Iraq stock market ‘operating normally’ says FMG
FMG, the emerging and frontier markets manager, says that there are no signs local investors on the Iraqi Stock Exchange are panicking in response to the latest political developments in the country.
Local investors represent some 90% of the trading volumes, which means FMG has described the operating environment as ‘normal’ despite a big sell off last week and recovery thus far this week.
“Several factors such as the fact that a number of Iraq’s blue-chip businesses have limited exposure to the areas under the control of the extremists have benefited prices. One exception is Mosul Bank which was pilfered by the ISIS extremists. There is less business activity in the sparsely populated and less developed north and northwest parts of Iraq,” FMG said in a note to investors.
“Many of the companies we invest in are spread over the country, but 60% of the Fund’s exposure is in the banking sector, with most banks having operations concentrated in Baghdad, Basra or in Kurdistan. The Fund’s exposure to the real estate, hotel and consumer sectors are also fairly concentrated around Baghdad and southern Iraq.”
As to reports of runs on local banks, FMG says its people in situ have visited a number of banks over the past week and not seen queues building.