In the second quarter the Iraqi market, as measured by the Rabee Securities USD Index, increased by approximately 2%. Intra quarter volatility, however, was huge, as the market registred a sharp V-shape post the lifting of a full lockdown which was also imposed on the stock exchange. Trading volumes were low, but the lockdown reduced the number of trading days. However, there was a pick up in trading activity registered from the April lows. We are happy to note that the uptick in the market activity has continued into early July, and at the time of this writing, stocks have staged a strong rally.

Brent oil staged a recovery and closed above the US$40 mark, helped by further reopening of countries across the globe. Also, OPEC+ extended its massive production, in an attempt to rebalance the market. As a counter effect we have seen increasing supply from US shale oil as prices have recovered, which should put a short term cap on the price of Brent.

On the earnings front we digested a solid report from the blue chip stock Baghdad Soft Drinks, which is a major holding in the FMG Iraq Fund. Despite the harsh times, the company managed to increase its sales by 5% in the first half of the year, and EBITDA was up by 15% Y-O-Y.


Domicile: Bermuda

Sources: Bloomberg LP, Rabee Securities