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Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 18th October 2018).

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

The RSISX index ended the week at IQD634 (-3.8%) / $678 (-3.8%) (weekly change) (-21.6% and -18.9% YTD change, respectively). The number of week traded shares was 148.2 bn and the weekly trading volume was IQD55.5 bn ($45.7 mn).

ISX Company Announcements

  • Mosul Bank (BMFI) held an AGM* on Oct. 18, 2018 to discuss and approve 2017 annual financial results. ISX suspended trading of BMFI starting Oct. 15, 2018.
  • Iraqi Middle East Investment Bank (BIME) resumed trading on Oct. 15, 2018 due to disclosing 2017 annual financial results.
  • ISX requested AL-Sadeer Hotel (HSAD) to provide a subscription letter on the shares issued on Oct. 15, 2018 after the company’s decision to increase capital from IQD1.239 bn to IQD1.735 bn through 40% rights issue.
  • The Companies’ Registrar announced on Oct. 9, 2018 that the transfer process of the management center of Cihan Bank for Islamic & Finance (BCIH) from Baghdad to Erbil has been completed. The Companies’ Registrar requested a copy of the new adjusted contract.
  • Cross Transactions: 145.9 bn shares of Zain Al-Iraq Islamic Bank for Investment (BZII) (on Oct. 15 and Oct. 18, 2018) which represent 58.2% of BZII capital. 300 mn shares of Iraqi Agricultural Products Marketing Meat (AIPM) (on Oct. 17, 2018) which represents 6% of AIPM capital.

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Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 11th October 2018).

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

The RSISX index ended the week at IQD660 (-2.4%) / $705 (-2.4%) (weekly change) (-18.7% and -15.7% YTD change, respectively). The number of week traded shares was 2.6 bn and the weekly trading volume was IQD1.5 bn ($1.3 mn).

ISX Company Announcements

  • The Central Bank of Iraq (CBI) announced that it will hold its fourth annual conference on Dec. 10, 2018. Conference themes will be about the developmental dimension of monetary policy and the role of financial technology in economic development. (CBI)
  • Mosul Bank (BMFI) will hold an AGM* on Oct. 18, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of BMFI starting Oct. 15, 2018.
  • Ashur International Bank (BASH) resumed trading on Oct. 11, 2018 due to disclosing 6M18 and 2017 annual financial results.
  • Iraq Baghdad for General Transport (SBPT) resumed trading on Oct. 9, 2018 after discussing and approving 2017 annual financial results and to distribute 150% cash dividend (IQD1.50 dividend per share, 8.8% dividend yield).
  • Gulf Insurance and Reinsurance (NGIR) resumed trading on Oct. 9, 2018 after discussing and approving 2017 annual financial results.
  • Bank of Baghdad (BBOB) resumed trading on Oct. 8, 2018 according to ISC decision after providing answers to ISC regarding its questions about its 2017 annual report related with the following items; shipping documents account, mutual accounts, accounts receivable, projects under construction and law suits.

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Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 4th October 2018).

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

The RSISX index ended the week at IQD676 (-3.5%) / $722 (-3.5%) (weekly change) (-16.7% and -13.6% YTD change, respectively). The number of week traded shares was 25.7 bn and the weekly trading volume was IQD8.1 bn ($6.6 mn).

ISX Company Announcements

  • Mosul Bank (BMFI) will hold an AGM* on Oct. 18, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of BMFI starting Oct. 15, 2018.
  • AL- Kindi of Veterinary Vaccines Drugs (IKLV) will resume trading on Oct. 7, 2018 due to disclosing its 2017 annual financial results.
  • The following companies will be suspended from trading by the ISC starting Oct. 7, for not disclosing annual and quarterly financial reports: BASH, BWOR, BERI, MTRA, IHLI, VKHF, ITLI, IELI, IMPI, SBAG, SIGT, HTVM, HISH, IICM, IMCM, IFCM and IKHC.
  • Gulf Commercial Bank (BGUC) resumed trading on Oct. 4, 2018 after discussing and approving 2017 annual financial results and to distribute 3% cash dividend (IQD0.03 dividend per share, 15.8% dividend yield).
  • Iraq Baghdad for General Transport (SBPT) will hold an AGM* on Oct. 7, 2018 to discuss and approve 2017 annual financial results. ISX suspended trading of SBPT starting Oct. 2, 2018.
  • Depositing the shares of Asia Al Iraq Islamic Bank for Investment and Finance (BAIB) started on Sep. 30, 2018. The bank has a capital of IQD100bn paid-in capital and has completed the listing procedures. BAIB will start trading after depositing and activating 5% of the listed shares or after 21 days of depositing the company’s shares, that is, Oct. 21, 2018.
  • Cross Transaction: 24.9 bn shares of Zain Al-Iraq Islamic Bank for Investment (BZII) on Oct. 4 2018, which represents 9.96% of BZII capital.

