Understanding the RSISX Index: A Comprehensive Guide to Iraq’s Market Benchmark

The RSISX Index stands as the definitive benchmark for Iraq’s emerging financial markets, providing investors with crucial insights into one of the Middle East’s most dynamic frontier economies. Developed by Rabee Securities, this index tracks the performance of Iraq’s most significant publicly traded companies across multiple sectors, offering a reliable framework for evaluating opportunities in this developing market landscape.

What Is the RSISX Index and Why Does It Matter?

The RSISX Index is a market value-weighted benchmark created and maintained by Rabee Securities, one of Iraq’s premier investment firms established in 1995. This index specifically tracks selected companies listed on the Iraq Stock Exchange (ISX), providing a reliable barometer for the Iraqi market’s overall performance. Updated quarterly, the RSISX balances stability with adaptability to remain relevant while avoiding excessive volatility.

For international investors, the RSISX serves as the primary gateway to understanding Iraq’s financial ecosystem. Its significance extends beyond simple market tracking, as it represents the collective performance of Iraq’s most important publicly traded enterprises. Rabee Securities’ established regional presence—with headquarters in Baghdad, offices in Erbil and Suleymani, plus a representative office in Istanbul—lends substantial credibility to the index.

By tracking companies across banking, telecommunications, consumer goods, and other vital sectors, the index provides a multidimensional view of Iraq’s economic evolution. This sectoral diversity allows investors to identify growth patterns and understand how various industries respond to Iraq’s changing economic landscape.

Additionally, the RSISX offers invaluable historical context that illuminates Iraq’s financial market journey, enabling investors to distinguish between short-term fluctuations and fundamental economic shifts, identify cyclical patterns, and develop more informed investment strategies.

How Is the RSISX Index Calculated?

The RSISX Index employs a market value-weighted methodology that proportionally represents companies based on their economic significance and free float. Unlike price-weighted indices where higher-priced stocks exert disproportionate influence, the RSISX’s free float weighted market capitalization approach ensures that larger enterprises appropriately influence the index’s movements, aligning with international best practices while reflecting Iraq’s unique market structure.

The calculation process begins with determining each component company’s market capitalization by multiplying its current share price by total outstanding shares. These individual market caps are then multiplied with their estimated free float, and aggregated to establish the collective value of all index constituents. To derive the actual index value, Rabee Securities compares this aggregate against a predetermined base value established at the index’s inception, incorporating adjustment mechanisms for corporate actions such as stock splits, rights issues, and special dividends.

Rabee Securities implements a disciplined quarterly review process to maintain the RSISX’s relevance. During these evaluations, component companies may be added or removed based on defined criteria mainly based on, liquidity requirements. This methodical rebalancing ensures the index evolves alongside Iraq’s developing market while preventing excessive turnover.

For comparative analysis, Rabee Securities has developed specialized tools that allow investors to evaluate individual stocks against the broader RSISX benchmark, enabling market participants to assess relative performance and distinguish between company-specific developments and market-wide trends. Please click HERE to go to RS Website, Analysis Section, Compare ISX-Listed Companies page to compare RSISX Index with up to three companies in one chart.

 

What Does the RSISX Index Tell Me?

The RSISX Index functions as a comprehensive economic barometer reflecting Iraq’s broader financial health. Sustained upward momentum typically signals positive investor sentiment, improving corporate profitability, and favorable macroeconomic conditions. Conversely, persistent downward trends may indicate structural challenges or deteriorating business conditions. These directional movements provide crucial context for understanding Iraq’s economic development beyond isolated statistics.

Beyond aggregate market direction, the RSISX offers granular insights into sector-specific performance. By analyzing which component companies are driving index movements, investors can identify emerging sectoral trends—whether banking institutions are benefiting from monetary policy shifts, telecommunications companies are capitalizing on digital transformation, or consumer businesses are reflecting changing household spending patterns.

The index also serves as an essential performance benchmark against which investors can evaluate their Iraqi market portfolios. By comparing individual investment returns against the RSISX, market participants can objectively assess whether their strategies are generating alpha or underperforming the broader market, helping distinguish between skill-based results and market-driven returns.

Furthermore, the RSISX provides an interpretive lens for understanding how significant economic, political, and regulatory developments impact Iraq’s financial markets. When major events occur, the index’s reaction offers quantifiable insight into the market’s collective assessment of these changes, helping investors distinguish between meaningful structural shifts and temporary volatility.

Is the RSISX a Price Return or Total Return Index?

The RSISX Index operates primarily as a price return index, focusing on capturing market value fluctuations through share price movements. This methodology emphasizes capital appreciation dynamics, tracking how the collective market capitalization evolves as stock prices respond to changing market conditions and economic factors.

Unlike total return indices the standard RSISX formulation does not directly reflect income generated through dividend distributions. This methodological distinction means the index may understate the full investment return potential available within the Iraqi market, particularly relevant because many RSISX component companies—especially in banking and telecommunications sectors—maintain substantial dividend policies. Rabee Securities launched RSISX Total Return Index (RSISXTR) in February 2024 to better cater to the needs of the market which incorporates both price changes and dividend incomes, offering investors a comprehensive view of total returns. Performance of RSISXTR Index is provided on a monthly basis via Rabee Securities’ Daily Bulletins. Please click HERE for RS’s Research Bulletins.

For thorough investment analysis, sophisticated investors should consider both the RSISX’s price movements and the dividend characteristics of its component companies. Many banking constituents, including National Bank of Iraq, Bank of Baghdad, and Al-Mansour Bank, have historically distributed significant portions of their earnings as dividends. Similarly, telecommunications giant Asiacell has established dividend practices that contribute substantially to its total return profile.

