By John Lee.

Iraq has been ranked in 130th place in the Forbes Best Countries for Business index, out of the 161 countries measured.

The index gauges the Best Countries for Business by rating nations on 15 different factors, including property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape and investor protection. Other metrics included were workforce, infrastructure, market size, quality of life and risk.

The top three positions were taken by the United Kingdom, Sweden and Hong Kong, while the Central African Republic, the Republic of Congo and Guinea-Bissau were at the bottom of the list. Libya was ranked in 152nd place.

According to the report:

“Overregulation has made it difficult for Iraqi citizens and foreign investors to start new businesses. Corruption and lack of economic reforms – such as restructuring banks and developing the private sector – have inhibited the growth of the private sector.”

More on Iraq’s ranking here.

(Source: Forbes)

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Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 20th December 2018).

Note: ISX will be closed during December 26, 2018 – January 1, 2019 due to the end-of-year closing operations. The next session will be held on Jan. 2, 2019.

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

The RSISX index ended the week at IQD669 (+0.1%) / $721 (-0.5%) (weekly change) (-17.5% and -13.7% YTD change, respectively). The number of week traded shares was 26.6 bn and the weekly trading volume was IQD10.7 bn ($8.9 mn).

ISX Company Announcements

  • According to the ISX announcement, the opening price of the IQD5.0 mn class bonds (CB125) will be IQD5,291,507 on Sunday (Dec. 23, 2018). [Table: 2.3]
  • AL- Kindi of Veterinary Vaccines Drugs (IKLV) will resume trading on Dec. 23, 2018 after discussing and approving 2017 annual financial results and deciding to distribute 4% cash dividend (IQD0.04 dividend per share, 3.1% dividend yield). The opening price will be IQD1.24 with +/-10% change.
  • ISX will suspend trading of Iraqi Agricultural Products (AIRP) starting Dec. 23, 2018 due to the AGM* that will be held on Dec. 27, 2018 to discuss and approve 2017 annual financial results.
  • ISX suspended trading of Iraqi Agricultural Products and Marketing Meat (AIPM) starting Dec. 19, 2018 due to the AGM* that will be held on Dec. 24, 2018 to discuss and approve 2017 annual financial results.
  • Middle East Producing & Marketing Fish (AMEF) resumed trading on Dec. 18, 2018 after discussing and approving the financials of the year ending Mar. 31, 2018 and deciding to distribute 20% cash dividend (IQD0.2 dividend per share, 2.05% dividend yield).
  • ISX suspended trading of National Chemical & Plastic Industries (INCP) starting Dec. 18, 2018 due to the AGM* that will be held on Dec. 23, 2018 to discuss and approve 2017 annual financial results.
  • Asiacell (TASC) announced that the company would start distributing 100% cash dividend (IQD1.00 dividend per share) starting Dec. 18, 2018.
  • Cross Transactions: 24.7 bn shares of Trust International Islamic Bank (BTRU) on Dec. 19, 2018, which represents 9.9% of BTRU capital.

Fitch Ratings has assigned Trade Bank of Iraq (TBI) a Long-Term Issuer Default Rating (IDR) of ‘B-‘ with Stable Outlook.

According to Saudi Gazette, this makes TBI the first bank in Iraq to get B- from Fitch.

IDRS AND VIABILITY RATING

TBI’s IDRs are driven by the bank’s Viability Rating (VR) and underpinned by potential sovereign support.

TBI’s VR of ‘b-‘ is constrained by the operating environment in Iraq, which can be volatile and challenging, and where TBI generates 85% of its business volume (on- and off-balance sheet exposure). Therefore, the operating environment and broader country risks influence TBI’s standalone risk profile.

TBI’s company profile is a relative strength for the rating. It captures the bank’s important trade finance role, as Iraq’s primary bank for financing imports, leading market share in Iraq (30% of sector assets), and largely government-led business in terms of lending, off-balance sheet transactions and customer deposit funding.