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Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 27th Sept 2018).

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

The RSISX index ended the week at IQD700 (-0.8%) / $748 (-0.6%) (weekly change) (-13.7% and -10.5% YTD change, respectively). The number of week traded shares was 5.6 bn and the weekly trading volume was IQD3.3 bn ($2.7 mn).

ISX Company Announcements

  • The ISC invited the holders of the National Bonds / Second Issuers to deposit and register the bonds they hold in the IDC and to sell them during the period of the continuous session from 10 am to 12 pm until the maturity date on Apr. 2, 2019. The percentage change will be 5% within the upper and lower limits after the completion of all the procedures required in accordance with the instructions of government bonds.
  • The ISC sent a letter to Bank of Baghdad (BBOB) regarding the calculation of provisions in its 2017 annual report. ISC requested the bank to provide facts and procedures regarding calculating the provisions and whether or not they were calculated according to the accounting standards and the instructions of the CBI.
  • ISX requested Al-Janoob Islamic Bank (BJAB) to provide names of high authority members in the bank (BoDs and their representatives, the CEO, Finance Manager, as well as internal and external auditors).
  • Baghdad for Packing Materials (IBPM) will hold an AGM* on Oct. 11, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of IBPM starting Oct. 8, 2018.
  • Ishtar Hotel (HISH) will hold a GA on Oct. 3, 2018 to discuss the hotel’s investments. The company has been suspended from trading since Aug. 8, 2018 by an ISC decision for not disclosing 2017 annual financial results.
  • Gulf Insurance and Reinsurance (NGIR) will hold an AGM* on Oct. 3, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of NGIR starting Sep. 30, 2018
  • Al-Zawraa for Financial Investment (VZAF) will resume trading on Sep. 30, 2018 after discussing and approving 2017 annual financial results.
  • ISX announced that Asia Al Iraq Islamic Bank for Investment and Finance (BAIB), having IQD100 bn paid-in capital, has completed the listing procedures. BAIB will start trading after depositing and activating 5% of the listed shares or after 21 days of depositing the company’s shares.
  • Baghdad Soft Drinks (IBSD) invited its shareholders to visit the company’s headquarter starting Oct. 15, 2018 to receive their cash dividends of 2017.
  • Cross Transactions: 510 mn shares of Cihan Bank for Islamic & Finance (BCIH) on Sep. 23 and Sep. 26, 2018, which represent 0.2% of BCIH capital.

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

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

Note: ISX was closed today (Sep. 20, 2018) due to religious holiday, 10th Day of Muharam “Ashura”. The next trading session will be held on Sunday (Sep. 23, 2018).

The RSISX index ended the week at IQD706 (-1.8%) / $753 (-1.8%) (weekly change) (-12.9% and -9.9% YTD change, respectively). The number of week traded shares was 892.6 mn and the weekly trading volume was IQD544 mn ($446.9 k).

ISX Company Announcements

  • Gulf Insurance and Reinsurance (NGIR) will hold an AGM* on Oct. 3, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of NGIR starting Sep. 30, 2018
  • Original shares of Al-Hamraa for Insurance (NHAM) resumed trading on Sep. 19, 2018 after discussing and approving 2017 annual financial results and increasing the capital from IQD5.0 bn to IQD7.0 mn through 40% bonus issue.
  • Cihan Bank for Islamic & Finance (BCIH) resumed trading on Sep. 18, 2018 after discussing and approving 2016 and 2017 annual financial results and to distribute 11.8% cash dividend (IQD0.118 dividend per share, 4.5% dividend yield).
  • Al-Harir for Money Transfer (MTAH) resumed trading on Sep. 18, 2018 after discussing and approving 2017 annual financial results.
  • Kurdistan International Bank (BKUI) will hold an AGM* on Sep. 22, 2018 to discuss and approve 2017 annual financial results. ISX suspended trading of BKUI starting Sep. 18, 2018.

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Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 13th Sept 2018).

