The Iraq Stock Exchange (ISX) had a tough quarter with the market moving lower with low volatility and on paltry volumes. But there the negative ends. All the rest is looking good. Iraq´s economy is improving, the country is mostly rid of terrorism and a new and good prime minister is in place after the recent parliamentary election. So it is painful to see the index touching the lows seen back in 2016 when oil was trading below $30 per barrel and IS swarmed large swaths of the northern and western parts of Iraq.

So the key indicators are all favorable for Iraqi equities, but there is no liquidity in the stock market. What is needed now is a spark. One foreigner with interest to buy a small stake in one of the bombed-out banking stocks could be enough. Locals would tag along, and the rally would spread to other sectors. The last spark was seen back in the first quarter when the market rallied 30% in less than one month. We expect the next move to be of even sharper magnitude as valuations across the board are at extreme levels.

Domicile: Bermuda Sources: Bloomberg, Rabee Securities

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