Friday, January 11, 2013

Asiacell IPO Iraq Stock Exchange - Investment


Asiacell - the first IPO on the Iraq Stock Exchange since Saddam Hussein was in power! - WOW!!!!

Baghdad Invest

Unwittingly marking the start date on a public holiday, the doors of the Iraq Stock Exchange (ISX) remained shut and roads were blocked in Baghdad to mark the Shia holy day of Arbaeen.
The Iraqi mobile operator, which is 54 per cent owned by Qatar Telecom (Qtel) is floating 67.5 billion shares, about 25 per cent of the company's share capital with an offer price of at least 22 Iraqi dinars per share (7 fils).

The company is hoping to raise almost US$1.3bn (Dh4.77bn) in the domestic offering. It has been one of the longest-anticipated IPOs in the region, attracting the attention of investors keen to tap into the success story of Iraq's mobile telecoms sector.

But after HSBC and Morgan Stanley pulled out as book-runners late last year, Asiacell will now have to rely on local investors to buy up the shares.

"We are aiming that locals will be the majority of subscribers. For local Iraqis this is something they hold in their hand on
a daily basis and understand that this is a company that makes money," said Shwan Taha, the chairman of Rabee Securities, which is acting as the sole distributor for the offering.

As it is a domestic Iraqi offering, there is no prospectus, but the company has produced an offering booklet in Arabic, which contains information on the company that has been advertised and distributed in the local press.
International institutions and investors are able to participate only if they have a broker account in Iraq.

"We are worried [that foreign investors will abstain from the listing]. Foreign investors get very close minded in this issue, because they see things in black or white. Their view is: if they don't have custody, then I'm not coming," Mr Taha said.

However, he added, "Everybody knows custody will come sooner or later and the guy who is in today will profit massively."

HSBC was widely thought to be the most likely candidate for a custody licence in Iraq last year, but the company decided to withdraw its application. "We are no longer pursuing it [custody licence]. We were hopeful we could do something from our office in Dubai, but current regulations require the bank to be in the country and this doesn't fit with our business model," said Arindam Das, the head of HSBC Securities Services for the Middle East and North Africa.

One main concern is whether there will be a big enough appetite to cover the entire offering. "We have seen clients, diversified investors, across the Gulf making inquiries. The interest is there. It's just the logistics - whether it will be optimal for investors to participate," said Anastasios Dalgiannakis, the head of institutional sales trading at Mubasher Financial Services in Dubai.
Asiacell is the first of Iraq's three mobile operators to undergo the offering process. Both Zain Iraq, a subsidiary of the Kuwait giant and Korek Telecom, part-owned by France Telecom, are also intending to float 25 per cent of their shares as per their licence agreements issued in 2007.

All three however missed the end-August 2011 deadline citing lack of information, a weak stock exchange and general uncertainty.

Asiacell plans to list its shares on the ISX on February 3rd 2013.

Latest Iraqi related news from:

Iraq Unique Investment Opportunity

Nine years after the US-led coalition toppled Saddam Hussein there are signs that companies are moving to long-term investments in Iraq.

A clear indication of the trade build up between Iraq and other Gulf countries is that some GCC members, such as Kuwait, want Iraq to join the bloc. Currently the UAE is Iraq’s primary trading partner with total 2012 trade estimated to reach up to $7 billion, up more than seven per cent on 2011.
In spite of the negatives, Iraq is one of the world’s fastest growing economies with double digit GDP growth predicted over the next three years. The federal budget is expected to reach $120 billion in 2013 and increasing steadily up to $200 billion by 2015, allowing a continuing high level of government spending to improve infrastructure and boost oil exports.
Eighteen international oil companies are already committed to multi-billion dollar investments in central and southern Iraq that are designed to treble the country’s oil production and create a new gas industry.
Kuwait Energy joined this effort in May last year after winning exploration rights in a 900 square kilometre block in Basra province. Sharjah-based Crescent Petroleum with its affiliate Dana Gas is already implementing an $850 million project in Kurdistan to process 300 million cubic feet of gas a day that will feed two power plants designed to generate 1,250 megawatts.
Growing business prospects are reflected in the increase of scheduled flights to and from Iraq and the Gulf.
Even though large parts of Iraq are still off limits, according to the advice of many foreign embassies, the security situation in Kurdistan is stable. This has led to a considerable increase in visitors to northern Iraq and new airport developments in Sulaymaniyah, Erbil and Dohuk.
Iraq as a whole though remains a difficult environment for doing business. Public services have still to be adequately restored and there
are continuing security concerns. A bureaucratic labyrinth has created structural inefficiencies that are reflected in administrative delays and corruption.

