IRAQ | Economy

[elusive]

please post any Iraqi Stock Exchange, oil sector, any other economic news here...

[elusive]

CBI sells $737 million this week

May 21, 2010 - 11:29:16
BAGHDAD / Aswat al-Iraq: The Central Bank of Iraq (CBI) dollar sales in auctions for this week increased slightly to $737.394 million compared to $735.659 million last week.
“The demand hit $26.760 million in cash, covered at an exchange rate of 1,183 Iraqi dinars per dollar, compared to last week’s $34.230 million, while foreign transfers outside the country registered $710.634 million, covered at an exchange rate of 1,173 Iraqi dinars per dollar, compared to last week’s $701.429 million,” according to a CBI news bulletin received by Aswat al-Iraq news agency.
None of the banks that participated in this week’s sessions offered to sell dollars.
The Central Bank of Iraq runs a daily auction from Sunday to Thursday.
SH (P)

[elusive]

Oil ministry achieves $1 billion surplus in 2010

May 21, 2010 - 08:23:35
BAGHDAD / Aswat al-Iraq: Oil revenues in the first four months of 2010 reached $17 billion, exceeding by one billion the general budget’s expectations, spokesman for the oil ministry said on Friday.
“The oil ministry has exported 222.7 million barrels during the first four months of 2010, which achieved $17.218 billion with an average price of $75.6 per barrel,” Essam Jihad told Aswat al-Iraq news agency, pointing out that the ministry achieved a financial surplus of one billion dollars.
Jihad had said last Tuesday that Iraq’s revenues from oil exports in April have reached more than $4 billion after exporting 53 million barrels.
“The oil ministry has made $4.222 billion from exporting 53 barrels last month,” Jihad said, noting that the average price per barrel reached 79.66 dollar from the Basra oil.
He said that Iraq had achieved $4.351 billion from exporting 57.1 million barrels last March.
SH (P)

[elusive]

ISX down by 0.4% in first session this week
May 23, 2010 - 02:04:43

BAGHDAD / Aswat al-Iraq: The Iraqi Stock Exchange (ISX) index went 0.4% down in the first session this week to close at 93.7 points as rates of shares of 21 out of a total 37 traded in the national capital market decreased.
Sunday’s session saw more than 535.357 million shares exchanging hands at 693.405 million Iraqi dinars through 153 deals with non-Iraqi investors grabbing seven purchase deals worth 18.4 million dinars over the banking, industrial and hotel sectors.
Thirty-seven out of a total 84 electronically-registered companies traded shares during today’s session, 21 of whom went down, four up while 12 retained their previous rates.
The banking sector took the lead with 70% of the overall trading through 49 deals worth 490 million dinars over 11 firms, followed by the hotel sector with 20% through 24 deals worth 131 million dinars over five firms, the industrial sector with 6% through 48 deals worth 46 million dinars over 13 firms and a poor trading over the service, investment and agricultural sectors.
The ISX witnessed its first E-trading session on April 19, 2009 over five registered companies, three banks and two hotels. The banks were: Ashur International Bank (AIB), Al-Mansour Bank and the Iraqi Credit Bank while the hotels were: Ashtar Hotel and Al-Mansour Hotel.
On June 7, 2009 the Iraqi Middle East Investment Bank and the Warka Bank joined the electronic trading sessions.
The ISX now holds five sessions from Sunday to Thursday.
AmR (S)

[BigDreamer]

I don't think many people follow the ISX at this point. It's still very small, and doesn't even exhibit market behaviour due to its size. not to mention insider trading and market manipulation issues.

But I do think the situation will change once the economy gains traction, and more companies start listing on the ISX

[BigDreamer]

Iraq May Maintain Growth of 7% This Year

May 21 (Bloomberg) -- Iraq may maintain an economic growth rate of about 7 percent this year, led by oil, Central Bank Governor Sinan Al-Shabibi said.

Growth was about 7 percent as well in 2009, al-Shabibi said in an interview yesterday at an economic conference in Beirut. “Of course oil output is still the main driver,” he said.

Iraq holds the world’s third-largest oil reserves, with 115 billion barrels, behind Saudi Arabia and Iran. The International Monetary Fund said it expects the economy of Iraq to expand 7.3 percent this year and 7.9 percent in 2011.

IMF and Iraqi authorities are projecting average production of 2.6 million barrels of oil per day with exports of 2.1 million barrels a day this year. Next year, the projections are for output of 2.9 million barrels a day and exports of 2.3 million a day.

