War concerns have sent share prices lower around the world, with the Dow Jones Industrial Average down 6.8 percent since Jan. 1. Inside the Baghdad stock exchange's two-story concrete building, investors are upbeat.
The benchmark BSI index, which closed at 2,212 on Monday, has gained 31 percent this year, according to data provided by the exchange's research department. The big movers: Baghdad hotels such as the Palestine, the Ishtar and the Sadir. Investors are betting that a quick war, followed by the ouster of President Saddam Hussein, will lead to a surge of visitors and tourists.
"There's huge demand for stocks and investors are holding onto their shares and waiting for prices to rise further," says Luay Naffe, 27, a trader with Al Amin Investment Co, one of 50 brokers allowed to trade on behalf of individual investors.
The Baghdad market, where prices are scrawled on one wall in marker in the absence of computers, was one of the world's best-performing last year. Its 24 percent gain outperformed all stock markets for which Bloomberg data is available.
About 480km from the exchange, more than 225,000 American and British troops are gathered across the border in Kuwait. The US and the UK have pledged to use military force if Hussein doesn't comply with UN resolutions to disarm. They stand on one side of a fence that divides the trading floor and whisper their orders to brokers on the other side, who then write them up on a white board lining one wall.
The board is so far away that some investors need binoculars to see the latest quotes. All trading is done by hand.
"Any rumor can send prices up or down," says Wadih Makhtoum, a 66-year-old publisher. His best investment so far this year has been buying shares in the seven hotel companies that are listed on the exchange, he says.
"There's optimism about a better future," Makhtoum said. "Maybe international companies will return to Iraq someday."
The market, open Saturdays, Mondays and Wednesdays between 9:30am and noon, is volatile. Prices rose 45 percent in 2000, dropped 35 percent in 2001 and climbed 24 percent last year, with much of that gain recorded late in the year.