Rabee Securities addresses this limitation by providing supplementary research that highlights dividend yields alongside price performance metrics, enabling investors to construct a more comprehensive understanding of total return potential within the Iraqi market.

How Are Dividends Reflected in the RSISX Index?

While the RSISX Index does not incorporate dividend income which results in a decline in the index, Rabee Securities Total Return Index, RSISXTR,includes dividend income. Rabee Securities implements technical adjustments to ensure dividend distributions don’t artificially distort RSISXTR index’s integrity. When component companies issue dividends, the methodology applies precise mathematical corrections that neutralize the mechanical price drops that typically occur when stocks go ex-dividend, maintaining the RSISXTR’s reliability as an accurate market barometer.

For investors seeking comprehensive return analysis, Rabee Securities provides extensive supplementary research that quantifies dividend contributions alongside price performance. This additional analysis proves particularly valuable when evaluating companies with substantial dividend policies, such as Asiacell (TASC), Bank of Baghdad (BBOB) and Baghdad Soft Drinks (IBSD), which often distribute significant portions of their earnings to shareholders.

The dividend practices across RSISX component companies reveal distinctive patterns reflecting their respective industry dynamics and corporate governance philosophies. Banking institutions typically maintain relatively predictable dividend policies tied to profitability metrics and capital requirements. In contrast, growth-oriented companies may retain more earnings for reinvestment. 

Rabee Securities offers specialized research reports that include historical dividend and dividend yield data for all Iraqi companies, enabling investors to identify attractive income-generating opportunities. Please click HERE to go to the Rabee Securities’ Dividend Reports including historical data for all ISX-listed Companies.

How Can I Compare the Return of a Stock to the RSISX Index?

Rabee Securities provides comparative analysis tools that enable investors to evaluate up to three individual companies against the RSISX Index simultaneously. This functionality generates visual representations that overlay price performance charts, allowing for immediate identification of relative strength or weakness. These visualizations can be customized across various time horizons—from days to years—supporting both tactical short-term analysis and strategic long-term performance evaluation.

When conducting meaningful comparative analysis, investors should establish appropriate time frames that align with their specific investment objectives. Short-term comparisons may reveal tactical opportunities but often reflect noise rather than fundamental divergence. Medium-term comparisons typically provide more meaningful insights into how companies are navigating current business conditions. Long-term comparisons offer the most comprehensive perspective on fundamental performance, revealing how companies create sustainable value through different market environments.

 

For comprehensive comparison, investors should integrate fundamental analysis alongside technical performance metrics. A company might temporarily underperform despite strengthening business fundamentals—or conversely, outperform despite deteriorating operational metrics. This multidimensional approach—integrating price performance, risk metrics, and fundamental analysis—enables investors to develop more sophisticated perspectives on relative value within Iraq’s market landscape.

What are the RSISX Index companies?

The RSISX Index encompasses Iraq’s most significant publicly traded enterprises across diverse economic sectors. The banking segment represents a substantial portion, including National Bank of Iraq , a leader in credits Bank of Baghdad, one of Iraq’s largest private banks with branches covering all the governorates; Al-Mansour Bank, known for retail banking innovations; Iraqi Islamic Bank, a pioneer in Sharia-compliant services; and Commercial Bank of Iraq, which focuses on growing with financial investments. These banking components often account for significant weighting due to their substantial free float weighted market capitalizations. 

The telecommunications sector features prominently through Asiacell, one of Iraq’s dominant mobile network operators. As a critical infrastructure provider, Asiacell’s performance reflects broader trends in technology adoption and digital transformation. Although it has a low free floa, its significant market capitalization ensures considerable influence within the index, with its performance providing insights into consumer spending patterns and technology penetration rates throughout Iraq.

Consumer-focused enterprises form another vital segment, offering exposure to Iraq’s growing domestic consumption. Baghdad Soft Drinks represents the consumer staples sector, while Al-Mansour Hotel provides insights into the developing business travel and tourism sectors. These businesses serve as important indicators of household spending capacity and changing consumer preferences within Iraq’s evolving economy.

The RSISX further diversifies through specialized sector components like Iraqi for Seed Production representing agriculture and Al-Mansour Pharmaceuticals providing exposure to healthcare. This sectoral diversity enables the RSISX to deliver a comprehensive picture of Iraq’s economic development across multiple industries, with regular composition reviews maintaining its relevance as market conditions evolve. (Please note, the constituents of the RSISX Index mentioned in this blog post may change in the future.)

Frequently Asked Questions

How often is the RSISX Index updated?

The RSISX Index undergoes formal rebalancing quarterly, when Rabee Securities reviews the composition to ensure it accurately represents Iraq’s market landscape. Between these formal rebalancing events, the index value is calculated at the end of each trading session based on closing prices 

Can I invest directly in the RSISX Index?

Currently, no direct investment vehicle such as an index fund or ETF exists that precisely tracks the RSISX Index. Investors seeking exposure must construct approximations by purchasing individual component stocks in proportions similar to their index weightings. 

How does the RSISX compare to other emerging market indices?

The RSISX differs from broader emerging market indices through its exclusive focus on Iraq’s economy, providing concentrated exposure to this specific frontier market. While major benchmarks like the MSCI Emerging Markets Index include hundreds of companies across dozens of nations, the RSISX offers a targeted window into Iraq’s economic development. This specialization typically results in different risk-return characteristics, including potentially higher volatility but also lower correlation with global markets, offering valuable diversification benefits for international portfolios.