Ivanka Trump and Nicky Hayley are candidates for the presidency of the World Bank
12 January 2019

The names of former United States Ambassador to the United Nations Nicky Hailey, the daughter of US President Donald Trump and his adviser Ivanka, are on the list of candidates for the post of World Bank president to replace outgoing Kim Jong-kim, the Financial Times reported.

In addition to Ivanka and Haili, who resigned as Washington’s ambassador to the UN Security Council last month, other names are being traded, including US Assistant Secretary of State for International Affairs David Malpas and Mark Green, president of the US Agency for International Development.

And last Monday, Kim suddenly announced his resignation from the helm of the bank more than three years after the end of his second term.

"It was a great honor for me to serve for six years as president of this unique institution full of people who are dedicated to their work and dedicated to their mission of eradicating poverty," said Jim Young-Kim,

He said he planned to "join a company and wants to focus on infrastructure investments in developing countries."

World Bank Chief Executive Cristalina Georgieva is due to be interim president after Kim leaves and even elects a new president.

"The ministry has received a large number of nominations," a spokesman for the US Treasury Department said on Friday.

"We have begun an internal review process on a US candidate, we look forward to working with the governors to choose a new president," he said.

Under a non-written agreement, the United States, the largest shareholder in the fund, has always chosen a bank president since its establishment in the wake of the Second World War.

On Thursday, the World Bank Council said it would begin accepting nominations for the bank’s presidency early next month and would announce a successor to Kim by mid-April.

http://assabeel.net/news/2019/01/12/…88%D9%84%D9%8A

World Bank report: Iraq will be the highest Arab economic growth by 2019

January 11, 2019

World Bank report: Iraq will be the highest Arab economic growth by 2019 The Middle East and North Africa (MENA) countries are expected to witness a rise in economic growth to 1.9 percent in 2019, according to a World Bank report. The show report recently released titled Figures (Global Economic Prospects: The Middle East and North Africa “bleak skies”) that growth in the GCC will rise to 2.6 percent , supported by the movement of an active investment at the level of the oil – exporting countries, the bank expects that growth declines in Algeria To 2.3 percent due to slower government spending than in 2018. Egypt will see a growth rate of 5.6 percent in 2019, boosted by investments and reforms in the expected business climate. The growth rate in Morocco and Tunisia will reach 2.9 percent in 2019 if tourism indicators improve and political reforms continue.

Although Iraq recorded modest growth in 2018 at 1.9 percent, reconstruction projects, according to the report, will be an important driver for the growth of its economy and neighboring economies, with an expected 6.2 percent, the highest in the Arab world. Growth in Jordan is likely to see a slight improvement of 2.3 percent. 2018 The 2018 estimates showed an improvement in growth to 1.7 percent amid improved economic activity in oil exporting and importing countries. Algeria registered a growth rate of 2.5 percent last year, Egypt with 5.3 percent, Morocco with 3.2 percent and Tunisia with 2.6 percent.

The World Bank has warned of the dangers facing the region, which can discourage growth, as conflicts can escalate and lead to greater damage to income and economic activity, not to mention health and social well-being.

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Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 10th January 2019).

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

The RSISX index ended the week at IQD672 (+2.2%) / $723 (+2.0%) (weekly change) (+2.0% and +1.8% YTD change, respectively). The number of week traded shares was 3.5 bn and the weekly trading volume was IQD1.3 bn ($1.1 mn).

ISX Company Announcements

  • According to the ISX announcement, the opening price of the IQD5.0 mn class bonds (CB125) will be IQD5,314,321 on Sunday (Jan. 13, 2019). [Table: 1.9]
  • ISX will suspend trading of Ahliya for Insurance (NAHF) starting Jan. 16, 2019 due to the AGM* that will be held on Jan. 21, 2019 to discuss and approve 2017 annual financial results.
  • ISX will suspend trading of Bain Al-Nahrain Investment (VMES) starting Jan. 13, 2019 due to the AGM* that will be held on Jan. 16, 2019 to discuss and approve 2017 annual financial results.
  • ISX will suspend trading of the following companies on Jan. 13, 2019 due to not disclosing their 3M18 financial results: BASH, HISH, SKTA, HASH, IICM, ITLI, IELI, IMPI, IHFI, IMCM, IFCM, IKHC, SBAG, SIGT and VKHF.
  • Babylon Hotel (HBAY) invited its shareholders on Jan. 9, 2019 to receive their 2016 cash dividend. The company decided in its AGM on Nov. 19, 2017 to distribute 20% cash dividend (IQD0.20 dividend per share).
  • ISX suspended trading of Commercial Bank of Iraq (BCOI) starting Jan. 8, 2019 due to the AGM* that will be held on Jan. 13, 2019 to discuss and approve 2017 annual financial results.
  • Iraqi Agricultural Products and Marketing Meat (AIPM) resumed trading on Jan. 7, 2019 after discussing and approving 2017 annual financial results.
  • Dar Al-Salam for Insurance (NDSA) invited its shareholders to subscribe to 40% rights issue to reach IQD7 bn paid-in capital.

