The ISX or Iraqi Stock Exchange will provide incredible returns for those brave enough to enter this small new bourse!

The Newest Emerging Market (and in my opinion - the Most Exciting) To Date (October 29, 2009).

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NEW! NEW! NEW! NEW! NEW! NEW! NEW INFORMATION:
Effective November 1, 2009 The Iraqi Stock Exchange (ISX) Will Start Trading 5 Days A Week - 2 Hours Per Day (prior to this date it has been 3 days a week - 2 hours per day).  The trade days will be Sunday thru Thursday (no trading on Friday or Saturday).

The Iraqi Stock Exchange (ISX) began electronic trading a few months ago and no longer trades on 'white boards'.
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How could a stock exchange in a still-violent country have any hopes of being successful? 

First, while there are still some issues in Iraq, occasional violence within Middle Eastern Countries is nothing new and continues today.  Israel has a good infrastructure, a strong economy, and still suffers from missiles fired into it's territory frequently.  Saudi Arabia has a suicide bomber every once in a while.  Sadly, violence, whether caused by terrorists, power struggles, or a decades old fight for land, will most likely continue into the distant future within the Middle East.  However, this does not mean that they do not have strong, profitable economies.

Next, while the following is not an equal comparison to Iraq's situation, there are many similarities. Lets look at the Number 1 and Number 2 Highest Performing Stock Markets for year(s) 2006 and/or 2007:

Vietnam (Number 2): Opened on July 28, 2000 as the smallest stock exchange in Southeast Asia (search Google for
'Vietnam Stock Exchange') with only '2' Companies trading. From December 30, 2006 through April 12, 2006,
it was up 60%. With a market capitalization of $144 million for 22 listed companies, and it has increased tenfold to $1.5 billion for 35 companies (as of April 12, 2006). Starting at a base index value of 100, it is trading as of June 2, 2007 at 1,077.36.

Why is it performing so well? Foreign Investment and investment from their own people (local). While many People from all over the world did invest in this small bourse, this stock market also driven by their own citizens and making many of them very wealthy.

In all fairness, Vietnam has an incredible and rapidly growing economy with strong exports, a tight monetary policy (not too good for currency speculators), and a good infrastructure.

Now, lets look at a completely different country...

Zimbabwe (Number 1 as of 2007): Opened to Foreign Investment in 1993. Unemployment was at approximately 80% and inflation at approximately 1700% (at that time), however, their stock market - The Best Performing Stock Exchange (search Google for 'Zimbabwe Stock Exchange') with the key Zimbabwe Industrials Index up approximately 595% since the beginning of 2007 and 12,000% over the next 12 months... 12,000% Over The Last 12 Months!!! Just imagine how
much money has been made on this Stock Exchange! How is this possible? The average Zimbabwe citizen is unemployed
and may not even be able to afford food and yet their Stock Exchange has gone up 12,000%... Foreign Investment and Zimbabwe Citizens fueled this market!

Two Very Different Countries with Two Very Different Economies - in all actuality, there is little that is similar
with the exception being that their Stock Exchanges both have performed incredibly well.

Of course, you can still invest in either of these stock markets... but, who knows how much longer before
their 'bubbles' will burst, or, in the case of Zimbabwe... worse!  Read on!

Now, with the economic turn down that is causing problems worldwide, one stock exchange has managed to continue it's upward trend.  Most don't realize that Iraq was the economic center of the Middle East and was also called the "Bread Basket of the Middle East" due to it's huge, rich agricultural areas.  Many companies that were in business in the 1960's are still in business today and making a profit.  Today, life in Iraq is business as usual.  Stores are busy, restaurants and coffee shops serve patrons late into the evenings and fitness and exercise centers that once numbered about 15 now number around 300 scattered over many areas of Iraq.  Things have changed in the Iraq that was once shown on television and it gets better every day!

