Transparent corporate governance rules would attract savings and investment
25/4/2016 12:00 am
The Chairman of the Board of Governors in Iraq market for securities thair Adnan Hashem: to develop the capital market in Iraq is important and highlights its importance in the development of the business sector and the increase in GDP, and transition to a market economy and developing the role of the private sector in economic development,
adding in a speech during the workshop organized by the Iraq market for securities in the presence of representatives of sectoral authorities, including the Central Bank and attended by «morning» that most governors are trying to work with economic institutions is three Objectives:
the first is a collaboration with economic and investment institutions to attract national and foreign investment in building new companies, and upgrade existing ones through the attractiveness of securities through flexibility and reliability rules and instructions are attractive for investment.
the second objective is to develop trading systems and systems for the protection of data and information together to launch a teleconference for investors,
the third objective is to encourage companies to develop their performance according to criteria of efficiency.
In turn, the Executive Director of the Iraq market for securities, Taha Ahmed Abdul Salam, several proposals for developing the capital market and attract investment.
Abdel Salam pointed out the need for a capital market law in Iraq, which completed its 2008 capital market experts in both Arabic and English calling for diversification of financial instruments, in particular bonds, investment instructions and bond portfolio management.
He stressed the importance of not relying on the capital increase as a source of funding, especially in banking companies, bound by the feasibility study when increasing capital to companies that actually need to increase their capital, and urged banks to provide keeper «Secretary» for investors in Iraq market for securities.
He called Abdul Salam to issue rules for corporate governance of listed companies in the stock market based on the principles of disclosure and transparency, together with the establishment of the deposit insurance corporation to attract domestic savings deposit and investment projects.
Pointing to the need for issuance of securities listing rules for foreign companies overseas and rules of Foundation shares the branches of these companies and to be within the conditions get contracts for projects in Iraq.
He concluded by Abdel Salam by the importance of the development of rules for IPO (flotation) in corporate law when marketing new company stock or existing businesses when their capital increase depending on market value or fair and not on the basis of nominal value.
The responsibility of the sectoral
For his part, called on the Director of market systems in securities on the whole and Abdel Sayed Iraq market for securities to do lead role required, adding that the Central Bank's decision to increase the minimum capital for banks to 250 billion since the year 2011 has had a negative impact on stock prices and the performance of companies and shareholders, domestic and foreign investors and concluded the workshop organized by the Iraq market for securities work with version 11 the recommendation will contribute to improve trading and investing in the stock market. and provided recommendations on the need to The banks capital increases and limit approval increase by JSC exists as in neighbouring States, besides requiring companies that profit to distribute at least 50 percent of the net distributable profit in cash to investors.
Recommendations of the workshop
The recommendations emphasized the active role corporate governance by all relevant stakeholders of listed companies and safeguard the rights of small investors, and the importance of activating the oversight role of the market and not be recipient of irregularities but the initiator to detect and prevent its recurrence, as well as to increase the transparency of market indicators to reflect the real situation of the size of the steep price and accurately to daily market indicator.
And called for recommendations to discontinue allowing brokerage firms to invest 65 percent of its capital in Iraq market for securities and identify broker buying and selling operations to investors exclusively, and grant financial investment companies the possibility to be traded or shares portfolio administered directly by giving them limited trading holiday vacation fee is reasonable and acceptable.
It showed the importance of reconsidering the contribution of a foreign investor in listed companies should not remain open without any limitation exists as in the money markets of neighbouring States, stressing at the same time the need to amend the Companies Ordinance to allow listed companies to buy shares in the market and covered through the accumulated surplus or financing them and then sell them when conditions improved note that exist in several countries.
It showed that this method contribute to raise prices and give confidence to investors and deflate in some corporate capital.
And stressed the need to review all decisions and instructions including the securities law to be consistent with the concept of a stock exchange or stock market.