Iraq’s stock market outperformed most major regional exchanges in July, supported by gains in banking shares and improving economic ties with the United States, even as trading activity slowed during the summer months.
The Rabee Securities Iraq Stock Exchange Index (RSISX) gained 1.6 per cent during the month, outperforming markets including Bahrain, Qatar, Muscat, Dubai and Saudi Arabia. The advance was driven primarily by gains in Al-Mansour Bank, Bank of Baghdad and Iraqi Islamic Bank.
Investor sentiment was also supported by strengthening economic relations between Iraq and the US, according to market data released by Rabee Securities.
Banking stocks played a central role in the market’s performance. The RS Iraq Banking Index (RSIBX) climbed 4.2 per cent in July, significantly outperforming the broader market as investors continued to favour financial sector stocks.
The market’s total return index rose even faster than the benchmark, gaining 2.4 per cent after dividend distributions boosted returns for shareholders. Baghdad Soft Drinks approved a cash dividend of IQD0.40 per share, equivalent to a dividend yield of 6 per cent, helping lift overall investor returns.
Not all segments of the market moved higher. The RS Iraq Halal Companies Index (RSIHX) fell 2.6 per cent during the month, largely reflecting the impact of dividend distributions. Excluding that factor, the decline would have been a more modest 0.6 per cent.
Despite the gains in equity prices, trading activity weakened. Total trading volume on the Iraq Stock Exchange (ISX) fell 12 per cent month-on-month to $79.5 million. Excluding cross-transactions, volumes dropped 54 per cent to $9 million as seasonal summer conditions dampened market participation. The banking sector accounted for more than 93 per cent of total trading volume during the month.
Market breadth nevertheless remained positive, with 27 listed companies posting share price gains in July. Seventeen stocks advanced by more than 5 per cent, while nine rose over 10 per cent. Gulf Commercial Bank was the strongest performer, surging 153.8 per cent, followed by Gulf Insurance & Reinsurance, which gained 45.5 per cent.
Commenting on market performance, Aysegul Ozge Ozgur, Head of Research at Rabee Securities, said: “July’s performance highlights the resilience of Iraq’s equity market, with the RSISX Index advancing despite a seasonal moderation in trading activity and outperforming several regional peers.”
She added that strengthening economic ties between Iraq and the United States had provided “a constructive backdrop for investor sentiment”, while expanding cooperation across oil, gas, electricity and investment could create broader opportunities for the Iraqi economy.
The positive market performance came as Iraq’s oil exports recovered sharply in July and the government pursued new initiatives to strengthen economic relations with Washington and diversify export routes.
Source: Khaleej Times