The central bank cut its key interest rate by 1 percentage point to 6 percent in April to fuel growth.

Al-Shabibi said the bank has received requests from “six or seven” lenders seeking to set up units in Iraq or a partnership with existing banks in the country.

“We look favorably on any application,” he said without elaborating
http://www.businessweek.com/news/201...bank-says.html

[elusive]

Originally Posted by BigDreamer

I don't think many people follow the ISX at this point. It's still very small, and doesn't even exhibit market behaviour due to its size. not to mention insider trading and market manipulation issues.

But I do think the situation will change once the economy gains traction, and more companies start listing on the ISX

yeah i agree, also when the dinar is revalued, things will change dramatically.

[sheytanElKebir]

Originally Posted by elusive

yeah i agree, also when the dinar is revalued, things will change dramatically.

you mean devalued, as the plan is.

since the last government gave too many pay rises to state employees (denominated in IQD), the only way to claw that back and have some funds for capital projects (like rebuilding the country, for example) is to DEVALUE the salaries of all state employees.

a straight pay cut will result in revolt.

so devaluation is the only way.

I bet this will make all the thousands of unfortunate foreign "dinar hoarders" cry. but its the economic reality. - these misguided souls based their entire "dinar game" on what happened in Kuwait, completely ignoring the 180 degree difference in the economies of the two countries...

[elusive]

by devalued do you mean the dinar would be worth more in terms of the US but worth less than it is now for the iraqi people and investors?

[sheytanElKebir]

Originally Posted by elusive

by devalued do you mean the dinar would be worth more in terms of the US but worth less than it is now for the iraqi people and investors?

what I mean is that currently the Dinar is about 1175 to the dollar. and prudent economics means that the government will want to make it around 1500 to the USD. The central bank is lowering interest rates as we speak. So anyone who bought into dinars at 1400 with some hallucination that for some unbeknown reason the government was going to blow away tens of billions of dollars to bring it up to parity with the USD in effect giving those tens of billions of dollars to these amateur speculators.

thats the entire basis of the silly "dinar investments" and some iraqi banks have encouraged foreign amateurs by having "dinar" forums and spreading all kinds of nonsense about "revalue and give you $1000 for your one $1 invested!". Top of the guilty, of course are no other than the perpetually crooked and terrorist funding Bunniyas via their warka bank and various forums on the internet. the less said about the bunniyas and their long term destabilisation of iraq via the wholesale use of bribery in government contracts going back 3 decades (and in effect they were the initiators of the "corruption culture" prevalent in Iraqi government contracting).

they should have their citizenship revoked and shipped back to Pakistan after a few decades of hard labour in nigret al salman.

[sheytanElKebir]

I posted this comment first on the thread about the opening of the Erbil Rotana hotel. But I think its relevant to this thread:

I saw today the announcement of the imminent opening of a Rotana brand hotel in Erbil, and more such hotels in Baghdad and other parts of Iraq being under construction. - What made me sad however is the naive gloating of the Iraqis about this "achievement".

I hope that one day we can establish a large "Iraqi brand" hotel with a portfolio across Iraq and the world and listed on the Baghdad stock exchange.

For the moment, these international hotels are repatriating all profits out of Iraq. if we don't have local companies with taxes/iraqi listing we will go down the route of the "new" EU states who end up asset stripped.

Kurdistan should set up its own large "hotel group" to manage tourism projects locally by pooling both government and private equity in a (local) exchange listed company... By combining government shareholding as well as private management and public listing the Iraqi/Kurdish hotel group can ensure that it operates efficiently in a market economy, focuses on customer service and pays its taxes and dividends to the Iraqi treasury and Iraqi stock holders!

This point applies to all aspects of Iraq's economy, not just hoteling. I am seeing today in Iraq exactly what happened in eastern europe after 1990. Today they are all simple cheap employees for large foreign companies that are tax exempt (the east europeans then, like the iraqis today, were desperate for foreign "investment" and gave ludicrous incentives to the western companies), and simply pay pittance salaries to locals whilst reserving all highly paid positions (of which there are very few) to their own nationals - meaning very little trickle down to the average citizen.

I can unfortunately already envisage iraq in about 2025 where all the citizens are heavily in debt, surviving day-day with no savings and the treasury being almost bankrupt, whilst the country is full of grandiose hotels and malls - all foreign owned - with the BSX still being a joke and very little iraqi intellectual or monetary capital in the private sector.

