Table of Contents
- 1 How Does The Iraq Stock Exchange (ISX) Work?
- 2 What are the Trading Days & Hours on ISX?
- 4 How share prices are set?
- 5 What affects prices in a stock exchange?
- 6 How to Invest in the ISX?
- 7 How to open a trading account (brokerage account) to be able to start trading on the ISX?
- 8 Which investment Instruments can be invested in the ISX?
How Does The Iraq Stock Exchange (ISX) Work?
Iraq Stock Exchange is a centralized marketplace where securities (stocks and bonds) are bought and sold. The main function of the Iraq Stock Exchange is to facilitate the trading of these assets among buyers and sellers.
Please see below how the Iraq Stock Exchange generally works:
Listing: The companies need to be listed on the ISX to offer their shares to the public
There are more than 100 listed companies trading on the Iraq Stock Exchange (ISX). An Iraqi company that wants to offer its shares to the public can apply for listing on a stock exchange if it fulfills the requirements to be listed on the ISX. (Please go to ISX Law, Section 3/5)
- Market Participants: Trading occurs through the market participants
ISX’s main market participants are brokers (licensed intermediaries that facilitate transactions between buyers and sellers; they execute orders on behalf of their clients) and investors (composed of individuals, institutional investors, and traders who buy and sell securities in the market).
- Order Placement: To be able to trade, investors have to send orders for the listed securities
To buy or sell securities investors need to place orders through their brokers. The main two types of orders are “market orders” and “limit orders”. Market orders are executed immediately at the available market price. Limit orders are executed only when the market reaches the specific price set by the investor who gave the order. (Orders could be given in person electronically or via RABEE App (App Store & Google Play)).
- Order Matching: For trade to happen, buy and sell orders have to match
Iraq Stock Exchange is using NASDAQ’s X-stream Trading system to match buy and sell orders. X-stream provides ISX with a widely deployed high-end, multi-asset trading platform that complies with international standards. When a buyer’s price matches a seller’s price in the electronic platform, a trade is executed.
- Price Discovery:Ongoing order matching results in changing prices in the market
Price discovery is where a buyer and a seller agree on a price and a transaction occurs which creates a market price for the stock. Creating market price continues for all stocks from the opening of the ISX until it closes. During the trading session, ISX provides real-time information on the market prices based on the executed trades which helps investors to decide on their buying and selling price in any second.
- Transparency: Market participants need to know all the trading data to make informed decisions
Iraq Stock Exchange provides transparency by providing public access to trading data, including share prices, trading volumes, Non-Iraqis transactions, and historical information about each stock. The transparency of stock exchanges helps investors to make informed decisions.
- Clearing and Settlement : ISX ensures that transactions are settled through the clearinghouse
Iraq Stock Exchange ensures that all the transactions are settled involving the exchange of ownership and payment for the securities. Clearinghouses act as intermediaries to guarantee the trades’ completion. In Iraq,
Iraq Depository Center (IDC) operates as the clearinghouse and plays a crucial role in the settlement and clearing of transactions in the ISX.
What are the Trading Days & Hours on ISX?
ISX is open for trading 5 days a week from Sundays to Thursdays
ISX has specific trading hours and days of operation like other stock exchanges in the world. Trading is executed during the weekdays from Sundays to Thursdays, while it is closed on weekends (Fridays and Saturdays) and official holidays.
–Pre-opening period: From 9:30 to 10:00 am
–Trading session: From 10:00 am to 1:00 pm.
–The extended session for the cross transactions and special deals: From 1:00 pm to 1:30 pm.
REGULATORY OVERSIGHT: ISX is monitored and supervised to ensure fair and transparent trading practices
ISX is monitored and supervised by the Iraqi Securities Commission (ISC) to ensure that it complies with all the regulations, rules, and standards. In Iraq, The ISC is the regulatory authority responsible for overseeing and regulating the securities market in Iraq. ISC plays a crucial role in ensuring the fairness and transparency of the ISX and protecting the interests of investors.
MARKET INDICES: To assess the market performance, market indices are followed by the investors
Market indices are mainly calculated by the stock exchanges based on the performance of specific stocks to be used as benchmarks for assessing market performance. ISX is calculating “ISX Index 60”index as a benchmark for assessing market performance. Separately, there is an index calculated by Rabee Securities (RS) starting 2009, named “RSISX Index” which became a benchmark index especially for foreign investors and funds to evaluate the performance of the ISX because RS is very transparent about its float-weighted index including 10 10 most liquid stocks which updated in quarterly basis to better reflect the ISX performance. RSISX Index is calculated both in local currency (Iraqi Dinar (IQD)) and US dollar (USD).
