Stock Market Guide For Beginners / The Iraq Stock Exchange (ISX)

What is a stock market?

The stock market is a complete system including the stock exchanges (the centralized trading platforms enabling buying and selling stocks and other financial securities), the network of investors, brokers, investment banks, regulators, and other participants. As a component of a free-market economy, a stock market allows companies to raise capital by offering shares (when you purchase even one share, you become a shareholder in that company) while allowing investors to benefit from the financial achievements of the listed companies through capital gains (increase in a share price) and dividends (receiving from the company’s profit).

What is a stock exchange?

A stock exchange is a platform where investors (individuals and institutions) buy and sell securities such as stocks and bonds. Investors must open a brokerage account through a licensed brokerage house to be able to trade on the stock exchange.

What is a National Stock Exchange?

National Stock Exchanges (NSEs) are the main stock exchanges in a country where companies established in that country are listed. Iraq Stock Exchange (ISX) is a national stock exchange in which only Iraqi private joint stock companies can be listed.

Is a Stock Market Different Than a Stock Exchange?

A stock market is a broader concept including the stock exchanges, investors, brokers, investment banks, and regulators. A stock exchange is a centralized trading platform where investors buy and sell mainly stocks and other securities like bonds. The largest stock exchanges in the world are New York Stock Exchange (NYSE), Nasdaq, and Shanghai Stock Exchange (SSE).

Is the Iraq Stock Exchange performance an economic barometer for Iraq?

Yes, ISX broadly follows the economy of Iraq. Until 2014, Rabee Securities’ RSISX Index showed an upward trend in-line with the increase in oil prices and growing economy. While after 2014, with the decline in oil prices and emerging security issues the index showed a downward trend until mid-2020 which also affected by the Corona pandemic. Since mid-2020, RSISX Index has been in a significant and ongoing upward trend reflecting the growth in the economy, and improvement in the security issues. (Please subscribe to our YouTube channel, “Rabee Securities Media” to watch the videos of the Program “Stock Market Week”, our tutorial videos about investing in the ISX, and interviews made with RS).

How can the Iraq Stock Exchange play a major role in the economy?

By attracting capital to listed companies. The majority of Iraqis today do not have viable outlet for their savings, and ISX will provide them good future buy in to the growing economy. This capital could be used to fuel the private sector.

What are the advantages and disadvantages of investing in a stock market?

The most important advantage of investing in a stock market is having easy entrance to and exit from company investments. Making risk allocation is easy in a stock market by investing in companies operating in different industries. Another advantage is knowing exactly at any time the value of your investments. On the other hand, investors need to consider that investing in stocks carries risks because the value of stocks can fluctuate based on many factors such as financial performance of the company, market conditions, and investor sentiment.

Is there a stock exchange in Iraq?

This question “Is there a stock exchange in Iraq?” is one of the questions that we heard the most. The answer is a big “YES”.

What is the number of listed companies on the ISX?

The total number of listed companies on the Iraq Stock Exchange are 103* (33 of them trade on the Non-Regular market, and 15 of them trade on the Undisclosed Companies Market). The breakdown of the number of companies by sectors are as below (*As of October 9, 2023): Banking (42), Industry (20), Services (11), Hotels & Tourism (9), Agriculture (8), Investment (6), Insurance (5), Telecom (2). (*As of October 9, 2023) (To get more details please go to the recent RS_Daily Bulletin).

In which sectors I can invest in the ISX?

There are 8 sectors that can be invested in the ISX. The ranking of sectors by the size* of the sectoral Mcap are as follows: Banking, Telecom, Industry, Hotels & Tourism, Services, Agriculture, Insurance, and Investment. (To get more details please go to the recent RS_Daily Bulletin).