Background:
The ISX is the Iraqi Stock Exchange Which was originally the Baghdad Stock Exchange and opened in 1992 under
Saddam Hussein. It was not open to foreign investment at that time and was heavily regulated. It reopened as
the ISX or Iraqi Stock Exchange in June of 2004 with 15 Companies and trading approximately One Billion dinars
worth of shares daily (approx. $680,000 USD-at that time). By mid 2005 there were 89 Companies trading at
approximately $2,000,000 USD daily. The ISX currently trades 3 days a week for approximately 2-hours each day
(Sunday, Tuesday, and Thursday). They are also in the final stages of transferring the remainder of their traded companies onto their Brand New Fully Electronic Trading and Clearing System based on the NASDAQ OMX which is said to be the most advanced in all of the Middle East (which is saying quite a bit when you consider the Kuwait and Jordan stock exchanges) and will trade TWO times a day - FIVE times a week in the future!

Iraq's currency is the Iraqi Dinar (IQD) which is a new currency that was created to replace the Saddam era Currency.
It's value is 1170 IQD to $1 USD (U.S. Dollar) - as of May 25, 2009.  Due to the Central Bank of Iraq's (CBI) tight monetary policy which was used to help control inflation, Iraq has managed to keep their currency steady for quite some time (again, as of May 25, 2009) with little fluctuation.  While many believe that the Iraqi Dinar will one day Revalue from it's current rate to as high as 1 IQD = 1 USD, there has been quite a bit of news to the contrary.  More than one report has been issued concerning the investigation of the removal of the 3 inflationary caused zeros (essentially a LOP - i.e., a 5000 IQD note exchanged for a new 5 IQD note).  This would be consistent with their not-so-distant history when they closed their borders and did an in-country ONLY exchange for Saddam and Swiss currencies for the new IQD leaving foreign speculators at a loss.  While I do not expect Iraq to do an in-country ONLY exchange again, I do NOT expect that they will give away BILLIONS of the Iraqi people's money/wealth.


Why is the Iraqi Stock Exchange so promising?

One reason is that they did enact a law which allows foreign investment... meaning that any person can invest in the Iraqi Stock Exchange through a stock broker.  At this time, the only brokers permitted to exchange on the ISX are Iraqi Stock Brokers (of which there are MANY). 

The second reason is that the cost of shares vary from approximately 0.5 IQD to over 40 IQD - with the vast majority
currently trading at approximately 1.5 to 2.5 IQD - remember, 1170 IQD = $1 USD - this means that a share of stock trading at 1.17 IQD is equal to 1/10th of a U.S. PENNY ($.01 - one cent).

In Iraq, you can buy ONE Pepsi for approximately 400 IQD (approx. $.34 - thirty-four cents) - and for that same amount of IQD you can purchase approximately 285 Shares of Baghdad Soft Drink (AKA-Baghdad Pepsi - a fully Pepsi licensed manufacturer of Pepsi's full line of beverages). Pepsico currently trades in the U.S. for approx. $51.40 (as of May 25, 2009). Bank Stocks also trade for anywhere from just under 1 IQD to approx. 7 IQD. Warka Bank For Investment and Finance (for example) has raised their capital as required from the Central Bank Of Iraq (CBI) to 75,000,000,000 IQD (75 billion IQD) or approximately $64,000,000 USD (64 million USD) and is Iraq's largest private bank with approximately 100 Branches throughout Iraq - and trades for approx. 2.3 IQD per share.

These are this bank's (Warka Bank) actual returns (and is just one example):
 April 2004 - 25% Dividend (1 IQD per share owned)
 November 2006 - 29% Free Shares
 May 2007 - 64.5% Free Shares
 May 2008 - they increased their capital with NO dividend
 May 2009 - 47.058% Free Shares

As of 2006, if you owned 1,000 shares of Warka Bank you would have now have:
1,000 x 29% = 1,290 shares (2006);  1,290 x 64.5% = 2,122.05 shares (2007);  2,122.05 x 47.058% = 3120.64 shares (2009)

So, if a stock trades at 1.20 IQD and you purchase 100,000 shares of this stock (120,000 IQD) - it would cost you approx. $100.00 USD. If the stock rises to just One Cent ($.01 USD), those same 100,000 shares would be worth $1,000.00 USD -- Ten Cents ($.10 USD) = $10,000 USD... etc. Of course, this does not take into consideration any dividends, free shares, or paid up capital shares that you may earn while owning this stock.

