Ahmad squints across the room at the Arabic markings in felt pen on the white aluminum board. Unlike most other investors on the Baghdad Stock Exchange, he doesn't have binoculars. Finally, he sees, and smiles. His shares in Gaseous Water Co are up in today's trading. Gaseous Water is one of 116 stocks listed on the exchange and the best performer on the 10-year-old stock market, where it's more than doubled this year. It trades at 55 dinars, or less than a US penny. Another winner: a hotel chain called the Babel.
UN weapons inspectors crisscross the country to look for weapons of mass destruction, and Iraq is preparing for a possible attack from the US. The 51 brokers and hundreds of investors crowding the gray stone floor of the stock exchange just keep on trading, feeding on any news or rumor to make picks. As in New York, London and Tokyo, it's been a bad year.
"Everything in the country depends on the political situation, and so does the stock market," says Ahmad, a 70-year-old retired government employee with a thick of white hair. He declined to give his full name.
"If we avoid a war, the market will pick up, for sure."
The stock exchange was established in 1992, one year after the Gulf War ended and economic sanctions were imposed on Iraq, to help jump-start a floundering economy. Ten years on, perhaps a thousand Iraqis trade on the floor or over the phone. Nor is the market very liquid. Its market capitalization is US$18 million, about three-fourths of President George W. Bush's net worth.
The exchange stands as an oddity in Iraq where the government runs the oil industry, the country's main source of wealth, and controls all sectors of the economy through state companies.
Still, President Saddam Hussein's government was willing to allow trading to begin freely in 66 smaller companies when the exchange was set up 10 years ago. That's also when the government allowed Iraqis and foreigners to open accounts in dollars and private banks were given licenses to operate in the country. All 16 private banks are now listed on the stock market.
The Baghdad exchange, located near Saadoun Street, one of the main thoroughfares in the center of the capital city, is in a two-story concrete building and stands next to a vegetable market. About 200 stockholders inside line up behind the barrier running across the floor of the central room.
They whisper their orders to brokers on the other side of the barrier, who write them up on the white board that lines one wall.
Some investors need binoculars to see the latest quotes before sending their buy and sell orders. There is nary a computer in sight.
Companies ranging from banks, manufacturers, or industrial and agricultural concerns are listed; investors can trade in three weekly sessions from 9:30am to noon. All trading is done manually and stock prices aren't allowed to rise or fall by more than five percent in each session to "protect our investors," says Sobhi al-Azzami, the general director of the stock exchange.
"We can't allow the market to fall into the hands of speculators," says Azzami, as he absent-mindedly plays with a papercutter. Two phones, a radio and a small television set sit on his bare and dusty desk. Above his head is a framed picture of Hussein, accused by the US and UK governments of hoarding weapons of mass destruction.
On the floor, 51 brokers are licensed to buy and sell stocks for investors. They charge 1 percent of the stock price as a transaction fee. Foreigners aren't allowed to trade, Azzami says.
Between 250 million and 300 million dinars change hands each session here, or between US$120,000 and US$143,000, says Azzami. That much money moves in less than a second on the New York Stock Exchange.
Young investor
"I can phone my orders in directly but I like coming down here to have a proper feel of the market," says Omar Rayak Ali, 23, who says he's the stock exchange's youngest investor. Because newspapers don't carry stock prices, coming to the exchange is the only way of getting an overview.
Ali recently made a gain of 75,000 dinars, or US$38, when he sold all his shares in the General Electric Co, the state-run manufacturer of Iraqi phones and television sets. He also sold most of his shares in a bicycle maker to buy pharmaceutical stocks.
An economics student at Baghdad University with an impeccable hair cut and a finely trimmed beard, Ali says he likes to come in fast and leave fast. He currently has 1.8 million dinars, or US$900, tied up in stocks.
Gaseous Water produces a popular brand of bottled mineral water, an important commodity in a country where tap water isn't always dependable though the stock has had trouble finding buyers in recent sessions. The worst performer is Al Tilal Agricultural Products, a food company. Investors can pick up 1,000 of its shares for 300 dinars.
The stock market has gained 50 percent since October, says Mahmoud, a full-time stock-picker who comes here at each session. He points out the rise came after a 200 percent decline over the past two years.
"We're breathing a little bit better these days," says Mahmoud.
Ahmad, the retired civil servant, said he bought hotel stocks in the 1990s. The embargo on Iraqi trade brought tourism grinding to a halt and the shares didn't perform. He sold his holdings in two hotel stocks in 1998. Since then, sanctions have been eased under a UN program allowing Iraq to sell oil to import medicine, food and other products, and shares in hotels such as the Babel, have rebounded.
"I could have made a great profit if I'd kept them," Ahmad said with a chuckle.
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