Securities law may boost Iraq bourse

Baghdad: The Iraq Stock Exchange expects to boost its business by 50 per cent once new securities legislation is in place as it will help to draw needed foreign investment, the bourse's chief executive said.

As the fledgling bourse approaches its first anniversary of automated trade, its next step is to put in place regulations and tools to help boost volumes, which average only $1 million to $1.5 million a day, Taha A. Abdul Salam told Reuters in an interview.

"Now we are going forward with the necessary things that make it easier for everyone to invest. I am convinced that I am doing right," Abdul Salam said on Wednesday.

"I believe we will see an increase of about maybe 50 per cent (in volumes and sales once the securities legislation is approved) from what we see (now)."

Iraq is facing possibly months of political wrangling to form a government after inconclusive parliamentary elections in March while attacks, widely blamed on Al Qaida, seem designed to tip Iraq into all-out violence.

Abdul Salam did not know if the securities bill had cleared Shura Council, the top government review panel, and gone on to parliament. However, he was optimistic it would be passed soon, once parliament began sitting again.

Approval

He said on a normal parliamentary timetable, the legislation would be approved by the end of the year or perhaps as early as in six months.

Passing the legislation would result in the creation of such tools as custodian banks and mutual funds, allow online trading and let the bourse handle initial public offerings, Abdul Salam said.

The tougher capital requirements in the proposed legislation could also result in billions of new shares from banks, he said.

The new regulations were "needed to make many possibilities happen for investors, for brokerage firms, to make it (the bourse) acceptable for everyone," Abdul Salam said.