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

The RSISX index ended the week at IQD719 (+0.3%) / $767 (+0.1%) (weekly change) (-11.3% and -8.2% YTD change, respectively). The number of week traded shares was 2.5bn and the weekly trading volume was IQD1.2bn ($1.0mn).

ISX Company Announcements

  • Iraq Baghdad for General Transport (SBPT) will hold an AGM* on Oct. 7, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of SBPT starting Oct. 2, 2018.
  • Babylon Hotel (BBAY) will hold a GA on Oct. 1, 2018 to elect five new private sector representatives. The company has been suspended from trading since Aug. 8, 2018 for not disclosing the annual financial report.
  • Gulf Commercial Bank (BGUC) will hold an AGM* on Sep. 29, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of BGUC starting Sep. 25, 2018.
  • Kurdistan International Bank (BKUI) will hold an AGM* on Sep. 22, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of BKUI starting Sep. 18, 2018.
  • Iraqi Islamic Bank (BIIB) resumed trading on Sep. 13 after discussing and approving 2017 annual financial results and deciding to distribute 3% cash dividend (IQD 0.03 dividend per share, 7.3% dividend yield).
  • Bank of Baghdad (BBOB) will hold an AGM* on Sep. 17, 2018 to discuss and approve 2017 annual financial results. ISX suspended trading of BBOB starting Sep. 12, 2018.
  • Cihan Bank for Islamic & Finance (BCIH) will hold an AGM* on Sep. 15, 2018 to discuss and approve 2017 annual financial results. ISX suspended trading of BCIH starting Sep. 12, 2018.
  • Asia Al Iraq Islamic Bank for Investment (BAIB) has completed the legal procedures to change the company name from United Company for Money Transfer (MTUN) to Asia Al Iraq Islamic Bank for Investment (BAIB), the company’s activity from money transfer to Islamic banking and increase the capital from IQD45 bn to IQD100 bn.
  • Karbala Hotels (HKAR) completed the procedures to increase its capital from IQD5.0 bn to IQD7.5 bn through 50% rights issue on Sep. 3, 2018.
  • Al-Harir for Money Transfer (MTAH) will hold an AGM* on Sep. 13, 2018 to discuss and approve 2017 annual financial results and to discuss merging with Al-Ameen Al-Arabiya for Money Transfer. ISX suspended trading of MTAH starting Sep. 10, 2018.

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Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 6th Sept 2018).

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

The RSISX index ended the week at IQD717 (-2.4%) / $766 (-2.4%) (weekly change) (-11.6% and -8.3% YTD change, respectively). The number of week traded shares was 4.4bn and the weekly trading volume was IQD2.4bn ($1.9mn).

ISX Company Announcements

  • Al Taif Money Transfer (MTAI) will hold an AGM* on Sep. 23, 2018 to discuss and approve 2017 annual financial results. The company has been suspended from trading since Dec. 12, 2017 related with its decision to being converted into an Islamic bank.
  • Kirkuk for Producing (IKFP) will hold an AGM* on Sep. 15, 2018 to discuss and approve 2009, 2011, 2012, 2013 and 2014 annual financial results. In the AGM, the company will elect five original and alternative BoDs and discuss re-list shares of IKFP on the ISX. (Note: IKFP has been delisted from the ISX in Dec. 2013)
  • National Company for Tourism Investment (HNTI) resumed trading on Sep. 6, 2018 after discussing and approving 2017 annual financial results and to distribute 7% cash dividend (IQD0.07 dividend per share, 0.9% dividend yield).
  • Iraqi Islamic Bank (BIIB) will hold an AGM* on Sep. 8, 2018 to discuss and approve 2017 annual financial results. ISX suspended trading of BIIB starting Sep. 4, 2018.
  • Credit Bank of Iraq (BROI) resumed trading on Sep. 4, 2018 after disclosing 2017 annual financial results.
  • Region Trade Bank for Investment and Finance (BRTB) resumed trading on Sep. 3, 2018 after discussing and approving 2017 annual financial results.
  • ISX requested National Household Furniture Industry (IHFI) on Sep. 3, 2018 to disclose the subscription results.
  • According to a letter sent by ISC to Economy Bank for Investment (BEFI) on Sep. 3, 2018, ISC decided to continue the suspension of BEFI in the ISX until the submission of full and clear financial statements by BEFI which will be prepared according to the accounting standards and audited.
  • Iraqi Islamic Bank (BIIB) disclosed that one of its shareholders (Srwa Amer Khdheir Al-Kubaisy) sold all of its 12.3 bn shares on Aug. 30, 2018, corresponding to 4.93% of BIIB paid-in capital.
  • Cross Transaction: 255 mn shares of Cihan Bank for Islamic & Finance (BCIH) on Sep. 5, 2018, which represents 0.1% of BCIH capital.

