We have over the past few quarters informed of positive key development in Iraq and the fact that this had not been reflected in the stock market through rising share prices. In the first quarter of 2018, we finally did see investors returning to the market and the index rallied an impressive 17%, especially if you consider the negative moves in global markets. The Iraq Stock Exchange remains a shallow market so the small but positive flows registered was enough to spark the rally.

The Fund continued to add alpha during the first quarter mainly due to our high exposure to the telecom and consumer sector, which outperformed the broader market. Telecom operator Asiacell gained a massive 66% and Baghdad Soft Drink was up 55% as it continued to impress investors with solid operations and delivering strong growth numbers.

In the coming quarter, Iraqis will go the polling stations to vote in the parliamentary election for the fourth time since the fall of Saddam Hussein back in 2003. Over 24 mn of Iraq’s 39 mn population are eligible to vote on the 12th May. A new electronic voting system has been put in place for the first time in history. The Iraqi Independent High Electoral Commission comments in a Reuters interview “The results will be announced in hours, not days”. So the tension after the vote, seen in the past especially after delays, will hopefully be avoided.

Domicile: Bermuda, Sources: Bloomberg