$1,000.00 USD is worth approx. 1,170,000 IQD - which means that you can purchase approximately ONE MILLION SHARES of some IRAQI STOCKS for approx. $1,000.00 USD - Where else can you do this???  But it's not ALL about quantity - it's also about quality...  A strong company that has excellent returns!

Even though many of these companies have been around since the 1960's, until recently there were few computers in use, violence was at high levels, ATMs were unheard of, there were NO credit cards, and Iraq was under sanctions.  The world watched Japan rebuild after World War 2 and become a financial power house.  Advanced technolgy, infrastruction, exports - it all took time but they were successful - VERY Successful.  Iraq is in Growth Mode at this very moment and will most likely continue to be for the next 10 years.  Computers are showing up everywhere, cell phones are in wide use, ATMs are now found all over Iraq, and Credit Cards (both Visa and Mastercard) are now being issued.  It's an All New Iraq!  Even the investment community is starting to take notice -  There are already at least two Huge Multi Million Dollar Funds invested in the Iraqi Stock Exchange with many more on the way. 

Some will balk at the thought of putting hard earned money into a foreign bank or using a stock broker from half-way across the world to invest in a foreign stock market (like Vietnam & Zimbabwe - except Iraq is occupied by the United States and may have the world's largest oil reserves!). For those, I would recommend that you just sit back and every once in a while search 'Iraq Stock Exchange' and take a peek at its performance, of course, while you watch it go up and up and up - remember, for a minimal investment (minimal risk) you can get into what some would call a ground floor opportunity - I prefer Sub-Basement Opportunity as this is the Very Beginning of the Next Hottest Stock Market with nowhere to go but Straight Up AND while there are many investors all over the world waiting for their chance to enter into this market - You Can Already Be There! You can be there BEFORE you are hearing about it on the News or the Financial Reports - by that time, it will be saturated with foreign investment, tied to the Middle East Exchanges, and with an Index that I cannot even fathom at this time. Just imagine how different your life would have been if you had bought Apple Stock when it first traded? Imagine if you had invested in the Zimbabwe Stock Exchange before it exploded... 12,000%... $1,000 USD x 12,000% = $120,000.00

Below are ACTUAL RETURNS (and approx. dates) of some of the companies traded on the Iraqi Stock Exchange (isx-iq):

Current as of August 6, 2009 - Please Note that the following information was taken from a variety of sources including  ISX-IQ.net, Warka-Bank.com, InvestorsIraq.com, and personal sources:


April 2004
Warka Bank - 25% Dividend

January 1, 2006
Iraqi Middle East Investment Bank - 26.6% Free Shares

August 1, 2006
Iraqi Middle East Investment Bank - 26.6% Free Shares

November 2006
Dar Es Salam Investment Bank - 100% Free Shares
Warka Bank - 29% Free Shares

May 15, 2007
Warka Bank - 64.5% Free Shares

May 16, 2007
Babylon Bank - 15% Dividends

November 26, 2007
Economy Bank - 40% Free Shares PLUS 43% Paid Up Capital Shares
Mansour For Medicine - 19% Free Shares PLUS 50% Paid Up Capital Shares
Gulf Bank - 7% Paid Up Capital Shares

December 12, 2007
Iraqi Middle East Investment Bank - 14.814% Free Shares

January 12, 2008
Summer Bank - 4% Free Shares PLUS 16% Paid Up Capital Shares

February 17, 2008
Ashour Bank - 20% Free Shares PLUS 80% Paid Up Capital Shares

May 15, 2008
Iraqi Middle East Investment Bank - 35.484% Free Shares

May 20, 2008
Credit Bank - 40% Free Shares PLUS 40% Dividends (paid for 2007 & 2008)

July 24, 2008
Modern Paint - 15% Dividends

August 24, 2008
North Bank - 12% Dividends
National Metallic Industries and Bicycles - 7.5% Dividends
Bank Of Baghdad - 32.142% Free Shares
Investment Bank Of Iraq - 26.051% Free Shares