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.

The market followed through with its longer-term bottoming process as the July interim bottom was tested this month. After having rallied 14.5% in July from an important technical level, August saw a retest with the index retracing to 6-8% above it. The market ended the month down -5.9% and -6.0% for the year.

Trading volumes have been low (see chart below) with August being the hottest month of the year and the peak of the summer holidays. This year it coincided with the Eid holidays, the continuation of the demonstration that began in July and the prolonged uncertainty over the government formation – all of which put the market’s action in perspective.

Monthly Turnover Index (green) vs RSISUSD Index (red)

(Source: Iraq Stock Exchange, Rabee Securities, Asia Frontier Capital)

From a longer perspective, the current test of the July bottom is part of a much larger bottoming process, in which the index is testing the major multi-year low made in May 2016. Given the significantly improving macro picture for Iraq, the most likely outcome is for a continuation of the bottoming process, with the uptrend’s timing highly dependent on the return of liquidity into the broader economy.

The thesis of the return of liquidity is supported by the latest budget data from the Ministry of Finance showing a budget surplus of about USD 12.5bn for January-June 2018, which argues for a year-end surplus higher than the USD 18.8bn that was argued for here a few months ago. The variance is driven by higher oil prices and exports than assumed earlier. Based on data showing an average price of about USD 65.5/bbl for January-August 2018, and the direction of oil prices, it would be reasonable to assume that the average Iraqi oil price in 2018 could be higher still by USD 3-5/bbl.  Coupled with higher oil exports, they would imply a year-end budget surplus of potentially USD 24.5bn – equal to about a 19% stimulus for the non-oil GDP vs. the earlier estimated 14.5%.

Supporting this line of thinking is the gradual appreciation of the market price of the USD vs. the IQD over the last few weeks. This premium has been range bound between about 1.5% to over 2% over the few weeks, after hitting lows of around 1.2% in June. This is likely to be a function of a recovery of government spending and a tentative recovery in consumer spending with the resultant increase in demand for imports – it should build on the first signs of this recovery as seen by the 13% year-over-year increase in imports in 2017 as the chart below shows.

Iraq’s Imports 2003-2017

(Source: https://tradingeconomics.com/iraq/imports)

The link between the market price of the USD versus the IQD and recovery in consumer spending is a result of the dollarization of the economy, in that that the strength or weakness of the IQD is a function of the demand-supply balance for USD, and not a specific USD weakness or strength. While, this could be due to the re-imposition of the sanction on Iran and the likely higher demand of USD, as argued in “Iran, Sanctions and Iraq: The Bigger Picture” this is unlikely given that Iran’s access to the USD was severely restricted following the signing of the JCPOA.  As such, there is no reason to expect that the re-imposition of sanctions would change thigs much, and thus the most likely explanation is increased demand for imports due to a tentative recovery in consumer spending.

The implications for this line of thinking can be substantial for the oversold banking sector given its leverage to the recovery in imports. It was shown in “Of Banks and Budget Surpluses” that trade finance revenues – a major source of revenue growth – suffered severely during the years of conflict and low oil prices, which contributed to the decline in their earnings, and subsequent dismal price performance in 2018.

Further recovery in consumer confidence, once liquidity returns, should lead to higher imports, which in turn should lead to an increase in the premium of the market price of the USD over the official rate to a range of 2-4%, if not higher. For commercial banks’ earnings, this means a recovery in trade finance revenues and increased FX margins, which with improvements in deposit growth and quality of loans, should imply a resumption of earnings growth.

However, this improving outlook is yet to be discounted by the market. While all stock markets are a discounting mechanism, they need data to discount. Local trading on the Iraq Stock Exchange (ISX) is dominated by speculators, who tend to appreciate the true values of local assets especially at extreme valuations. However, their discounting mechanism is mostly a rear-view mirror extrapolation of the prior negative trends into the future and thus would not have taken into account this potential change in fortunes for the banking sector.

Trade Finance vs Imports 2010-2017

(Source: Central Bank of Iraq (CBI), Asia Frontier Capital (AFC))

The chart above shows the trends over the last few years in commercial banks’ trade finance revenues, Iraq’s imports and the link to government budget surplus/deficit – given the centrality of the government’s role in the economy. As can be seen from the chart, the improved imports have yet to translate to a recovery in trade finance earnings for the banks. This continues to underscore the opportunity to acquire assets that have yet to discount a full 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.