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By Veronica Cotdemiey, CEO of Citizenship Invest.

Moldova: the most cost-effective passport from Europe

Citizenship by Investment has become one of the most reliable ways to obtain a legal citizenship and passport for many nationalities around the world. Allowing the ability to travel easily and secure a better future for individuals. However, when we talk about obtaining a fast-track second passport or citizenship and without immigration requirements, many come at a hefty price.

The Republic of Cyprus has one of the world’s most famous citizenship by investment programs and it is the only country that can offer a European nationality without ever needing to immigrate or prove residence in the country to obtain it. However, the property investment required to obtain the Cypriot citizenship stands at 2 million EURO which it is not affordable to large number of potential applicants. Many consider Caribbean countries like Dominica, St. Kitts & Nevis, St. Lucia, Antigua & Barbuda and Grenada through which they can achieve a second citizenship with a considerably lower investment amount.

For many investors in the region, some Caribbean countries can pose some difficulties to obtain their citizenship. In some cases, certain nationalities are banned from applying and they could encounter issues to transfer funds to the Government’s accounts due to intermediary banks based in the United States.

Moldova recently launched its citizenship program, the country is located in Europe and investors can obtain its passport without any residency requirements. The program is cost effective and has a quick processing time where applicants can obtain their citizenship in approximately 3 months. Moldovan citizens have visa-free travel to major countries around the world, most notably, Schengen countries, Russia and Turkey. The Moldovan citizenship program requires an applicant to transfer an amount of EUR 100,000 to Moldova’s Public Investment Fund. The amount goes up to EUR 155,000 for an applicant with more than 4 dependents. Another positive feature in Moldova’s CBI program is the ability to transfer citizenship to future generations without restrictions.

Moldova is a landlocked country in Eastern Europe with a 4 million population. The country is famous for its world-class wine industry and picturesque landscapes. The service sector has grown to dominate Moldova’s economy and currently composes over 60% of the nation’s GDP. In 2017, total bilateral trade between the EU and Moldova increased by 18% to €4 billion. The European Union’s imports from Moldova increased by 23% in 2017, to the value of €1.6 billion.

Although Moldova is not yet part of the European Union, the EU is Moldova’s first trading partner and the first investor in the country, accounting for over 55% of total trade. The value of agricultural, machinery and transport EU imported products from Moldova also grew confirming the positive trend of growth in Moldovan exports to the EU.

Moldova is actively pursuing joining the European Union member states through the EU Eastern Partnership policy. As part of its effort, Moldova is working on integrating various sectors such as transport, Energy, Technology, Media and Telecom with the EU for the possibility to deepen its corporation with the EU and increase the chances of becoming a member state.

By Ahmed Tabaqchali, 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.

December 2018 was probably the worst month in a decade for global equities, however the month’s sharp declines are eerily similar to those that drove the markets lower in December 2015 with the similarity extending to almost a replay of the start of 2019 to that of 2016.

The reasons, now and then, are fears of a slowing world economy with the world’s engine, China, showing signs of a meaningful slowdown. But the drivers of the slowdown this time are increasing evidence of the damage from the US-China trade war, echoing the Iraqi saying that “while reasons are many, death is the same”. However, now and then, the slowdowns were months in the making, but the markets ignored them until late in 2018.

The Iraq Stock Exchange (ISX), as measured by the Rabee Securities RSISUSD Index, on the other had quietly eked out a modest gain throughout the month to end up +1.9%. A gain which came despite sharp declines in the price of oil for the month that took Brent crude prices down about –40% from the October multi-year peak.

The ISX’s negative –15.0% return for 2018 marked the fifth year-over-year decline, on the back of declines of –11.8% in 2017, –17.3% in 2016, –22.7% in 2015, and –25.4% in 2014. The ISX further spent most of the last two years trying to break out; only to revisit the major May 2016 lows as each year came a close. This contrasts sharply with most global equities as the December sharp sell-offs took them down to about –20% off recent multi-year highs. This makes the risk-reward profile more attractive for the ISX vs. these markets as portfolio allocations are rebalanced in the light of the changed global environment.

