Iraq's booming stock market to go high tech

Times:

Dodging the curse of the financial crisis that brought the global economy to its knees, Iraq's soaring stock exchange is about to experience its Big Bang.

Already up by about 30 per cent this year, as investors cash in on improved security and rock-bottom share prices, electronic trading is set to be introduced in a month, a move that investors hope will herald a new bonanza.

At present, mustachioed men in smart suits lean over a wooden barrier that rings the trading floor, squinting at a wall of whiteboards on which brokers scribble the price of stocks while jabbering into mobile phones or shouting to clients. This quaint trade in the shares of potentially one of the biggest economies in the Middle East was due to be phased out a year ago but delays in installing equipment and collecting shareholder information from the 91 listed companies foiled that plan.

Only now is the Baghdad bourse ready for its first wave of automation. Traders expect the new system to boost prices further. They are still recovering from their collapse after years of war. The cheapest stock is a ½ dinar - a fraction of a penny - and the most expensive 100 dinar (6p).

Electronic trading will also help the market to expand. Five companies - three banks and two hotels - have already been suspended from manual transactions and should start to be traded electronically by mid-April. The other companies will move over during the course of the year.

Ultimately, the whiteboards will come down and trading will shift to an adjacent room of computers in lines of booths where stockbrokers will work. One investor, Rashid al-Waili, 64, is eagerly awaiting the revolution. “It will quicken the process of selling and buying,” he said. Current transactions take up to two weeks, while shareholder certificates are submitted to the company, verified and handed to the stock exchange. Electronic trading will complete the deal in five minutes.

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This is a sign of a maturing and independent economy in Iraq after suffering through years of socialism under Saddam and then the chaos that al Qaeda tried to impose on the country. The stocks still seem pretty cheap.