 19th July 2000
  • Summary: BAGHDAD, IRAQ (JULY 19, 2000)(REUTERS) 1. TRADERS ON FLOOR OF STOCK EXCHANGE 2. INVESTORS WATCHING FROM BEHIND FENCE 3. (SOUNDBITE)(Arabic) INVESTOR HANI SHAKIR ALI: "It is a successful and good project. It is a state project which is free of taxes." 4. (SOUNDBITE)(Arabic) INVESTOR MU'AID SALEM: "For material profit and saving, both of them." 5. (SOUNDBITE)(Arabic) INVESTOR ABDUL-SALAM AR-RAWEE: "Free speculation and pure business." 6. INVESTOR PLACING ORDER WITH TRADER 7. THE DIRECTOR GENERAL OF THE BAGHDAD STOCK EXCHANGE, SABEH HASSAN AD-DULEIMI, SITTING AT HIS DESK 8. (SOUNDBITE)(Arabic) AD-DULEIMI: "They (the investors) saw that the investment is profitable, the individual companies are excellent and the companies give more profits than the profit price." 9. TRADERS LISTING PRICES ON WHITEBOARDS/ BLANK TRADING SCREEN IN FRONT OF INVESTORS 10. TRADERS RECORDING TRANSACTIONS ON PAPER/ TRANSACTION DETAILS FED INTO COMPUTERS 11. (SOUNDBITE)(English) MUNTHER AL-FATTAL FROM EL AMMAN BROKERS: "The market is going very good locally. It is not difficult for us to work in this market. But, if you want to link it with the international exchange markets, it is difficult. Take into consideration the embargo, the sanctions and there is no equipment - you have no communication with other markets - this is the difficulty." 12. TRADERS ON THE EXCHANGE FLOOR/ INVESTORS WATCHING 13. (SOUNDBITE)(English) AL-FATTAL: "I think, if you invest now in stocks, you will be on top These are not prices for stocks." 14. INVESTORS WATCHING TRADERS. Initials Script is copyright Reuters Limited. All rights reserved
  • Embargoed: 3rd August 2000 13:00
  • Keywords:
  • Location: BAGHDAD, IRAQ
  • Country: Iraq
  • Reuters ID: LVA5QJ0B1BA2HOBDJDWMQLQGOQK
  • Story Text: A decade of sanctions may have exacted a heavy toll on
    Iraq's economy, but - in Baghdad at least - the capitalist
    flame burns brightly. While rampant inflation has rendered the
    Iraqi dinar almost worthless, the Baghdad Stock Exchange goes
    from strength to strength.



    Not quite Wall Street, but what the Baghdad Stock
    Exchange lacks in size and cutting-edge technology, it makes
    up for with enthusiasm.

    Three mornings a week, investors crowd into the small room
    trading room, using binoculars to keep track of stock prices
    as they are scribbled on whiteboards, yelling buy and sell
    orders to harassed traders across a metal fence.

    Anything from 135 to 200 million Iraqi dinars worth of
    stocks change hands each trading morning and the market is
    valued at 19 billion Iraqi dinars. Stock prices for the 98
    companies listed on the exchange range from one Iraqi dinar to
    700 Iraqi dinars for the larger industrial and agricultural
    companies.

    The exchange only opened in 1992, but Baghdadis have been
    quick to catch on to the world-wide craze for stock market
    speculating and the prospect of quick, if modest, profits.

    Mu'aid Salem says he plays the stock market "for material
    profit and saving". Abdul-Salam Al-Hawee says he is attracted
    by the "free speculation and pure business" that the exchange
    represents.

    The Director General of the Baghdad Stock Exchange, Sabeh
    Hassan Ad-Duleimi, says the exchange is popular, because
    investors "saw that the investment is profitable, the
    individual companies are excellent and the companies give more
    profits than the profit price."
    But the exchange's popularity can also be attributed to
    the impact international sanctions have had on the Iraqi
    currency. Before the Gulf War, one Iraqi dinar was worth three
    U.S. dollars. Today, one U.S. dollar buys around 1,900 Iraqi
    dinars on the black market. People are now investing, partly
    as a hedge against further erosion of the currency.

    The market is only open to Iraqi residents, but the
    exchange is in talks with the Arab Monetary Fund to link
    Baghdad with other Arab stock markets.

    But it will take time before the the exchange is able to
    deal with outside investors. Aside from the depressed price of
    Iraqi stocks, the exchange is not equipped to deal with either
    the volume, or the speed of transactions in international
    stock trading.

    There are computer trading screens. If you want to keep
    track of stock prices during trading, you either try to call
    the exchange on Baghdad's notoriously unreliable phone lines,
    or grab your binoculars and head down to the trading floor to
    watch the whiteboards.

    Stock trades are written down and time stamped before
    being handed to input clerks who then record the transactions
    on the exchange's basic computer system.

    "Take into consideration the embargo, the sanctions and
    there is no equipment - you have no communication with other
    markets - this is the difficulty," says Munther Al-Fattal, one
    of 49 brokers registered with the Baghdad Stock Exchange.

    Not that Baghdad investors are bothered by the lack of
    international investors, nor the opportunity to invest in
    blue-chip international companies. As Munther Al-Fattal
    observed before rushing back to the trading floor: "I think,
    if you invest now in stocks, you will be on top These are not
    prices for stocks."
    (dp/lh)

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