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Equity capital markets: Erbil exchange courts Kurdish capitalists

Bourse set to launch this year; elecoms listings in doubt.

At the Erbil Stock Exchange (ESX) on 100 Metre Road there is an awkward wait as the automatic doors fail to open. Once inside, a bare concrete lobby gives way to sparse offices. The doors of Iraqi Kurdistan’s first bourse, originally due to launch this month, serve as an unfortunate indication of its progress so far.

ESX chairman Abdullah Ahmed Abdulraheem, sitting at his desk in a fourth-floor office, is apologetic about the delays to the launch of the stock exchange, mooted since 2010 and now pushed to the end of the summer – if not the end of the year.

"We are a little bit delayed, but this was for our own sake. We are in a better position now, and that is good for all sides," he says.

Abdulraheem hopes investors will be patient as the bourse works with Nasdaq OMX and consultant Louis Berger Group to set up its electronic trading system. He says that when the ESX does finally launch, it will be with several IPOs, and he expects daily trading volumes of between ID5 billion and ID6 billion ($4.3 million to $5.2 million).

He says the listings will come from the financial services, agricultural and industrial sectors. The chairman wants the ESX to target international firms that work in Iraqi Kurdistan, including the UAE’s Emaar Properties and Dana Gas, as well as international oil companies.


Abdulraheem is coy about Iraq’s lucrative telecoms sector, where two of Iraq’s biggest companies – Zain and Korek – are still yet to list in Baghdad, as required under their licence agreement. There has been speculation within Iraq that both companies, being based in Iraqi Kurdistan, might prefer to wait for an ESX launch rather than place an IPO on the ISX.

AsiaCell, the third large telecoms company in the country, launched on the ISX in 2013 and has a huge weighting on the nascent exchange because it is one of only a few firms regularly traded. Zain and Korek were expected to follow last year, but their listings have not materialized.

"Korek and Zain have not completed their procedures to list yet. It is their decision [on which stock exchange they choose]," says Abdulraheem.

Abdulraheem dismissed any potential rivalry between the exchanges in Baghdad and Erbil, both of which would benefit greatly from either or both of the telecoms firms listing.

"Despite the fact that the ISX is in Baghdad and the ESX is in Erbil, we both back up the Iraqi economy. We have good relations with ISC [the Iraqi Securities Commission] and Baghdad. We have one goal," he says.

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