Iraq needs to make sure that:
-they focus on having only one stock exchange - since we can't have the ludicrous fragmentation of having multiple exchanges like some people are calling for now.
-creating a "development fund for iraq" from the oil proceeds which are distributed as shares per capita to every citizen, which is redeemable by their next of kin on death only. during their lifetime, the citizens receive an annual dividend that can be collected as "tokens" to purchase products and services from any one of the group of companies that the "development fund" is invested in.
-having this development fund invest in joint ventures with foreign and local entrepreneurs in both "established" businesses like:
franchising supermarkets/chains/restaurants,
setting up new local chains in the retail sector,
investments in construction and aggregates manufacturing
creating a "public private" integrated transport and shipping company with international reach.
Integrating Iraq's current state industries inside the fund including the Oil companies
The fund should own a maximum of 51% of shares in any company, with the rest of the shares openly traded on the BSX. Iraqi and foreign citizens and establishments can buy shares from this portion of the fund.
Bonds and Debt can be raised from both voluntary "dividend reinvestment" by shareholders or on the international debt markets.

A large part of the fund should be set aside to fund "early phase" local companies and new technologies in:
-Renewable energy
-Farming and irrigation
-Water desalination
-Forestation / ecology
-Bio-Chem industries
-Information and Communications Technology
-Construction technology developments
-Other innovative / new industries where Iraq has a potential commercial advantage


In terms of "assets and Cash" The Iraqi government has at its disposal, as of today the following:
$120Bn in cash in foreign banks and the Central Bank reserve
$150Bn asset value of the 250 state companies (including the oil companies)

at a 51% shareholding in the entire fund can be worth approximately $550Bn as of 2010 with no gearing.

Such a fund will have both the assets, capital and ability to raise debt similar in size to most "sovereign wealth funds" around the world and would ensure that EVERY Iraqi citizen receives his share of the divindend annualy, and upon their death, their next of kin receive the value of those shares in "tokens" usable to purchase any product or service from a "Iraqi development fund" invested company around the world.

New born citizens receive an allocation of shares from a percentage of dividends which are not distributed to shareholders - ensuring no dilution of sharevalue or "pyramid" effect.

The above shareholding means that the government no longer has to support the ration programme for 80% of the population.

[kurd123]

Iraqi Kurdistan oil output 'could hit 200,000 bpd this year

NICOSIA, — Iraqi Kurdistan could raise oil production to 200,000 barrels per day by the end of 2010 and hopes to resume crude exports, the autonomous region's energy minister was quoted as saying Friday.

"Volumes could be quickly ramped up to 100,000 bpd and hit 200,000 bpd by year end," Natural Resources Minister Ashti Hawrami told the Middle East Economic Survey (MEES) in its edition to appear on Monday.

Iraqi Kurdistan halted oil exports -- of about 60,000 bpd, through a pipeline to neighbouring Turkey -- in October last year due to a payment dispute with Baghdad.

On May 18, the federal cabinet approved a draft deal hammered out by Hawrami and Iraq's deputy oil minister
KRG Minister of Natural Resources Dr. Ashti Hawrami
for upstream Abdulkarim al-Laibi that would allow investors in the Kurdish region to be paid for costs and could pave the way for exports to resume.

But Hawrami stressed the deal with the central government was only provisional until a wider oil agreement is reached, adding Iraq's political deadlock after inconclusive March elections was an obstacle.

"I am optimistic, but as you know we are in the process of forming a new government in Baghdad, so there is a question over whether they will give the issue the attention it requires," Hawrami told MEES.

"We all need this. Iraq needs the revenues."

Companies exploiting Kurdish oil fields, which currently produce about 20,000 bpd, include Norway's DNO, Turkey's Genel Energy and state-owned Chinese firm Sinopec.

[BigDreamer]

Iraqi economist: decline of Euro will give Iraqi Dinar a major boost

Economist Basim Abdul-Hadi, confirmed that the decline of euro in global markets will have a positive and negative impact at the same time on Iraqi economy.

Abdul-Hadi said that the positive impact is the fact that all of Iraq's foreign reserves are in US dollar, adding that the price of the dollar against the depreciation of euro will increase the purchasing power of the dollar, which will result in importing more goods through foreign swap and exchange prices, with the same purchasing prices especially goods from European Union.

The negative impact of the decline of euro is the effect on the price of oil, though the barrel of oil is priced in US dollar, but the link between the dollar and euro as two major currencies in the global economy, leading to the possibility of lower oil prices which affects Iraqi oil exports.

He noted that the decline of euro is not sharp, pointing out that the treatment methods pursued by the European Union are promising, through pumping subsidies of 120 billion dollars.

