Sunday, January 29, 2012

Iraq Dinar Revaluation News

Baghdad Invest - 29/01/2012 22:55 G.M.T: Baghdad.
Delete three zeros from the Iraqi currency likely to add significant inflation to Iraq
A member of the Finance Committee from the Kurdistan Alliance - Najiba Najib wants to find the solution in order to strengthen the Iraqi currency, stressing that the proposed deletion of the three zeros will only bring high inflation in the country which will ultimately not lead to the strengthening of the Iraqi currency.

Najiba explained in a statement “the project to delete three zeros from the Iraqi currency will put an extra burden on the shoulders of the Iraqi citizen”.

The Finance Committee representative has asked the central bank to provide full studies on the project to delete the three zeros from the currency (IQD) to analyze the negative and positive aspects for this project, as well as the required changes to existing legislation to be formally submitted to the House of Representatives for a vote.
The main aim is to ensure the project to eliminate 3 zeros is of interest to all the Iraqi people!

The member of the parliamentary finance committee added that the project needs to have plenty of time to be implemented; the currency switch needs to be implemented at a slow pace to ensure no volatile movements spook the currency markets; this will need to be a gradual change.

The CBI (central bank of Iraq) has received widespread criticism surrounding the following plan:
  • 200,000 dinars exchanged for 200 dinars.
  • 100,000 dinars exchanged for 100 dinars.
  • 50,000 dinars exchanged for 50 dinars.
This will not result in a country of 32 million becoming wealthier nor poorer - it will result in the banks exchanging 200,000 dinars for 200 dinars.
Of course the 200,000 dinars and 200 dinars will equal the same purchasing power.
For example: 20 cans of Coca Cola today will equal 20 cans of Coca Cola once the 3 zeros are dropped from the Iraq Dinar.
The CBI has announced the project is expected to be completed at some point in the year 2014.
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Friday, January 27, 2012

Rabee Securities Iraq Stock Broker ISX

Baghdad Invest - 27/01/2012 17:23 G.M.T: Baghdad.

Rabee Securities (RS) was founded on January 7th 1995, and is headquartered in Baghdad. Rabee Securities is licensed and regulated as Securities Brokerage Company by the Iraq Stock Exchange (ISX). One of the best brokerage houses catering to institutional investors from all over the world.

The Iraq Stock Exchange is expected to double in size many times during the next 10 years, when looking for a broker - Rabee Securities would be an ideal choice as they intend to continue their growth too.

Rabee Securities is represented by Shwan Taha - CEO for Rabee Securities Incorporated.

Twenty five years of war and sanctions have devastated the Iraq economy – but for Shwan Taha, CEO of Baghdad-based Rabee Securities, "now is the perfect time to invest in a nation that is rebuilding from scratch".

Shwan Taha had previously worked in emerging/frontier market asset management initially as part of Mark Mobius’ Templeton emerging markets team and then at Soros. In 2008 Shwan arrived back in Iraq and took over Rabee Securities, a small local brokerage dealing with retail investors on the Iraq stock exchange.

Since then Rabee Securities have tried to model it on fund management best practice.

Opening an Account
Rabee Securities offer a very simple opening process for companies and individuals interested to trade the Iraq Stock Exchange (ISX). We recommend Rabee Securities as your Stock Broker in Iraq.

Saturday, January 21, 2012

How to Invest in Iraq? Foreign Investors.

BAGHDAD: Foreign investors seeking a foothold in Iraq take heed: You’ll need a healthy dose of patience, a flexible schedule and a love of tea. Nearly nine years since the U.S.-led invasion that toppled dictator Saddam Hussein, Iraq remains a state-centric economy and, beyond oil, private businesses have yet to play a significant role in the rebuilding of the once thriving Middle East bread basket.

Infrastructure remains dilapidated after years of war and economic sanctions, and investment is needed to reform banking, build houses and roads and fix a chronic electricity shortage.
That means plenty of opportunities for investors, but foreign executives already on the ground say it can take more than a year to become operational in Iraq, where security is one of the most costly risks.

Taking the time to build relations with local partners is the key to success, they say.
“Nothing is fast in Iraq,” said Alan Morrell, vice president of American bottled water firm Oasis. “We’re going to have to start with tea and relationship building and we may dance for three or four months if it’s a big deal. If it’s a simple deal, we might dance for two weeks, but we’re going to dance.”

Attracting foreign investment is essential to the rebuilding of Iraq and the OPEC-member state has already signed a series of contracts with oil majors to develop its vast oil reserves – the fourth-biggest in the world.

Iraq set a goal to attract $86 billion in investment by 2014 under a five-year economic development plan. The infrastructure, housing and electricity sectors need the most development.

The National Investment Commission was created in 2006 to facilitate the process for international firms. It offers “one-stop” shopping, including help with visas, registering a company, and housing and security for investors during a first visit.

NIC chairman Sami al-Araji said dozens of companies contact him a month regarding business opportunities in Iraq. Iraq’s market – an educated populace of 30 million with big requirements after years of war and sitting on huge oil reserves – is considered a potential gold mine in a weak global economy.

But risk factors – corruption, security against an ongoing and lethal insurgency and lack of legal safeguards – are high.