September 4, 2008
Ashour Hotel - 100% Paid Up Capital Shares

September 18, 2008
General Contracting - 100% Paid Up Capital Shares

September 22, 2008
Al-Nukhba For General Construction - 40% Paid Up Capital Shares
Gulf Bank - 16% Free Shares PLUS 34% Paid Up Capital Shares
Basrah Bank - 12% Free Shares PLUS 14% (or 20%) Paid Up Capital Shares  ---  CANCELLED
Dar Al Salam Insurance - 11% Free Shares PLUS 25% Paid Up Capital Shares
Iraqi Land Transport - 70% Free Shares

October 8, 2008
Carton Products Company - 100% Paid Up Capital Shares

October 13, 2008
Mansour Pharmaceuticals - 9% Dividends

December 21, 2008
Mousil Bank - 28% Paid Up Capital Shares
Kendi Vaccines and Veterinary Drugs - 120% Paid Up Capital Shares

April 7, 2009
Modern Construction Material Industries - 100% Paid Up Capital Shares

April 27, 2009
Al-Hilal Industries - 25% Paid Up Capital Shares

May 6, 2009
Iraqi Islamic Bank for Investment and Development - 100% Paid Up Capital Shares

May 7, 2009
Warka Bank - 47.058% Free Shares

May 14, 2009
United Bank for Investment - 300% Paid Up Capital Shares

May 20, 2009
Economy Bank - 72.5% Free Shares AND 62% Paid Up Capital Shares
Gulf Bank - 27% Free Shares AND 6% Paid Up Capital Shares
National Bank - 80% Paid Up Capital Shares
Iraqi Middle East Investment Bank - 30.95% Free Shares

May 22, 2009
Mousil Bank - 24.5% Paid Up Capital Shares

May 26, 2009
Babylon Bank - 20% Free Shares AND 40% Paid Up Capital Shares

June 15, 2009
Investment Bank of Iraq - 20% Free Shares AND 12% Paid Up Capital Shares

July 1, 2009
Karbala Hotels - 100% Paid Up Capital Shares (1 IQD per share)

July 27, 2009
Credit Bank - 22% Free Shares

August 17, 2009
Mamoura Real Estate - 15% Free Shares

August 24, 2009
Palestine Hotel - 47% Free Shares

August 26, 2009
Baghdad Motor Car Servicing - 200% Paid Up Capital Shares (1 IQD per share)

October 27, 2009
Basrah Bank - 36.363% Paid Up Capital Shares (1 IQD per share)


Please Note: 
A Free Share is exactly what it sounds like - "FREE" and always paid as a 'percentage' of the number of shares that an investor owns (i.e., investor owns 100 shares of Palestine Hotel which is offering 47% Free Shares - investor receives 47 Free Shares and NOW owns 147 shares of Palestine Hotel).  Please Note that it is common for the share price to be lower AFTER an offering of Free Shares.

A Dividend is paid in IQD (Iraqi Dinar) and is paid as 1 (one) IQD and is always paid as a 'percentage' of the number of shares that an investor owns (i.e., investor owns 100 shares of Mansour Pharmaceuticals which is offering 9% Dividends - investor receives 9 (nine) IQD.  Payment is made to Broker/Bank Account which is available to investor.  Also, currently Dividends are rarely offered as the preferred profit offerings are in Free Shares or Paid Up Capital Shares.

A Paid Up Capital Share is 'optional' and the investor does NOT have to take advantage (purchase) the offering which usually are priced at 1 (one) IQD (sometimes 2 IQD) per share (i.e., investor owns 100 shares of Basrah Bank which is offering 36.363% Paid Up Capital Shares at 1 IQD per share - IF the investor wishes to purchase these shares at the percentage offered then the investor will pay 100 x 36.363% = 36.363 IQD and receive 36.363 shares and now owns 136.36 shares of Basrah Bank.  Companies, Banks, and Hotels offer Paid Up Capital Shares to RAISE or Increase their capital.  If the offer price (i.e., 1 IQD) is too close to the current share price then it does not necessarily make any sense to pay 1 IQD per share when the normal share price is 1.05 or 1.10 or even 1.15 IQD as it is common for the share prices to trade for LESS 'after' an offering as investors sell off their Paid Up Shares to take the profit.  However, if the share price is 1.5 IQD or higher, then the potential for an immediate profit is there and can be realized 'if' the investor decides to sell the Paid Up Capital Shares after receiving them.