Adding that we are waiting for the impact of actions taken by the European Union and it’s reflect on the global economy and oil prices generally, because the long-term decline in oil prices (below normal rates) would affect the Iraqi budget.
http://www.iraqdirectory.com/DisplayNews.aspx?id=12678

[elusive]

ISX index up 0.4%, closes at 93 points

June 1, 2010 - 12:22:07
BAGHDAD / Aswat al-Iraq: The Iraqi Stock Exchange (ISX) index went up by 0.4% to close at 93 points as rates of shares of 11 out of a total 29 firms traded in today’s session saw better time.
Tuesday’s session saw more than 395.378 million shares exchanging hands at more than 563.872 million Iraqi dinars (roughly $482,000) through 249 deals, with non-Iraqi investors obtaining 37 purchase deals worth 46.7 million dinars over the banking and industrial sectors and three sale deals worth 5.5 million dinars over the industrial sector.
Twenty-nine out of a total 85 electronically-registered companies traded stocks today (June 1) with 11 going up, eight down and 10 retaining their previous rates.
The banking sector took the lead with 56% of the overall trading through 98 deals worth more than 316 million dinars over 10 firms, followed by the industrial sector with 29% through 101 deals worth 163 million dinars over nine firms, the hotel sector with 6% through five deals worth 35.9 million dinars over three firms and a poor trading over the service, agricultural and investment sectors.
The ISX witnessed its first E-trading session on April 19, 2009 over five registered companies, three banks and two hotels. The banks were: Ashur International Bank (AIB), Al-Mansour Bank and the Iraqi Credit Bank while the hotels were: Ashtar Hotel and Al-Mansour Hotel.
On June 7, 2009, the Iraqi Middle East Investment Bank and the Warka Bank joined the electronic trading sessions.
The ISX now holds five sessions from Sunday to Thursday.
AmR (S)/SR

[MKTJ]

US filters banned nationalities working in Iraq
Nepal lifts ban on travel to Iraq to save jobs


Iraq/Nepal (Agencies)

Thousands of Nepalese workers in Iraq will be able to keep their jobs after the government lifted a ban on travel to the war-torn country, the employment ministry said on Thursday.

The workers risked being sent home after the US government directed all companies it employs in Iraq to dismiss anyone working there illegally.

"The government has taken this decision to protect the interests of thousands of Nepalese migrant workers in Iraq," ministry spokesman Purna Bhattarai said.


Nepal banned its nationals from working in Iraq after 12 Nepalese contractors were kidnapped and executed by an Islamic militant group in 2004.

But the government estimates that up to 30,000 may be working there illegally, mostly as security staff, attracted by the comparatively high pay on offer.

Thousands of Nepalese leave the desperately poor country every month to seek employment abroad, mostly in Gulf countries and Malaysia.

Last year, remittances from overseas workers accounted for 21 percent of the country's gross domestic product.


Many nationalities work illegally in Iraq despite the ban

The U.S. military said Wednesday it is clamping down on contracting firms on American military bases using employees whose home countries ban travel to Iraq, raising questions about why the contractors were allowed to work in the country for so long despite the ban.

Philippine’s citizens have been banned since 2004 from traveling to Iraq after insurgents threatened to behead a Filipino truck driver, and officials in the Philippines say they have repeatedly asked the U.S. and other countries to respect their ban.

Despite the ban, many citizens from the Philippines still make the journey to Iraq, joining the tens of thousands of contractors.

U.S. Col. Richard E. Nolan, of the military's contracting office in Iraq, said the military is investigating the firms' work forces.

Nolan says companies would have 20 days to outline a plan for ensuring their work force conforms with regulations. There is no immediate timeline for when the workers would have to leave the country.

"We want to make sure that we give contractors enough time to do that so that it doesn't impact our mission out here," said Nolan, who arrived in Iraq about two weeks ago.

Nolan said the issue came to light when he received information that at least eight contractors had been left behind by their employers. When the military began trying to repatriate the eight contractors, they discovered that four were from countries that banned travel to Iraq.

News of the clampdown was first made public by the Ms. Sparky website, which bills itself as being run by an American former contractor in Iraq and often covers issues related to contractors working with the U.S. military.

The website posted a memo written by Nolan outlining concerns about the contractors that had been left behind and setting a 20-day timeline for compliance. Nolan authenticated the contents of the memo to The Associated Press.