Nevertheless, shrewd investors have recognised the potential. Iraq’s mobile telephony market has proved a big draw for Gulf investors such as Qatar’s QTel. Last June the company said it intended to raise its shareholding in Asiacell, one of the top three cellular operators in Iraq, to 60 per cent for $1.47 billion.
Another leading operator is Zain Iraq, a subsidiary of Kuwait’s Zain group while Kuwait’s logistics operator Agility is also a principal shareholder in the Korek mobile telephone company.
Despite disputes with the regulator over delayed stock markets listing, the mobile investments have proved very successful and encouraging new fourth generation mobile technologies to be rolled out to serve a market that is not yet fully penetrated.


There are a growing number of significant Gulf investments in other sectors. Gulftainer is providing logistics links throughout the country from Zakho on the Turkish border in the north to Umm Qasr on the Gulf coast.
In 2010, the Sharjah-based company was awarded the concession to operate a berth at Umm Qasr port and to develop, operate and complete construction of the planned Iraq container terminal north of the port on a 750,000 square metre site designated Umm Qasr Logistics City.
“It’s a massive market. There are barriers to entry right now, but in five years the situation will get better and it will be the prime market in the region along with the UAE, Qatar and Saudi Arabia,” Al Assam believes.
Evidence of this came last October, when the ministry concluded a memorandum of understanding with Dubai’s Emaar Properties to jointly develop residential, commercial and tourism projects in Iraq.
Iraq needs millions of new homes, which will require both public and private sector involvement. According to Emaar Properties MD, Ahmad Al Matroushi, “Iraq is one of the promising emerging markets in the Middle East and our partnership complements our strategic goal to expand to key international markets.”
In addition, Abu Dhabi’s Bloom Properties and Dubai’s Damac have recently signed initial agreements for construction projects in Iraq potentially valued at $7 billion.
Bloom is looking to develop both commercial and residential projects, as well as schools and sports facilities. Damac, which is reported to have already acquired two plots of land in Baghdad, is expected to focus on commercial and residential developments as well in and around the capital.
Earlier in 2012, the Iraq government appointed Bloom as prime developer for a project in Karbala province involving building schools, a university, hospital and clinics, hotels, retail areas, and recreational facilities in addition to up to 40,000 homes.
Bloom Properties CEO Simon Azzam believes that “Iraq is clearly one of the most important destinations that we have scheduled for growth,” while Damac’s chairman Hussain Sajwani describes the group’s Iraq move as representing “a significant agreement.”
The hospitality area is also a growing investment. Abu Dhabi-based Rotana is managing a property in Erbil and has signed an agreement to manage two more 200-room five-star hotels in Erbil. The company has also opened a hotel in Baghdad’s international green zone.
Dubai’s Range Hospitality, which focuses on developments around religious sites, is building the $100 million Al Rawdatain Gardens 644-room hotel project in Karbala. Range’s chief executive Munaf Ali says, “We originally raised the seed capital early in 2010 and we were massively oversubscribed, even in this economic environment.”


More than 50 Kuwait companies are preparing to invest in a variety of Iraqi sectors including agriculture, industry and real estate, according to Ali al-Muamman the emirate’s ambassador to Iraq.
For instance, Kuwait’s Safir Hotels & Resorts is also developing a hotel project in Karbala and has plans to manage a 500-room hotel in Najaf.
This reflects a thaw in bilateral relations since the emir of Kuwait, Sheikh Sultan al-Ahmad al-Sabah, paid the first head of state visit to Iraq in 25 years during the Arab League summit at the end of March.
Reparation issues accruing to the invasion of Kuwait in 1990 and aviation disputes have prevented links developing. The haggling is not over since Kuwait is still owed some $22 billion by Iraq. The long-running and still unresolved dispute has resulted in international legal action, which has prevented Iraqi Airways flying to Europe without the risk that its aircraft will be impounded.
Kuwait Airways Corporation has been seeking $1.2 billion in compensation for 10 aircraft taken during the 1990 invasion. Iraq has offered $300 million to the carrier and an additional $200 towards establishing a joint Iraq-Kuwait airline.
Saudi Arabia has also taken the decision to re-open the gas pipeline that runs from the Gulf coast to Yanbu on the Red Sea. The pipeline is able to transport 1.6 million barrels-a-day of oil and was built with Iraqi funds to carry the latter’s crude during its war with Iran in the 1980s.
The decision taken unilaterally by Riyadh is strategic in light of tensions in the region but also reportedly in compensation for $30 billion of outstanding Iraq debts. In spite of this the two countries seem to be seeking to put relations on a better footing. Saudi Arabia named an ambassador to Iraq this year though Fahd Al Zaid, who is also envoy to Jordan, will continue to reside in Amman.
The UAE is the only Gulf state to have written off Iraqi debts. Following the cancellation of $7 billion of Iraq debts in 2008, the emirates decided earlier this year to write off a further $5.8 billion. The move seems to have opened a door to an increase in bilateral trade and investment in Iraq.
Clearly it is not a country for faint- hearted investors, but certainly not one to be ignored. “On paper it is probably the most difficult market to operate in and it does have its challenges. But it is also the most lucrative and if you know how to go about doing business there, it’s not as difficult as people think,” says Amar Al Assam, executive director for Dubai-based Dewan Architects & Engineers.
Latest Iraqi related news from:

