JUNE 2013 - FEAS

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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013 IRAQ STOCK EXCHANGE To speed up the evolution process ISX has successfully accomplished all of 2012 plans. Taha Ahmed AL-Rubaye CEO Iraq Stock Exchange (ISX) established according to the law No. (74) in April 18th, 2004, and start the trading in its 1st session on June 24th, 2004, Using the manual trading with Wight plastic boards. The operation in ISX transferred to electronic trading in April 19th, 2009. The trading operation since 2009 are five trading sessions from Sunday to Thursday. ISX market capitalization is (4.6) billion US$, the number of listed shares is (3712) billion, and the deposit shares are (2985) billion for (85) listed companies. ISX price index for trading shares price: • On 2010 ISX price index closed on (100,98) points. • On 2011 ISX price index closed on (103,11) points at the end of 1st trading session, and on (136,03) points at the end of last trading session. • On 2012 ISX price index closed on (138, 18) points ISX organized the offering of Asiacell in the 3rd of February, 2013. This IPOs will increase the Market Capitalization from (4.6) billion US$ to (9) billion US$ which is the largest IPO volume ever happened in Iraq and the Middle East since 2008. To speed up the evolution process ISX has successfully accomplished all of 2012 plans and is looking forward to accomplish all of 2013 plans by achieving the goals stipulated in this report. HISTORY AND DEVELOPMENT 1. For the period of 1992-2003 the Baghdad Stock Exchange was operating and was well known. The previous Baghdad Stock Exchange was established by the law No. 24 in 1991. The market was related to the government and it listed (113) different companies, some private and others from the mixed sector. During that period, especially in 2003, the market had gained an annual trading volume exceeding, US$17.5 million. However, this market was closed by a decision of its Governing Council in March 19, 2003. 2. Establishment of Iraq Stock Exchange On 18 of April 2004, the temporary law No. 74 was issued. It gave the authority to establish two important capital development bodies concerning financial sectors, they are: A. Iraq Stock Exchange (ISX). B. Iraq Security Commission (ISC). 3. Meaning of Iraq Stock Exchange The ISX is an entity capital market not related or powered by the government. It is directed by a Board of Governors (BOG) and consists of nine members, representing different economic sectors of investment. The market is where the investments, exchange stocks, purchasing and selling takes place. It is considered one of the channels in which funds can flow between persons and commissions through different sectors that may help to mobilize and develop financing and financial channels in order to give readiness for different investments. FUTURE OUTLOOK 1. Organizing (232) trading sessions in average five sessions weekly, and supervised and accurate trading dealings according to rules and electronic trading instructions and disclosure about transactions based the on the effected ratios and Special orders. 2. Publishing daily tickers on ISX Website during trading sessions which has been started in December 2011. 3. Issuing (232) end-of-session daily reports and yearly reports on ISX Website in addition to publishing listed companies guide and financial statements. 4. End-of-session prices published by Bloomberg and Thomson Routers starting from January 2012. 5. Monitoring, surveillance of trading limitations using Cap Formula T+0 which is supposed to be changed to new Clearing and Settlement Cap Formula T+2 instead of current formula T+ 0 after the ISC approval of the Custodian Banks regulations. Inspection plans for all brokerage firms to check files and documents integrity. 6. Electronic trading support for Al-Rabee Brokerage branch in Erbil and Sulimaniya Erbil branch started electronic trading through ISX system since May, 2011. 7. However, Iraq Stock exchange will support any brokerage firms planning to have branches in other governorates. 8. Encouraging the non-listed companies to be listed in ISX. 9. Inviting new firms and select the best five for 2012 to be licensed as brokerage firms. 10. Upgrade ISX electronic trading system to new advanced version from OMX NASDAQ. 11. Representing Iraq Stock Exchange in relevant conferences locally and globally. 