When asked why there were contractors in the country whose home countries have banned travel to Iraq, the U.S. military press desk said in a statement: "Many Third Country Nationals (TCNS) were employed as contractors to support the war effort in Iraq before travel bans were put in place ... The U.S. government continuously inspects our contractor work force to ensure they are in compliance with contract terms and conditions."

According to the press desk, no disciplinary actions have been taken against the contracting companies.

http://www.alarabiya.net/articles/20...29/115140.html

[elusive]

Releasing cash to banks reinforces economy – banker

August 28, 2010 - 10:35:39
BAGHDAD / Aswat al-Iraq: The decision of the Central Bank of Iraq (CBI) to release 5 percent of cash reserves is a step toward reinforcing the role of the private sector in the Iraqi economy, a banker said on Saturday.
“The amount was semi reserved without taking advantage of it,” the banker told Aswat al-Iraq news agency.
He explained that the cash will improve loaning, credit, and letters of credit.
“Having cash in banks will also improve daily banking services,” the banker added.
MH (P)/SR

[BigDreamer]

Iraq's core inflation falls to 1.7 pct in July

Iraq's core inflation continued to slow in July, dropping to an annual rate of 1.7 percent from 2.7 percent in June, a central bank official said on Monday.

The bank gave no immediate explanation for the fall in core inflation, which excludes expenditures on fuel.

The oil sector accounts for more than 95 percent of government revenues in Iraq, which is now pulling out of years of sectarian violence following the 2003 U.S.-led invasion.

Outside of oil, private investment has lagged despite a sharp fall in overall violence in the past two years and ahead of a full U.S. military withdrawal in 2011.

To spur investment and economic growth outside of the oil sector, the central bank has relaxed monetary policy and tried to encourage banks to lend.

The central bank last week said that from Sept 1 it will cut commercial banks' reserve requirements to 15 percent from 20 percent. In April it cut its key interest rate by 100 basis points to 6 percent due to subdued inflation.

Iraq's economy remains largely disconnected from the global financial system, and the bank's policy rate is more symbolic than effective as there is little credit, few Iraqis keep savings in bank accounts, and only a handful of banks buy central bank and government-issued notes.

[sheytanElKebir]

Iraq's new budget puts deficit at $18.6bn
Baghdad: 4 hours and 11 minutes ago

Iraq's proposed 2011 budget runs a deficit of 22 trillion dinars ($18.6 billion) and assumes oil exports of 2.4 million barrels per day, Deputy Finance Minister Fadhil Nabi said on Sunday.

The ministry last month proposed a budget of 102 trillion dinars ($86.4 billion) based on a world oil price of $70 a barrel.

"We've sent the budget to the cabinet. We are waiting for them to discuss the issue," Nabi said. "Possibly during this week the economic committee will hold a meeting and discuss the budget."

The government, which is trying to rebuild Iraq after years of war and sanctions, is dependent on oil revenue to fund about 95 percent of its budget.

The Opec producer has signed deals with global oil firms that could boost its output capacity to 12 million barrels per day in six to seven years from the current 2.5 million a day, potentially rivalling top Opec producer Saudi Arabia.

The assumed exports of 2.4 million bpd next year would represent a significant boost. Iraq's exports in September were 2.021 million bpd.

The International Monetary Fund approved a disbursement of $741 million to Iraq on Oct 1 under a $3.7 billion loan program and commended the government for maintaining macroeconomic stability in the face of difficult security conditions.

It said Iraq's budget was likely to swing into surplus in 2012 based on conservative assumptions for oil prices and exports.

The budget must be approved by the cabinet and then by parliament. Iraqis elected a new parliament in March but no political bloc won enough seats for a governing majority. Politicians have been squabbling over the formation of a new government since then, and parliament has not been sitting regularly.-Reuters

[elusive]

Baghdad trade fair great chance to attract global companies – ministry

October 12, 2010 - 07:37:17
BAGHDAD / Aswat al-Iraq: The Baghdad International Trade Fair is a great chance to attract several global companies to get investment opportunities in Iraq, the trade ministry said on Tuesday.
“The Fair, which will be held next month, will be a massive gathering of several global companies to win investment opportunities in Iraq,” the media office of the trade ministry told Aswat al-Iraq news agency, noting that the fair represents a message to these companies to be sure that the situation in Iraq now is safe and stable.
“The fair will be an occasion to launch a commercial initiative to turn Iraq’s central markets into malls, ” it said, noting that the ministry started the first step in this direction in the al-Mansour central market in Baghdad.
SH (P)

[BigDreamer]

is that the mansour mall that you were referring to in another thread Elusive?
I still haven't figured out where this mysterious big mall in mansour is