MARKET NEWS: Developments in the market result in investors to react to these events which results in price changes
Investors follow the macro-economic and company-specific developments to decide whether to buy/sell or continue holding the stocks because news can impact stock prices. Traders and investors often react to material developments that lead to price fluctuations. ISX is publishing reports to inform the investors about the trading and developments of the companies. Rabee Securities’ (RS) Research Department prepares Daily, Weekly, and Monthly Reports depending on the announced data by the ISX and organizes and accumulates data to make it easy for investors to understand and analyze them while making investment decisions.
Below is the list of reports published by the Research Department of RS for its clients and for the public:
- Reports that are written for only RS clients:
- Company Reports on ISX-listed companies: RS is writing quarterly update reports for the banks and companies listed on the ISX to inform its clients on a quarterly basis about how they are operating by providing financial analysis, and all important developments including annual general meeting decisions such as dividend distribution and capital increase.
- Profit Before Tax Report (ISX-Listed Companies): RS is publishing a weekly update report for all ISX-listed companies comparing their profit before tax values with the same period of the previous year to show how they performed.
- Reports that are available for everyone who sign in to the website:
- RS_Daily Bulletin (Iraq Stock Exchange)
- RS_Weekly Bulletin (Iraq Stock Exchange)
- RS_Monthly Bulletin (Iraq Stock Exchange)
- Dividend Report (ISX-Listed companies)
Please GO TO RS Research Reports to follow the developments on the ISX and to reach company reports written by RS on ISX-listed companies.
Share prices are set through a mechanism called “price discovery”. It is a process by which the market determines the price of an asset or security through the interactions of buyers and sellers. Price discovery works as follows in a stock market:
- In a stock market, there are buyers who want to purchase a particular security and sellers who want to sell it.
- Buyers specify the maximum price they are willing to pay for the security (bid prices), and sellers specify the minimum price at which they are willing to sell (ask prices).
- When the bid price matches an ask price, a trade is executed, and that price is called “stock price” (or a “market price” as a broader term) which reflects the current supply and demand for it.
What affects prices in a stock exchange?
Stock prices change continuously depending on the change in supply and demand for the stock due to the changing market sentiment, a new information including macro, sectoral, and company-specific developments.
How to Invest in the ISX?
It is easy to invest in the Iraq Stock Exchange (ISX). Please see below the steps that need to be taken to invest in the ISX by buying shares of the listed companies trading on the ISX.
- OPEN a BROKERAGE ACCOUNT: Investors have to open a trading account (brokerage account) to start trading on the ISX. Please download RABEE App (App Store & Google Play) for FREE to open a brokerage account and start trading on the ISX. You can also visit RS offices to fill out the account opening forms.
- DEPOSIT MONEY: To buy shares, you need to have a cash in your account which will be enough to buy the shares. If you open an account at Rabee Securities (RS), you can deposit and withdraw money through our bank account or Zain Cash via RABEE App.
- START TRADING STOCKS: After your brokerage account is opened and you send cash, you can Buy and Sell shares through RABEE App, or by connecting with the RS team. (Websitesindeki Contact kısmına linklenmesi doğru olur)
How to open a trading account (brokerage account) to be able to start trading on the ISX?
If you are an individual or a corporate interested in investing in the Iraqi Stock Exchange, you can apply for opening a trading account in the Iraqi Stock Exchange and start your investment journey with Rabee Securities.
You need basic knowledge about the trading rules of trading in the listed shares or bonds in the Iraqi Stock Exchange. Rabee Securities provides you with all the tools and information you will need.
For more details, you can contact Rabee Securities Customer Service Team at firstname.lastname@example.org or download the Rabee Application. The requirements to invest in the Iraq Stock Exchange are different for individuals and corporations and for Iraqis and Non-Iraqis. Please click HERE for Eligibility and Requirement lists to open a trading account. (buradaki link sitede ilk sayfada OPEN A TRADING ACCOUNT” butonuna basınca açılan sayfaya linklenmeli)
Which investment Instruments can be invested in the ISX?
When you open a trading account to trade on the ISX, you can buy and sell the shares of more than 100 companies. Bonds are not trading currently on the ISX, but in the past few times construction bonds issued by the government were listed and traded, but there is a future potential for the bond market in Iraq.