12. Holding workshops to educate and encourage investment in ISX. CAPITAL MARKET DEVELOPMENT AND ECONOMIC OUTLOOK GDP in current prices for the year 2011 According to Central Bank report for the year 2011. Iraq’s economy features by oil’s sector contribution to GDP, which is funding 92% of the general budget revenue. That’s why There is a very strong relationship among actual oil revenues and GDP. Oil sector is so affected by global oil demand and global economic crisis associated within the movement of global economy. As happened in 2009 due to global economic crisis. The contribution of industrial, agricultural, and banking sectors in addition to many other sectors are very poor in GDP. We enclose herewith the number of important economic indicator: 1. GDP in current prices for the year 2011 has increased to (211.3) Trillion ID compared to (158.5) Trillion ID for 2010. PAGE 46
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013 IRAQ STOCK EXCHANGE ISX PRICE INDEX 2011, 2012 Points 150 145.18 142.76 142.45 142.46 140 131.67 133.01 126.98 128.29 130 123.67 121.66 120 122.36 122.33 116.44 118.06 110 115.53 116.05 114.22 117.81 117.49 119.12 100 90 Jan 2. Average per capita of the GDP has increased to (6359) Thousand ID for the year 2011 versus (4887) Thousand ID for 2010. 3. Economic activity for the year 2011 has confined on distributive sectors without productive sectors. But still the activities contribution of master sectors like: (Agricultural, industrial, and Electrical) too low. Government contribution to economic activities in GDP: 1. Oil & Mining sector has achieved highest contribution in GDP, so it ranks 1st compared to other activities. As the percentage contribution is (54.7%), which is equivalent to 116.2 Trillion ID, thus recording increase rate of (58%) compared to the previous year. 2. Social and Personal Service sector ranks 2nd with (13.1%) percentage contribution, which is equivalent to 27.9 Trillion ID, thus recording increase rate of (10.3%) compared to the previous year. 127.32 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2011 2012 136.03 125.06 125.02 3. Financial & Insurance activities and real estate services ranks 3rd with (8.5%) percentage contribution, which is equivalent to 18.1 Trillion ID, thus recording increase rate of (16.5%) compared to the previous year. 4. Hotels, Wholesale & single trade sector ranks 4th with (6.6%) percentage contribution, which is equivalent to 13.9 Trillion ID, thus recording increase rate of (14.5%) compared to the previous year. 5. Building and Construction sector ranks 5th with (4.9%) percentage contribution, which is equivalent to 10.5 Trillion ID, thus recording increase rate of (18.7%) compared to the previous year. 6. Transport, Storage and Communications sector ranks 6th with (4.9%) percentage contribution, which is equivalent to 10.3 Trillion ID, thus recording increase rate of (10.1%) compared to the previous year. 7. Agriculture, Forestry and Fishing sector ranks 7th with (4.2%) percentage contribution, which is equivalent to 8.8 Trillion ID, thus recording increase rate of (5.3%) compared to the previous year. 8. Manufacturing industry sector ranks 8th with (1.8%) percentage contribution, which is equivalent to 3.9 trillion dinars, thus recording increase rate of (5.5%) compared to the previous year. 9. Electricity and Water Sector ranks 9th with (1.3%) percentage contribution, which is equivalent to 2.7 trillion dinars, thus recording increase rate of (8.5%) compared to the previous year. Managing the trading sessions Iraq stock exchange organized (230) sessions on 2012 in weekly average five regular trading sessions from Sunday to Thursday plus additional trading times as follows: Clearing and settlement ISX trading rules for transactions clearing and settlement are as follows: 1-Brokers must know numbers of shares for the seller before entered the orders in the system T+0. 2-Buyers must deposit the shares value in the settlement bank before submitting his order. Operation department in ISX update the information for buyers based on the investor account shown in daily settlement bank report. ISX price index and trading shares price limits: 1. ISX price index: By follow up ISX price index for trading shares price: -On 2010 ISX price index closed on (100,98) points. CONTACT INFORMATION Contact Name Ms. Jimmy Afham Toma E-mail jimmy-afham@yahoo.com Website www.isx-iq.net PAGE 47
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JUNE 2013 - FEAS

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