TBI was set up in 2003 by the Coalition Provisional Authority (the transitional government of Iraq at the time) with the support of a consortium of 13 major international banks from 13 countries, which provided technical and operational expertise. TBI is now fully operational and is systemically important to Iraq.

TBI’s key strategic objectives are to build a universal banking franchise in Iraq (with growth in domestic retail banking and project finance) and expand regionally through acquisitions. The latter is partly driven by the government’s efforts to reintegrate Iraq in the international financial markets. This also opens the bank to significant execution risks if the expansion is not managed adequately. The bank currently has a representative office in Abu Dhabi and has recently been granted licence to open a branch Saudi Arabia.

Asset quality is a rating weakness. TBI has a very high impaired loan ratio (41% at end-2017). Most impaired exposures were originated during 2014-2015 in a period of political turmoil and heightened security risks with the rise of ISIS in Iraq. Recent impaired loan generation is attributable to the drop in oil prices given the high oil dependence nature of the Iraqi economy (oil accounts for more than 50% of GDP). TBI’s impaired loans include both cash loans and trade finance facilities that got impaired (moved onto balance sheet). Under new management, TBI has made strong strides in recoveries, which total USD640 million to date in 2018 (2017: USD210 million).

TBI has a satisfactory funding and liquidity position, helped by substantial government deposits. Profitability is also satisfactory, with core net interest income growing in 2017 despite slow business volume growth due to conflict and low oil prices.

Capitalisation is a relative strength, with TBI reporting very strong regulatory Basel I total capital adequacy ratio and Fitch Core Capital ratio of 67% at end-2017. At the same time, these strong metrics should be viewed in the context of 0% risk weightings applied to all of TBI’s sovereign and government exposure. TBI is expected to report regulatory capital ratios under Basel III in 2019.

For now, TBI’s leverage, as defined by the bank’s tangible common equity/tangible assets ratio, which was a satisfactory 16.7% at end-2017, is a more reasonable measure of capitalisation in our view.

TBI has around USD3.7 billion equivalent of Iraqi dinar deposits trapped in the Kurdish region due to a political dispute with the central government, which would eliminate TBI’s equity if deducted. TBI expects to recover this amount due to ongoing discussions between both parties. These deposits are excluded from TBI’s reported liquidity ratios (Basel III liquidity coverage ratio of 186% and net stable funding ratio of 162% at end-9M18), which are very healthy.

SUPPORT RATING AND SUPPORT RATING FLOOR

TBI’s Support Rating of ‘5’ and Support Rating Floor of ‘B-‘ reflect Fitch view that sovereign support, while possible, cannot be relied upon.

Fitch believes that the authorities would have a strong propensity to support TBI in case of need. This considers the role played by TBI on behalf of the government, the bank’s systemic importance, as well as its 100% state-ownership. Nevertheless, Fitch’s view is that sovereign support cannot be relied upon given Iraq’s own creditworthiness (as indicated by the sovereign’s ‘B-‘ IDR) and potential delays in providing timely and sufficient support due to country risks including an uncertain political environment in Iraq.

RATING SENSITIVITIES

IDRS AND VR
TBI’s IDRs and VR are sensitive to a change in the Iraqi sovereign rating. They are also sensitive to further asset quality deterioration or an increase in country risk, leading to more challenging operating conditions. Finally, the VR is also sensitive to TBI making a major acquisition abroad that could materially change its overall risk profile.

SUPPORT RATING AND SUPPORT RATING FLOOR
TBI’s SR and SRF are also sensitive to a change in the Iraqi sovereign rating. They could be downgraded/revised if Fitch views that the state’s willingness to support the bank is diminishing, for example in the event of a change in TBI’s role or a material reduction in government ownership.