Supporting the risk-reward profile for the ISX is the prospect of a recovery in corporate earnings. Iraqi equities should emerge from a multi-year severe economic contraction with the Telecoms being the first to emerge. Two of the major mobile operators out of three national operators reported Q3/2018 earnings that displayed the markers of recovery in earnings, margins and profits. Of the two, AsiaCell (TASC), listed since 2013, has a reported earnings span of 2012-2018 reflecting the operating environment before, during and after the ISIS conflict.

For TASC, the recovery started in late 2017 with the liberation of Mosul and the gradual return of customers lost since the 2014 ISIS invasion of a third of the country. As reported last month, TASC signalled its confidence in its future outlook with a distribution of a 12% dividend on the back of last year’s dividend yield of 14% –which in absolute terms is about a third higher than last year’s dividend. (See “Telecoms dial up Recovery” for further details on TASC).

The recovery for TASC extended to its stock price, which ended 2018 up +47%, following declines of –17% and –11% for the prior two years. TASC was joined by Baghdad Soft Drinks (IBSD), which was up +34% in 2018 on the back of 2017’s increase of +7%. IBSD is unique among the ISX’s listed companies as it continued to churn out healthy earnings growth through the downturn. Earnings for IBSD grew +13% in the first nine months of 2018, on the back of growth of +11% in 2017, +25% in 2016 and +37% in 2015 (pre-tax earnings).

TASC and IBSD’s performances stand in stark contrast to those of the banks which, as a group, had a dismal performance with the leading bank, the Bank of Baghdad (BBOB) down –52% in 2018 on the back of declines of –33% and –22% for the last two years. Other banks fared just as poorly with declines for a selected group ranging from –63% to –4% for the year. These negative returns don’t include income from dividends –which were quite high for some banks such as Mansour Bank (BMNS) or Commercial Bank Of Iraq (BCOI) that ended the year with dividend yields of 8% and 10% respectively. (See “Of Banks and Budget Surpluses” for more details on the banks).

Looking to 2019, the recovery of the banking sector would hinge on an economic recovery and a return of liquidity to economic activity, which for most of 2018 were held back by political uncertainties surrounding the May parliamentary elections.

Political uncertainty before the May 2018 elections was followed by indecisive election results, which in turn resulted in further uncertainties as the different political parties entered lengthy negotiations for the formation of a coalition government. Adding to these uncertainties was the eruption of massive demonstrations in the south demanding reform and investment into basic services. Things became clearer in early October with the promising appointments of a president and a prime minister in a fashion that broke the failed mould of the past. These were followed with the formation of a working government, which while still incomplete, can begin to act on the needed spending for a post-conflict recovery.

Paradoxically, while the political uncertainties paralyzed the government process, the government’s revenues soared with the recovery in oil prices, which has put the government on course for a two-year accumulated surplus of up to USD 24.5bn by the end of 2018. The oil markets decline from the un-sustainably high levels of the summer however are an un-welcome development but should not alter the country’s improving financial position as long as the government continues with the fiscal discipline brought on by the IMF’s 2016 Stand-By Arrangement (SBA). Moreover, Brent crude prices in a range of USD 50-60/bbl, would ensure that the government maintains this fiscal discipline and focus on reinvestments, a focus and discipline that are normally forgotten during periods of high oil revenues.

The healing effects of higher oil revenues over the last two years should begin the filter down into the broader economy over the next few months. The first evidence of this comes with the recent recovery in broad money, or M2 which acts as a proxy for economic activity, as can be seen in the chart below: –

(Source: Central Bank of Iraq, Iraq’s Ministry of Oil, Asia Frontier Capital)

(Note: M2 as of Sep. with AFC est.’s for Oct., Oil revenues as of Dec.)

While the October M2 figure is an estimate, it is based on actual M0 figures for the month and the recent M2/M0 multiplier figures. As can be seen M2 was moving sideways since oil revenues recovered in January 2016, but it began to accelerate in June 2018-Septemebr 2018 –and estimates for October suggest a continuation of this trend.

As such, this could mean that liquidity has finally begun to filter down into the economy – which should accelerate as the new government begins to act on its investment programme. Ultimately, this should filter down into the stock market, which should bring to an end the market’s divergence from its past close relationship with oil revenues – which currently is at the widest it has been for the last few years (see chart below).

(Source: Iraq’s Ministry of Oil, Rabee Securities, Asia Frontier Capital)

(Note: Oil revenues as of Dec.)

Recovery, in frontier markets, is a mirror image of Mark’s Twain’s phrase on going broke, in that recovery happens gradually and then suddenly. If similar experiences in other frontier markets (declining markets while fundamentals show gradual recovery following a long basing period) then the trend of the last few months could be followed by a sharp reversal.

However, for Iraq significant challenges remain with the huge demands for reconstruction, winning the peace, defeating a likely emerging ISIS insurgency, and controlling violence. In particular, the fragmented politics of the new parliament will continue to be a marker of risk for the government’s future stability, which would in turn pose a risk to economic recovery.

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

Mr Tabaqchali (@AMTabaqchali) 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. He is a non-resident Fellow at the Institute of Regional and International Studies (IRIS) at the American University of Iraq-Sulaimani (AUIS), and an Adjunct Assistant Professor at AUIS. He is a board member of the Credit Bank of Iraq.

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.

By John Lee.

Iraq has been ranked 171st out of 190 countries in the World Bank‘s recent Doing Business 2019 report, down from 168th place the previous year.

Top of the list were New Zealand, Singapore and Denmark, with last place going to Somalia, just behind Eritrea and Venezuela. Iran ranked 128th, with Libya 186th.

Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking.

More details here.

(Source: World Bank)

Iranian tendency to delete 4 zeros from the national currency
1/6/2019

head of the "Alolaiaan" in the Islamic Shura Council , Hamid Reza Haji Babaei, Sunday that announced the cancellation of four zeros from the national currency is included on the agenda.

Hamid Reza Haji Babaei in a press statement briefed on the participation of the Governor of the Central Bank of Iran Abdul Nasser Hamati today in a meeting of "the House of Representatives of States" in the Islamic Shura Council, noting that my interest was presented during this meeting a report on the performance of the Central Bank in different fields.


The Iranian parliamentarian said that "Hamati stressed during this meeting that the government of Lador has a high exchange rate of foreign currencies."


"The governor of the Central Bank of Iran believes that the main problem in the country is not in foreign currency but in riyal, and has been standing in front of checks that are sold and bought in Dubai," Haji Babaii said.


"The road is open to China and Korea and the road to establishing relations with India is being opened," he said. "There have also been good talks with Turkey."


"The liquidity of 1,700,000 billion has lost 30 percent of its power as a result of inflation. We intend to delete four zeros from the national currency, which should be done quickly," Hamati was quoted as saying.

https://www.almaalomah.com/2019/01/06/380098/

How much was the fiscal deficit in Iraq’s budget for 2019?

1/2/2019

An increase in the rate of deficit and severe problems in the volume of revenues and transfers and allocations, as confirmed by the Finance Committee parliamentary balance of the two thousand and nineteen.


The member of the Committee Ahmed Al-Saffar that the balance of the year two thousand and nineteen has seen an increase in the fiscal deficit of twenty-six trillion dinars to twenty-seven trillion dinars,

noting that the government did not take all the proposals of the Commission in relation to the points supposed to be amended in the draft financial budget for the next year .


Al-Saffar also said that the draft budget law did not take into account the current situation of Iraq, problems in the liberated provinces, and the relationship between the governments of the center and the region, stressing that the parliamentary finance committee will have an opinion on the draft budget in its current form.

On the other hand, the member of the Finance Parliament Mohammed al-Darraji said that the budget law is very far from the approach of the government of Abdul-Mahdi, pointing out that the final accounts of previous governments did not reach Parliament until the moment and the new government to claim them.

Darraji added that the debts of Iraq exceeded 100 billion dollars in recent years and the central bank to support the budget through treasury bonds and raise the price of the dollar.

As for the problem related to the share of Kurdistan in the budget, a member of the Finance Committee on the mass of the Kurdistan Islamic Group, Ahmed Hama Rashid, the governments of Baghdad and Erbil to comply with all items of the federal budget regarding the share of the region of the budget and the payment of the obligations of the export of oil, Citizens or their living resources.


The Parliamentary Finance Committee hinted at the re-amendment of the federal budget allocations for the year two thousand and nineteen again to the government, because of the failure of the governmental committee to respond to most of its observations and suggestions of deputies.

https://www.alsumaria.tv/news/256800…D8%A7%D9%85/ar