“I don’t know anywhere else in the world where it’s more essential [to have a local partner]. There’s so much uncertainty, so many unknowns to be navigating,” said James Hogan, former chief executive of banking giant HSBC’s business in Iraq.

“Even before you navigate, you’ve got to understand the socio, economic, political drivers. And it is complex.”

A lack of clear regulation makes even a simple process like obtaining a visa an arduous task.
According to Araji, getting a 10-day single entry visa to Iraq should take four to five days and a six-month to one-year multiple entry visa about 10-14 days. Many foreign investors say it has often taken months to get visas for themselves or their workers.

Most businessmen say getting a good Iraqi lawyer should be the first step, especially to assist with licensing. The cost of a lawyer to facilitate registering a company can range from $1,000 to $40,000, investors say.

Some investors say the sheer number of different licences needed makes the process of starting a business lengthy. Each ministry operates separately and has different requirements. “We admit that right now we have some difficulties time wise but we are in the process of trying to simplify it,” Araji said.

While the banking sector is undergoing reform with the help of the World Bank, Iraq remains a cash-driven society. At the height of the war, it was common for businessmen to carry suitcases of cash into the country. Investors can transfer money directly into bank accounts but some still use bags stuffed with greenbacks to pay for services.

“They’re not big bags, they’re very normal. Like the ones you get from the supermarket, just not transparent,” said Daniel Zamfiropol, Iraq branch manager for Romanian firm Octagon Contracting & Engineering.

“That’s the way you should carry [money]. Don’t carry it in a nice bag ... low profile, that’s the key word.”

Security remains a primary concern nearly nine years after the U.S. invasion, with bombings a daily occurrence, and most foreign companies hire personal security teams.

Hogan said HSBC spends around $3,000-$6,000 a day on security. Ground Works Inc, an engineering, construction and logistics firm, said security for housing and business compounds can run at $14,000-$18,000 a month, while a local bodyguard costs $1,500 a month and a foreign guard $4,000 per month.

Electricity is intermittent and having a generator is a necessity. Businessmen say fuel for generators can cost around $3,000-$8,000 a month.
While high overheads, low initial returns and delays in licensing are frustrating, many investors say the steepest learning curve is understanding the culture.

“What we found is that Iraqis don’t appreciate a direct conversation of pressure associated with their performance. They would prefer patience and ongoing communication and relationship building,” Morrell said.

“In a Western culture, we’re used to going in and saying ‘it’s your job, sort it [out], what’s the problem?’ and demanding services. In this culture, that’s not what they’re looking for.”
Face-to-face communication is highly valued but telephone calls and text messages are also acceptable. Iraq did not have a mobile phone industry under Saddam and the sector has since boomed. Emails are rarely answered.

“I stopped relying on emails as a means of communication. Either they don’t get read, or even if they do get read, they might not necessarily generate a reply,” said Hogan.
So what are the essential rules for doing business in Iraq?

“Throw your timeline out the window, stick to your budget, and your plan needs to be able to be fluid,” Ground Works President Greg Holmes said.

Friday, January 20, 2012

Iraq Dinar Revaluation

Baghdad Invest

BAGHDAD -- The Iraqi Central Bank is planning to redenominate the national currency in an effort to ease transactions and allow people to carry less paper money.

Mudhhir Muhammad Salih, a member of a Central Bank advisory panel, told that a plan has been made to remove three zeros from the currency and phase out the current banknotes late this year.

Salih said the new banknotes will be fully introduced while the old banknotes will be gradually removed from circulation. He did not specify when the new notes would be issued.

Both will be legal tender in Iraq until the old notes are completely withdrawn.

Iraqi officials have had a long-running plan to redenominate the Iraqi dinar. In 2006, the Finance Ministry recommended to the Central Bank that it carry out such a plan.

Salih pointed out that banks are having a hard time accepting cash savings and deposits, but by dropping the zeros it will make it easier for both the banks to deal with their customers and for the general public to carry money. He said some 80 percent of Iraq's money supply is cash in circulation.

Salih added that in 1990 the value of banknotes in circulation was about 25 billion Iraqi dinars but is currently some 25 trillion dinars.

Economic analyst Hilal al-Tahhan told that the bank's move is overdue. He said he expects the currency change to go smoothly because of the decision to allow both the old and new banknotes to coexist, leading to less turbulence in the economy.

In 2010, the Central Bank of Iraq announced their plans to redenominate the Iraqi Dinar to ease cash transactions. The intention would be to drop three zeros from the nominal value of bank notes; but the actual value of the dinar would remain unchanged. That would mean that 1,000 IQD (pre-redenomination) and 1 dinar (post-redenomination) would both be worth the same amount in US Dollars.
Although the announcement stated that the change would take place by the end of 2010, there has been no redenomination as of January 2011 and no further announcements have been made. As stated by the Central Bank of Iraq, their mandate is to "ensure domestic price stability and foster a stable competitive market based financial system."

Just our opinion. Your choice if you buy Iraqi dinars (IQD) as an investment. We certainly would advise against such investment vehicle. does not support this investment stratergy and feel it prudent to make our point as we feel a lot of investors are being sold something that will remain only a dream.