The rating actions are as follows:

Trade Bank of Iraq
Long-Term IDR assigned at ‘B-‘: Outlook Stable
Short-Term IDR assigned at ‘B’
Viability Rating assigned at ‘b-‘
Support Rating assigned at ‘5’
Support Rating Floor assigned at ‘B-‘

(Sources: Fitch, Saudi Gazette)


Washington gives Baghdad a new 90-day deadline to import Iranian energy
12/21/2018


The United States reached an
agreement in principle with Iraq extending a 90-day exemption period for sanctions against Iran, allowing Baghdad to continue importing Iranian gas, which is critical to Iraq’s energy production.


According to Reuters, "the extension was reached on Thursday, when the 45-day waiver was due to be completed during a visit by an Iraqi delegation to Washington, according to Iraqi officials who are directly familiar with the negotiations.


A senior Iraqi government official and a central bank official told Reuters the talks were continuing on Friday to finalize details, including how to push Iran to import energy.


And according to Reuters, the US president , Donald Trump administration said that Iraq , Iran must not be paid in US dollars or euros.


Washington initially gave Iraq a 45-day concession on Iranian gas when it re-imposed sanctions on Nov. 5 after months of negotiations.


Iraq relies heavily on Iranian gas to feed power plants, and imports about 1.5 billion standard cubic feet per day across pipelines in the south and east.


Iraqi officials said they needed about two years to find an alternative source.


Washington has said it wants to exclude Iranian influence in the Middle East, including Iraq, where Iran controls politics and trade.


Iraqi Prime Minister Adel Abdul Mahdi said on December 11 that the United States was working with Iraq on the issue of Iranian gas because it was "linked to a very sensitive issue is electricity."


The ongoing shortage of energy supplies has sparked protests this summer in southern Iraq, which is still plagued by a three-year war against a terrorist organization.


The prime minister, who took office in October, met with US Energy Secretary Rick Perry in Baghdad this month. Perry, who came with a delegation of more than 50 businessmen, also met Iraqi oil and electricity ministers.

http://aynaliraqnews.com/index.php?aa=news&id22=110960

The first Iraqi bank to receive an internationally recognized credit rating
12/19/2018



The credit rating agency Fitch Ratings has rated B-B with a stable outlook.

The decision reflects the institution’s continued efforts to implement its comprehensive economic reform program.


The Bank of Iraq’s classification of credit rating B – to be the first Iraqi bank to obtain a credit rating official by a rating agency global, the main factors that lead to a positive assessment is to improve the growth prospects and the business environment and security situation, Budget, thereby reducing the debt-to-GDP ratio over the medium term.

All of the Bank’s financial and banking operations have been evaluated according to internationally recognized Fitch standards, which represent the Bank’s overall financial health with a focus on financial reporting, portfolio management, profitability and diversification, as well as liquidity, income and other banking factors.

Faisal Al-Hims, Chairman of the Board of Directors of the Iraqi Bank for Trade, said that the risks to the classification are balanced at the present time, pointing to the importance of the role of security stability in the country during recent times in improving indicators of foreign investment and the recovery of the commercial market.

He expressed his happiness with the result of the credit rating, describing it as a major achievement as the first of its kind for the Iraqi banks, and that it is in line with the principles of sovereignty in Iraq.

Commenting on the Fitch Ratings decision, Mr. Faisal Al-Hims said: "The strength of the balance sheet, the high level of profitability in the BTI’s business, coupled with liquidity, diversification strategy in the corporate and retail sectors, confirm the growth and employment opportunities resulting from it.

The creditworthiness of the Iraqi economy and the quality of services provided to the Iraqi citizen, as well as our success in providing innovative banking products and services, which demonstrates our relentless efforts in implementing our strategic initiatives. "

"We have achieved many achievements that have won numerous awards and accolades in recent years, and we continue to relentlessly pursue our vision with greater enthusiasm and determination."

It is worth noting that the Iraqi Trade Bank has achieved great achievements since its opening in 2003, and continues to play a key role and influence in the development process of Iraq.

