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Posted 10/03/2015 05:28 PM
Orient - special:
Iraq Stock Exchange was founded under the law No. (74) issued on April 18, 2004 and officially opened on June 24, 2004. It is a self-regulatory organization administratively and financially independent not-for-profit owned by the members.
Subject to the supervision of the Securities Commission and operate in accordance with the instructions and rules issued by it and to the rules of procedure.
First, the organization and objectives
Regulation: Iraq Stock Exchange governing trading operations and monitors systematically to five weekly trading sessions, during which the purchase and sale of securities Financial shares of joint stock companies-Iraq conducted in accordance with the instructions and rules of electronic trading and audited in accordance with the instructions of the person familiar with the ratios influential and disclosure of great deals.
And carried out transactions through brokers and authorized qualified and licensed to operate by the body and the market. Numbering 46 brokerage firms and through authorized in electronic trading on the electronic terminals's (96) authorized in the market site and through stations companies in their headquarters in Baghdad and a number of provinces.
And place trades through an electronic system receives all sales orders, purchase orders, including the interviewer on the basis of price and quantity specified in each order.
- Disclosure of Financial Indicators
- The inclusion of the shares of joint stock companies
Second, the factors affecting the prices of shares traded
Market value in the Iraq Stock Exchange in 2014 decreased by 17% compared with 2013.
This value decreased in the closing month of February of 2015 by 18% on the market value in 2014, the market value means the multiplication of capital closing share price.
Decline has appeared in current stock prices differently depending on the movement of trading them, and the back of the biggest decline in the shares of the banking sector prices compared to other sectors because of the equity block for this sector amounting to 5 trillion shares of the total number of listed shares of $(5.6) trillion shares.
The most important reasons for the decrease in the market value back to the following factors:
1. Increase funds listed companies' capital by underwriting and capitalization of profits and reserves (4,632) shares trillion in 2013 to (5,675) shares trillion in 2014. It affected traded in the Iraqi market due to annual increases of capital stock prices since 2012 to the end of 2014 The rate of share trillion annually.
That part of the liquidity needed to subscribe moved from trading market (ISX) to the first market to promote purchases of this market by the shareholders, which contributed to the decline in stock prices, in addition to the rise in the number of issued shares lead to a decline in the stock at the market price due to high offer shares.
2. The low liquidity and poor performance of the banking sector, as most of the banking activity is concentrated in the foreign exchange and trade finance and the issuance of letters of guarantee operations. Therefore, the performance of the banking sector fell under the low business volume of dollar auction of 150 million dollars a day in 2014 to 75 million dollars a day in 2015.
3. Daash terrorist aggression on Iraq since June 2014.
4. lower global oil prices since the end of the fourth quarter of 2014.
5. The decline in non-oil sectors of the economy indicators, and the size of the Iraqi budget.
6. relationship of the share price in the outcome of trading activity of listed companies affected by the profit and earnings per share of the following factors:
A rise in production costs in the joint-stock companies and weak capacity.
B. Administrative Violations of a number of joint-stock companies and non-disclosure.
C disguised unemployment in the company's contribution and not to promote the service and the type of product submitted by it under inflation funds a number of these companies' capital and the failure to address the observations made in the accounts of a number of other companies Observer reports.
7. intersection of the performance of some government institutions that are related to shareholding companies.
Third, investment in the shares of joint stock companies support proposals
For cemented investment securities and attract national and foreign savings activity there must be a clear action plan to address the existing imbalances and start economic reform and cemented private sector activity, and this can be crystallized through the following proposals and other proposals in other areas, and the following form:
1. Overture Iraqi Central Bank to suspend the decision to increase the companies' capital, especially in the banking sector, which currently represents its capital (5) trillion shares out of (5.6) trillion shares listed on the market, for the purpose of evaluating the results of the experiment, which lasted since 2011 up to 2014 on the performance of banks and the size of the equity shareholders and the mass of available liquidity in low light.
2. support of joint stock companies through the study of proposals and production constraints in the development of services in accordance with the companies accountable to apply annual plans.
The government support to protect the national product and not in the production and marketing but through the ability to competition between national and foreign product, which wasted a lot of hard currency.
3. exemption listed in Iraq Stock Exchange from taxes for two years companies (2015-2016) in order to achieve the yield and yield and achieve acceptable profit per share.
This in turn will enhance the value of the stock in the market and the market value of the total shares. It will also attract the inclusion of companies in the market and increase the depth of the market.
4. allowing banks to invest a percentage of the reserve by accepting mortgage investor shares to meet annual interest to create a liquidity-oriented investment and increased demand.
5. earn the confidence of investors through accounting corporations because of the poor manage their money and to bring the offenders in their personal capacity to administrative and specialized courts and not expose the company to fines and administrative sanctions, including suspended trading of its shares.
6. establishment of investment funds by the Iraqi banks leave from the Central Bank of Iraq, as since 2008 up to today there are 22 foreign investment fund invests in the market as opposed to the absence of any Iraqi encase investment.
7. Develop investment portfolios of investment controls and encourage banks and companies with a surplus in the employment part of the provided financial investment in the market to enhance the depth of the market Market depth and continued to approach the equilibrium price, especially when the incidence of low or high is not justified, and regulation mechanisms Market Makers Market Makers.
8. diversification of securities through the issuance of medium and long-term debt securities.
9. directing Iraqi media to publish and broadcast trading indicators free service of the economy and the organization of meaningful economic programs.
10. Keep the launch of service to the secretary of the applicants who meet the technical and legal conditions to attract long-term investments, which would strengthen the confidence of foreign investors in the market and attract long-term investment license.
11. launching GDRs license through international banks Depository Receipt and allowed to trade shares of a number of Iraqi stocks (by public bodies) in developed stock markets.