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

Note: ISX will be closed starting from Aug. 21, 2018 to Aug. 26, 2018 due to the religious holiday of Eid Al-Adha. The next session will be held on Monday, Aug. 27, 2018.

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

The RSISX index ended the week at IQD736 (+0.9%) / $783 (+0.5%) (weekly change) (-9.3% and -6.3% YTD change, respectively). The number of week traded shares was 0.6bn and the weekly trading volume was IQD1.1bn ($0.9 mn).

ISX Company Announcements

  • Al-Harir for Money Transfer (MTAH) will hold an AGM* on Sep. 13, 2018 to discuss and approve 2017 annual financial results and to discuss merging with Al-Ameen Al-Arabiya for Money Transfer. ISX will suspend trading of MTAH starting Sep. 10, 2018.
  • National Chemical & Plastic Industries (INCP) will hold a GA on Sep. 3, 2018 to elect four new private sector representatives and alternative BoD members. The company has been suspended since Jul. 4, 2018 for not disclosing 2017 annual report and 3M18 fin1ancial results.
  • Region Trade Bank (BTRB) will hold an AGM* on Aug. 29, 2018 to discuss and approve 2017 annual financial results. ISX suspended trading of BTRB starting Aug. 20, 2018.

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Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 16th Aug 2018).

Note: ISX will be closed starting from Aug. 21, 2018 to Aug. 26, 2018 due to the religious holiday of Eid Al-Adha. The next session will be held on Monday, Aug. 27, 2018.

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

The RSISX index ended the week at IQD729 (.1.9%) / $779 (-2.3%) (weekly change) (-10.1% and -6.8% YTD change, respectively). The number of week traded shares was 22.1bn and the weekly trading volume was IQD8.9bn ($7.4 mn).

ISX Company Announcements

  • Chairman of Iraqi Securities Commission (ISC), Abdul Razzaq Al-Saadi, said during an interview with newspaper Al Sabah that the obstacles of the work of the Commission is the absence of a modern law that suits the international laws, so the Commission has worked to prepare a law for it, and has completed 85% of it. He stated that within six months the law will be completed and sent to the House of Representatives. He pointed out that this law allows the development of work and the adoption of new systems, most importantly corporate governance, which are the most important pillars to attract foreign investors. (ISC)
  • The Central Bank of Iraq (CBI) has been awarded the ISO 9001: 2015 certification in the Quality Management System (LMS Certification) by the British LMS Certification. (CBI)
  • Al-Zawraa for Financial Investment (VZAF) will hold an AGM* on Sep. 25, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of VZAF starting Sep. 20, 2018.
  • Bank of Baghdad (BBOB) will hold an AGM* on Sep. 17, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of BBOB starting Sep. 11, 2018.
  • Al -Hilal Industries (IHLI) will hold an AGM* on Sep. 9, 2018 to discuss and approve 2016 annual financial results. The company has been suspended from trading since Jul. 4, 2018 by an ISC decision.
  • Modern Chemical Industries (IMCI) will hold an AGM* on Aug. 31, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of IMCI starting Aug. 28, 2018.
  • Region Trade Bank for Investment and Finance (BTRB) will hold an AGM* on Aug. 29, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of BTRB starting Aug. 20, 2018.
  • Iraqi Engineering Works (IIEW) will resume trading on Aug. 19, 2018 because the company fulfilled ISX request to disclose its 2017 annual financial results.
  • Al-Khair Finacial Inv. (VKHF) will hold an AGM* on Aug. 28 to discuss and approve 2015 and 2016 annual financial results and to elect five new original and alternative BoDs. The company has been suspended since Jul. 6, 2017 by an ISC decision.
  • Modern Sewing (IMOS) resumed trading on Aug. 13, 2018 after discussing and approving 2017 annual financial results and to distribute 15% cash dividend (IQD0.15 dividend per share, 3.2% dividend yield).
  • ISX announced that Trust International Islamic Bank (BTRU), having a capital of IQD250 bn paid-in capital, has completed the listing procedures. BTRU started trading in the non-regular market starting Aug. 12, 2018.
  • Cross Transactions: 18.7 bn shares of Al-Noor for Money Transfer Co. (MTNN) on Aug. 15, 2018, which represents 41.6% of MTNN capital.