The success of the Bank’s efforts is directly related to the stability and prosperity of Iraq and will have a long-term positive impact on Iraqi society.

The Iraqi Bank for Trade has a network of banking branches in Iraq which plays a very important role in identifying sources of financing and securing projects.

As a leading and trusted institution among international banking institutions, the Bank has opened a representative office in the UAE in 2017.

Since then, the Bank has established joint working and cooperation relationships with leading international banks and financial institutions to finance infrastructure projects inside Iraq, Reconstruction of Iraq.

It is worth noting that BTI is a leading financial institution in Iraq and has financial transactions with a network of 417 international banks in 61 countries around the world.

At the end of 2017, the total assets of the Iraqi Trade Bank amounted to US $ 19.300 billion, with a net profit of US $ 362.432 million.

The Iraqi Trade Bank has a local branch network of 25 branches across Iraq with 122 ATMs and cash deposit.

He is considered one of the most important banks in the Middle East for his international reputation, which enabled him to win many awards.

This success is attributed to the confidence of customers and citizens in the Bank, which has played a prominent role in maintaining the leading position.

http://sumer.news/ar/news/31732/%D8%…84%D9%8A%D8%A7

By John Lee.

The State-owned Trade Bank of Iraq (TBI) is reportedly looking to acquire a lender in Turkey, the country’s biggest trade partner, after abandoning a previous attempt.

Chairman Faisal Al Haimus is quoted by The National as saying that the TBI is keen on a conventional bank rather than a Sharia-compliant bank, but he declined to name a target.

Buying a Turkish bank would be the TBI’s first overseas acquisition, which will be financed from $350 million the lender earmarked for buying assets.

More here.

(Source: The National)

The central banks of Iran and Iraq are finalizing negotiations to begin trade in their own currencies, chairman of Iran-Iraq Chamber of Commerce said.

Speaking to Tasnim, Yahya Ale-Eshaq said negotiations between the central banks of Iran and Iraq are under way to reach an agreement on using rial and dinar in bilateral trade.

Once finalized, the agreement would allow the banks of the two countries to issue letters of credit on the basis of Iranian rial and Iraqi dinar, he added.

Ale-Eshaq also noted that the value of Iran’s exports to Iraq in the first eight months of the current Iranian year (March 21- November 21) reached $8 billion, equal to the total amount of exports to Iraq in the previous year.

On Saturday, secretary general of Iran-Iraq joint chamber of commerce, Hamid Hosseini, said the daily value of Iran’s exports to Iraq stands at $45 million and sometimes reaches $70 million.

Iraq’s new Foreign Minister Mohamed Ali Alhakim has made it clear that his country cannot cut off trade ties with Iran under the US sanctions, saying the value of annual trade between Iran and Iraq amounts to $12 billion.

(Source: Tasnim, under Creative Commons licence)

Negotiations between Iraq and Iran to adopt the local currency trade of the two countries
12/17/2018

Shafaq News / Negotiations are underway between the Central Bank of Iran and the Iraqi to finalize the opening of credit between the banks of the two countries officially through the use of the Iranian riyal and the Iraqi dinar.

"We have no problem with exports to Iraq, because our exports have reached 8 billion dollars in the last 8 months," said Yahya al-Ishaq, head of the Joint Iranian-Iranian Chamber of Commerce.

He added that "negotiations are underway and close to completion between the Central Bank of Iran and Iraq to be the process of opening credit through banks and formally through the adoption of the riyal and the dinar."

He stressed that if the agreement was signed by both countries, the banks of the two countries will be able to open documentary credit L / C to each other.

The Chairman of the Joint Iranian-Iraqi Chamber of Commerce said that the financial transactions of the traders of the two countries are currently underway through banking and a limited number of banks.

http://www.shafaaq.com/ar/Ar_NewsReader/d3f4d6b3-15a3-4781-bed0-675313bce919