Iraq Growth Rate 2013 - is impressive to all

Iraq central bank sees 2013 growth at 9% with reserves at $105-$110 billion

Baghdad Invest - 14/01/2013 Baghdad.

Iraq’s economy should grow 9 percent this year as the OPEC nation’s oil production expands and international reserves are expected at between $105 billion to $110 billion by the end of this year, a central bank official said on Friday.

Iraq has the world’s fourth-largest oil reserves and is producing more than 3 million barrels of crude per day for the first time in three decades as its industry recovers from years of war and sanctions.

“I expect the GDP will reach $150 billion by the end of 2013. It will be 9 percent (growth),” Acting Central Bank Governor Abdul-Basit Turki told Reuters at a banking conference in Baghdad.

The central bank has previously said it expected growth in 2012 to be around 10 percent and reserves in December last year were around $70 billion.

Iraq’s oil sector generates around 95 percent of government revenue, but the country still needs investment in other non-oil sectors and to improve its crumbling infrastructure and power generation systems.
Latest Iraqi related news from:

Iraq Threatens to Seize Kurdish Oil

Iraq threatens to seize oil shipped without its consent, sue dealers after Kurds begin exports

Baghdad Invest - 11/01/2013 Baghdad.

Iraq has threatened to seize oil exports made without its consent and sue companies dealing in what it sees as contraband crude just days after the country's self-rule Kurdish region began unilaterally exporting oil.
The spokesman for Iraq's Kurdish regional government, Safeen Dizayee, confirmed Friday that the largely autonomous territory began shipping oil unilaterally to Turkey in the past few days. He declined to say how much was being shipped abroad.

The move appears to have triggered Baghdad's threat. A statement quietly posted a day earlier on the website of the State Oil Marketing Organization warned that Iraq may confiscate what it sees as oil cargoes "smuggled across borders," and sue sellers, buyers and companies that transport the crude.

The statement said SOMO "is the sole legally authorized entity that has the exclusive right to export and import crude oil, gas and oil products" in Iraq.

A hard line from Baghdad over the shipments could exacerbate simmering tensions between Iraq's central government and the Kurds. The two sides appeared on the brink of war just two months ago after an exchange of fire prompted them to deploy troops and heavy weapons along their disputed internal border.

Iraq's central government and the Kurds have been at loggerheads for years about how to manage Iraq's vast oil wealth.
Since the 2003 U.S.-led invasion, the Kurds have struck more than 50 deals with foreign oil companies, including Exxon Mobil Corp., Chevron Corp. and France's Total S.A. Baghdad considers the deals illegal. It believes the central government should manage the country's oil policy and wants all exports to travel through state-run pipelines.

Dizayee said the Kurds are shipping the oil into Turkey by tanker truck. Much of the exported crude will be refined and then shipped back to the Kurdish region, which has a pressing need for fuel during the cold winter months, he said.
He insisted that the Kurds remain open to talking with Baghdad about the new exports within the framework of a comprehensive negotiation.
"If we need to address this issue, we need to address it as a complete package," he said.
The Kurds last month suspended oil exports through a pipeline managed by Baghdad over a payment dispute with the central government. Those exports fall under a tentative 2011 deal which calls on the Kurds to send the oil to Baghdad, which sells it, and pays 50 percent of the revenues to oil companies to reimburse their development costs.
Iraq sits atop the world's fourth largest proven reserves of conventional crude, with about 143.1 Billionn barrels.

Oil revenues make up 95 percent of the country's budget — a portion of which is earmarked for the Kurdish region.

Latest Iraqi related news from: