Hutchison Ports and the Pritzker Family Business Interests (“PFBI”), advised by The Pritzker Organization, L.L.C. (“TPO”), announced today that the leading Hong Kong-based port operator has agreed to partner with NAWAH Port Management, L.L.C. (“NPM”) to manage existing and future operations at the historic Port of Basra in southern Iraq.

Hutchison Ports will assume oversight of day-to-day commercial and operational activities at NPM, operating under the name of Hutchison Ports Basra.

NPM is a containerized terminal operator at the Port of Basra located along the Shatt Al Arab waterway in Iraq.

The company services the shipping needs for a full spectrum of customers across Iraq – from large, multinational companies to local Iraqi merchants. NPM’s proximity to the city center and major oilfields, and its operations are viewed as key competitive advantages versus other ports in the region.

Andy Tsoi, Hutchison Ports’ Managing Director (Middle East and Africa), said:

We view NPM’s operations at the Port of Basra as an integral piece of our expanding Middle East strategy and are excited about the opportunities this partnership creates.

“We believe strongly in the growth story of Basra, Iraq, and the Middle East as a whole and are delighted to have the opportunity to participate in and support the growth of the business over the long term.

Eric Clark, CEO of NPM, said:

Hutchison Ports has an exceptional team and a proven track record of delivering value to its customers, employees and the regions in which it invests.

“We are delighted for the opportunity to partner with one of the leaders in the industry – a company which shares our vision of NPM as both a unique maritime asset in southern Iraq as well as strategic platform in the epicenter of one of the fastest growing regions in the world.

Eversheds LLP served as legal advisor to Hutchison Ports and Latham & Watkins LLP served as legal advisor to the PFBI during the deal process.

Terms of the transaction were not disclosed.

(Source: Press Release)

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Note: ISX will be closed starting from Sep. 1, 2017 to Sep. 5, 2017 due to the religious holiday of Eid Al-Adha. The next session will be held on Wednesday (Sep. 6, 2017).

Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 17th Aug 2017).

Please click here to download a table of listed companies and their associated ticker codes.

The RSISX index ended the week at IQD784 (-0.7%) / $805 (-0.3%) (weekly change) (-18.3% and -15.0% YTD change, respectively). The number of week traded shares was 39.2bn and the weekly trading volume was IQD34.8bn ($27.4mn).

ISX Company Announcements

  • Al-Zawraa for Financial Investment (VZAF) will hold AGM* on Sept. 17, 2017 to discuss and approve 2016 annual financial results. ISX will suspend trading of VZAF starting Sept. 12, 2017.
  • Original shares of Iraqi for Seed Production (AISP) will resume trading on Aug. 20, 2017 after approving 2016 annual financial results, increasing the capital from IQD7.5bn to IQD10.5bn through 40% bonus issue and deciding to distribute 40% cash dividend (IQD0.40 dividend per share, 5.6% dividend yield).
  • Ahliya for Insurance (NAHF) will hold AGM* on Aug. 28, 2017 to discuss and approve 2016 annual financial results. ISX will suspend trading of NAHF starting Aug. 23, 2017.
  • Al-Nobles for Money Transfer (MTNO) will hold AGM* on Aug. 24, 2017 to discuss and approve 2016 annual financial results. ISX will suspend trading of MTNO starting Aug. 21, 2017.
  • Ashur Bank (BASH) postponed its AGM* to Aug. 16, 2017 due to not completing the quorum on Aug. 9, 2017.
  • Fallujah for Construction Materials (IFCM) disclosed that it rehabilitated their site and brought back some employees to work on daily basis starting Apr. 2017. The company is working on to publish its financial results starting 2013. The company stated that it generated IQD71.2mn profit in 2013, corresponding to a 61% y/y decline. The company resumed its operations starting Jul. 1, 2017 and it is now preparing to offer all its services. The company also contacted a number of companies for investment and financing of its operations.
  • Two cross transactions occurred on 24.75bn shares of Al-Arabiya Islamic Bank (BAAI) on Aug. 13 and Aug. 14, 2017, which represent 9.9% of BAAI capital.
  • A cross transaction occurred on 5.5bn shares of Al-Noor for Money Transfer (MTNN) on Aug. 14, 2017, which represents 12.2% of MTNN capital. MTNN held AGM* on Aug. 17, 2017 to discuss and approve 2016 annual financial results. ISX suspended trading of MTNN starting Aug. 16, 2017.
  • A cross transaction occurred on 7.175bn shares of Al-Rabita Al-Maliya company (MTRA) on Aug. 16, 2017, which represents 7.2% of MTRA capital.
  • Iraqi Agricultural Products (AIRP) will hold AGM* on Aug. 21, 2017 to discuss and approve 2016 annual financial results and decide distributing 10% cash dividend (IQD0.10 dividend per share, 1.4% dividend yield). ISX suspended trading of AIRP starting on Aug. 16, 2017.
  • Mamoura Real-estate Investment (SMRI) disclosed the status of the subscription on the capital for the first 20 days. The subscription on the 2.88bn shares opened on Jul. 23, 2017. 2.56bn shares were subscribed and the remaining shares (0.32bn) are still available for subscription.
  • A number of shareholders submitted a complaint about United Bank (BUND) for the postponement of cash dividend distribution since 2014. According to the previous announcement, BUND will start distributing dividend from 2014 profit starting Oct. 1, 2017

Investment in healthcare is urgently required to save the lives of mothers and newborn babies in Iraq

Decades of conflict and under-investment have placed a huge strain on Iraq’s healthcare system, and pregnant women and their babies are paying for it with their lives.

Although progress has been made to lower maternal mortality rates, there has been slow headway in reducing the mortality rates for children under five. Newborn babies are particularly vulnerable because of poor birth practices, inadequate referral mechanisms and inefficient neonatal care, particularly in remote areas.

Breastfeeding, neonatal resuscitation, kangaroo mother care for preterm babies, and the prevention and treatment of infections will help prevent these infant deaths.

With the support of UNICEF, the Ministry of Health has launched the Every Newborn Action Plan (ENAP), which was developed jointly with UNICEF, the World Health Organization (WHO), and the United Nations Population Fund (UNFPA). The ENAP is an evidence based strategy to invest in, and improve the quality of maternal and newborn care.

“Providing high quality care before and after birth not only saves lives, it is also an investment to ensure Iraqi children have the best start in life and meet their full potential,” said Peter Hawkins (pictured), UNICEF’s Representative in Iraq.

“WHO and other partners will work to support the Government of Iraq through the Ministry of Health to achieve equitable universal health coverage, including the provision of comprehensive services for every woman and newborn in Iraq in order to contribute to the substantial reduction of maternal and neonatal mortality and morbidity,” said Musani Altaf, WHO Representative in Iraq

“Neonatal mortality contributes significantly to child mortality in Iraq. UNFPA is proud to have played a part in the formulation of the Newborn Action Plan and commits to support the Ministry of Health in its implementation,” said Ramanathan Balakrishnan, UNFPA’s Representative in Iraq.

The Iraq ENAP has been developed in alignment with the Global Every Newborn Action Plan. It is expected to serve as a roadmap that redefines and focuses national and sub national strategies and activities to reduce deaths and disability, ensuring no newborn is left behind.

(Source: UN)

On August 1, 2017, the Executive Board of the International Monetary Fund (IMF) concluded the 2017 Article IV consultation with Iraq.

Iraq is facing a double shock arising from the conflict with ISIS and the plunge in oil prices.

In 2016, real GDP increased by 11 percent owing to a 25 percent increase in oil production, which was little affected by the conflict with ISIS. This year, economic activity is expected to remain muted due to a 1.5 percent contraction in oil production owing to the OPEC + agreement to reduce oil production and only a modest recovery of the non-oil sector.

The decline in oil prices has driven the decline of Iraq’s international reserves from $54 billion at end-2015 to $45 billion at end-2016. Fiscal pressures are ongoing, with the government deficit increasing from 12 percent of GDP in 2015 to 14 percent in 2016 despite the ongoing fiscal consolidation, due to weaker oil prices and rising humanitarian and security spending.

The authorities have appropriately maintained the exchange rate peg. The simplification of documentation requirements implemented by the Central Bank of Iraq led to a decline in the parallel market spread to 6 percent in June 2017.

Medium-term growth prospects are positive. Growth will be driven by the projected moderate increase in oil production and the rebound in non-oil growth supported by the expected improvement in security and implementation of structural reform. Risks remain very high, however, arising primarily from volatile security, political tensions, and poor policy implementation.

The Fund is supporting Iraq through a three-year Stand-By Arrangement in the amount of SDR 3.831 million ($5.380 billion), equivalent to 230 percent of quota.

Full statement here.

30-page report can be downloaded here.

(Source: IMF)

Prime Minister Haider Al-Abadi took a phone call this week from French president Emmanuel Macron, who congratulated Dr. Al-Abadi for the triumphs achieved against Daesh.

Macron stressed France’s continued commitment to support Iraq in the fight against terrorism, supporting the Iraqi government efforts to restore stability, building its institutions, and developing relations between the two countries.

Dr. Abadi thanked France for its air support for Iraqi forces, and for its contributions in the fields of training and logistical support, before inviting French companies to participate in the “mega investment opportunities” in Iraq.

(Source: Media Office of the Prime Minister)

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Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 10th Aug 2017).

Please click here to download a table of listed companies and their associated ticker codes.

The RSISX index ended the week at IQD790 (+1.5%) / $807 (+1.1%) (weekly change) (-17.7% and -14.8% YTD change, respectively). The number of week traded shares was 59.7bn and the weekly trading volume was IQD59.0bn ($46.6mn).

ISX Company Announcements

  • Iraqi Agricultural Products (AIRP) will hold AGM* on Aug. 21, 2017 to discuss and approve 2016 annual financial results and decide distributing 10% cash dividend (IQD0.10 dividend per share). ISX will suspend trading of AIRP starting Aug. 16, 2017.
  • Al-Ameen Insurance (NAME) will hold AGM* on Aug. 16, 2017 to discuss and approve 2016 annual financial results and increasing the capital from IQD3.41bn to IQD3.75bn through 10% bonus issue. ISX will suspend trading of NAME starting Aug. 13, 2017.
  • Iraqi for Tufted Carpets (IITC) will hold AGM* on Aug. 14, 2017 to discuss and approve 2016 annual financial results and decide to distribute 30% cash dividend (IQD0.30 dividend per share, 3.9% dividend yield). ISX suspended trading of IITC starting on Aug. 9, 2017.
  • Three cross transactions occurred on 35.25bn shares of Al-Arabiya Islamic Bank (BAAI) on Aug. 6, Aug. 7 and Aug. 8, 2017, which represent 14.1% of BAAI capital.
  • A cross transaction occurred on 20.6bn shares of Zain Al-Iraq Islamic Bank for Investment (BZII) on Aug. 7, 2017, which represents 8.24% of BZII capital.
  • Al-Nukhba for General Trading (SNUC) will hold AGM* on Aug. 13, 2017 to discuss and approve 2016 annual financial results. ISX suspended trading of SNUC starting on Aug. 8, 2017.
  • Iraqi Islamic Bank (BIIB) will hold AGM* on Aug. 12, 2017 to discuss and approve 2016 annual financial results and rehabilitating the branches in dangerous areas by using IQD44.2mn from its expansion reserves. ISX suspended trading of BIIB starting on Aug. 8, 2017.
  • Ashur International Bank (BASH) held a GA on Aug. 9, 2017 to elect a BoD. The bank was suspended from trading starting on Aug. 6, 2017 for not publishing 2016 annual financial results.

UK Export Finance (UKEF) has announced that it is supporting the Enka UK and General Electric (GE) consortium with US$117 million in financing to deliver two critical power projects in Iraq.

Rt Hon. Greg Hands MP (pictured), UK Minister for International Trade, welcomed the news, saying:

The Department for International Trade through UK Export Finance is delighted to be supporting these power projects, which will significantly enhance the energy sector in Iraq.

“Construction of the projects also presents huge – and hugely exciting – opportunities for UK exporters, and clearly demonstrates the UK’s leadership in the energy sector.”

UKEF has provided a guarantee to support the government of Iraq in its contract with the GE-led consortium.

This support will finance the early stages of construction of two GE-powered 750-megawatt gas-fired power plants at Dhi Qar and Samawa in southern Iraq. Once complete, the power plants will help to alleviate severe energy shortages in Iraq, supporting the country’s infrastructure development and energy security. Further financing may follow to support additional UK procurement.

UKEF and the Department for International Trade teams in Iraq and Turkey are working closely with Enka UK and GE to source at least US$250 million worth of goods and services from the UK to deliver the projects in coming months.

A supplier fair was held in March, in partnership with energy sector bodies NOF Energy and the Energy Industry Council, to connect companies in the UK supply chain with the projects.

The move demonstrates GE’s commitment to developing its UK supply chain following the agreement between GE and UKEF signed in 2015. GE is the engineering, procurement and construction (EPC) contractor for the projects, which were announced in January, and Enka UK is the main subcontractor.

This support follows an agreement between the governments of the UK and Iraq, signed in March, reaffirming the UK’s commitment to supporting Iraq’s continued economic development.

Yavuz Akturk, Director at Enka UK, said:

We are very pleased to see UK Export Finance, the leading ECA active in Iraq, supporting these projects. It would not have been possible for us to enter into these projects with GE without their support.

“These projects will help the people in the country by increasing the electrification rate while providing great opportunities for UK exporters of goods and services to participate in these transformational projects in Iraq.”

Guto Davies, Head of ECA Financing, Global Capital Advisory, GE Energy Financial Services, said:

“The closing of this facility supports the construction of these two new power plants and GE’s commitment in Iraq. UK Export Finance and the Department for International Trade in Iraq have been instrumental in helping us achieve this critical milestone.”

(Source: UK)

Prime Minister Dr. Haider Al-Abadi has presided over the first meeting of the Higher Committee for Investment and Reconstruction.

The Higher Committee for Investment and Reconstruction has held its first meeting under the chairmanship of the Prime Minister Dr. Haider Al-Abbadi, in the presence of all members of the Committee.

Dr. Abadi stressed during the meeting the importance of launching a large economic program by supporting investment activities in various sectors, especially the productive sectors, so as to increase the country’s economic performance as our heroic forces approached the liberation of the remaining areas of the defeated the Islamic State group (IS, ISIS, ISIL Daesh).

The committee also discussed the agenda of the committee, in particular the formulation of “action mechanisms and organize prioritization“, and discussed the launch of a program to open investment in a number of industrial, service and commercial projects.

It recommended that the result to be submitted by a working group set by the committee to review a number of important files with a view to taking appropriate decisions at the next meeting.

The committee also discussed the ongoing preparations to hold an economic forum in Baghdad for businessmen from inside and outside Iraq to support the reconstruction and investment movement in all provinces.

(Source: CBI)

By Ahmed Tabaqchali (pictured), CIO of Asia Frontier Capital (AFC) Iraq Fund.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The equity market, as measured by the RSISUSD index was down -4.4% for the month, recovering from lows of -10.0%, on further declining turnover.

The average daily turnover for July was about 10% lower than the average of the prior four months in which the market was declining.

The average turnover during the up months, i.e. November-February, was about 1.8 times the levels of those of the down months (chart below) lending support to the bottoming/recovery thesis following the -68% decline from the early 2014 peak to May 2016 bottom.

Foreign selling continued to weigh on the market, but locals tend to appreciate the true values of local assets especially at extreme valuations and, at least now, seem to have acted upon this.

Please click here to download Ahmed Tabaqchali’s full report.

Mr Tabaqchali is the CIO of the AFC Iraq Fund, and is an experienced capital markets professional with over 25 years’ experience in US and MENA markets.

His comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.

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Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 3rd Aug 2017).

Please click here to download a table of listed companies and their associated ticker codes.

The RSISX index ended the week at IQD778 (+1.8%) / $798 (+1.8%) (weekly change) (-18.9% and -15.7% YTD change, respectively). The number of week traded shares was 30.9bn and the weekly trading volume was IQD29.6bn ($23.4mn).

ISX Company Announcements

  • Al-Ameen Insurance (NAME) will hold AGM* on Aug. 16, 2017 to discuss and approve 2016 annual financial results and increasing the capital from IQD3.41bn to IQD3.75bn through 10% bonus issue. ISX will suspend trading of NAME starting Aug. 13, 2017.
  • Iraqi for Tufted Carpets (IITC) will hold AGM* on Aug. 14, 2017 to discuss and approve 2016 annual financial results and decide to distribute 30% cash dividend (IQD0.30 dividend per share). ISX will suspend trading of IITC starting Aug. 9, 2017.
  • Iraqi Islamic Bank (BIIB) will hold AGM* on Aug. 12, 2017 to discuss and approve 2016 annual financial results and rehabilitating the branches in dangerous areas by using IQD44.2mn from its expansion reserves. ISX will suspend trading of BIIB starting Aug. 8, 2017.
  • Two cross transactions occurred on 24.15bn shares of Al-Arabiya Islamic Bank (BAAI) Aug. 1 and Aug. 2, 2017, which represent 9.7% of BAAI capital.
  • Commercial Bank of Iraq (BCOI) will hold AGM* on Aug. 8, 2017 to discuss and approve 2015 annual financial results and distribute 2.6% cash dividend (IQD0.026 dividend per share, 5.9% dividend yield). ISX suspended trading of BCOI starting Aug. 3, 2017.
  • Bain Al-Nahrain Investment (VMES) resumed trading on Aug. 3, 2017 after fulfilling ISC disclosure requirements and publishing 1Q17 financial results.
  • ISX will suspend trading of the following companies starting Aug. 6, 2017 for not fulfilling ISC disclosure requirements and publishing 2016 annual financial results: BIME, BMFI, BNOR, BUOI, BASH, BINT, HMAN, HBAG, HPAL, IICM, IELI, IKLV, SKTA, SILT, SIGT, MTNN and IKHC. (IMCM, IHFI, IFCM, SMOF and IKHC, which are located in dangerous zones, must make a disclosure of the general conditions of the company to resume trading.)
  • Asiacell (TASC) announced that it started paying 25% cash dividend (IQD0.25 dividend per share, 3.7% dividend yield) from 2015 profit starting  Aug. 1, 2017. TASC requested an authorization letter from clients for brokerage firms to receive the cash dividend.
  • National Islamic Bank (BNAI) held AGM* on Aug. 3, 2017 to discuss and approve 2016 annual financial results. ISX suspended trading of BNAI starting Jul. 31, 2017.