The establishment of the ISX is a product of the interim securities law, passed in mid-April, which decreed the formation of a regulator – the Iraqi Securities & Exchange Commission – to oversee the bourse. The commission’s board includes representatives from the Finance Ministry and the Central Bank of Iraq, but has ministerial status, reporting directly to Prime Minister Iyad Allawi. Only 33 companies are currently listed, compared with 114 before the war, but many more listings are in the pipeline. ‘Stocks are listed in batches of five or 10, and 40-50 companies are on the point of being listed,’ says Maria-Gabriella Khoury, head of research at Jordan’s Atlas Investment, the investment banking arm of Arab Bank. ‘As a condition of relisting, companies are obliged to provide 2002 financial results audited to international standards, which is slowing down the process for certain firms that still haven’t published results for that year.’

Foreign nationals are theoretically permitted to trade on the ISX, although the logistics of their doing so remain tricky. ‘Given the current state of shareholder records, it is uncertain whether foreigners have actually begun to buy into the ISX,’ says Khoury. ‘And although local brokers are sophisticated they are forced to cope with a very primitive system – and the bourse only trades for two hours twice a week.’ The authorities aim to have online trading up and running in about a year. A project is also on the drawing board, conditional on the availability of funds, to build a new four-storey home for the exchange.

Consumers and traders alike are fond of their fizzy drinks. One of the biggest stocks is Baghdad Carbonated Beverages– holder of the local franchise for the US’ PepsiCo. On 4 July, the company’s shares were trading at NID 9.5 ($0.006). By 29 July, their value had more than doubled to NID 21.5 ($0.014). The private banking sector has also done well, particularly Iraqi Middle East Investment Bank, whose shares doubled in value on the first day of trading, and Warkaa Investment Bank. ‘The banking sector has done well partly because their buildings generally suffered little damage during the war and therefore they were able to resume normal operations quite quickly,’ says Khoury.

In a further effort to develop the local capital market, the government plans to list sovereign bonds on the ISX, the first of which was issued in late July, worth NID 150,000 million ($100 million). Fortnightly issues are planned. The paper was oversubscribed – not bad for a borrower with outstanding debts of $120,000 million. Amid the gloom of unrest and reconstruction delays, investors at least are demonstrating some hope in the future.