Baghdad Bourse debate at Dubai forum

Bankers and financiers, both conventional and Islamic, see the imminent opening of a regulated stock market with more than 100 companies listed by the end of the year as a litmus test for investor confidence in post-war Iraq.

The US-led Coalition Provisional Authority in Iraq has been working for months to get the exchange up and running after it was shut down and listings frozen nearly a year ago. The last official trading day was 19 March 2003, the day before the US launched the war to overthrow Saddam Hussein.

Early next month, the new Baghdad Stock Exchange is expected to open in a disused hotel where it will remain until a fixed site is ready.

In banking circles it is widely predicted that the exchange will relist 10 to 15 stocks a month, with company accounts verified by international auditors and checks made into the background of major shareholders to seek out former regime members.

Atlas Investment Group, a Jordan-based investment bank, has carried out extensive research into Iraq's capital markets. A senior representative of the company will be presenting details at the International Islamic Finance Forum (www.iiff.net) in Dubai next month - a gathering of around 350 executives from more than 38 countries.

The forum takes place from 7 to 9 March and is organised by the Dubai offices of the Institute for International Research in association with Dow Jones Indexes of New York and the Saudi Economic and Development Company (SEDCO).

Atlas has researched all 114 companies set to relist in Baghdad and has also studied the 40 formerly state-owned enterprises that could soon be privatized.

Atlas has concluded that the Baghdad market offers regional and international investors a "prime opportunity" to test the Iraqi market without over-committing in a volatile, high security risk country.

Investors in Jordan, Lebanon and the Gulf states are expressing strong interest in Iraqi equities and international fund managers are looking at some high-risk, high-return holdings to add to their portfolios, say Atlas.

Details of Islamically-structured investment funds set up in Gulf states specifically for the Iraq market along with the legal implications for investing in Iraq are also be discussed at the International Islamic Finance Forum.

"The previous forum provided an opportunity to hear from the first international banker to enter Baghdad after the war," said forum director Chris Mullinger. "That was in Istanbul in September last year. Now, in March 2004 in Dubai, the forum will hear at first hand from those involved in re-establishing an equities market and investment vehicles."