Thread: ISX Signifcance

Originally Posted by readytogo

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Is this true? We, as foreigners, cannot invest in the Vietnam SX? This is great! I'm getting excited! This makes the Iraq/Vietnam SX comparison theories null and void! BAM!

That's not the only thing which makes the VSX and ISX comparison null and void.

The VSX does NOT sell stocks at 1 dong per share. They sell them close to the USD comparable value in dongs, like the example StrongTower has shown for Iraq's neighbors. In other words you will find many stocks in the VSX for MANY THOUSANDS of dong PER SHARE.

This is unlike the ISX which has many stocks in the 1-2 IQD per share range and many in fractions of a dinar per share. That is ridiculous and as StrongTower shows, they will get absolutely killed at the present value.

They must revalue or adjust their stocks significantly upward. Adjusting their cost per share upward will all but eliminate Iraqis from participating in their own stock market. They simply do not have the disposable cash at the current exchange rates, since virtually everything they MUST purchase on a regular basis, is either imported or made locally with imported materials [i.e. their currency is weak against foreign currency (imported) price points.]

Not revaluing their currency before the opening of the ISX to foreigners would be a catastrophic blunder. They are not dumb...They certainly cannot possibly be that dumb...no freakin' way.

By the way...Excellent info StrongTower!

Originally Posted by wellwishes

That's not the only thing which makes the VSX and ISX comparison null and void.

The VSX does NOT sell stocks at 1 dong per share. They sell them close to the USD comparable value in dongs, like the example StrongTower has shown for Iraq's neighbors. In other words you will find many stocks in the VSX for MANY THOUSANDS of dong PER SHARE.

This is unlike the ISX which has many stocks in the 1-2 IQD per share range and many in fractions of a dinar per share. That is ridiculous and as StrongTower shows, they will get absolutely killed at the present value.

They must revalue or adjust their stocks significantly upward. Adjusting their cost per share upward will all but eliminate Iraqis from participating in their own stock market. They simply do not have the disposable cash at the current exchange rates, since virtually everything they MUST purchase on a regular basis, is either imported or made locally with imported materials [i.e. their currency is weak against foreign currency (imported) price points.]

Not revaluing their currency before the opening of the ISX to foreigners would be a catastrophic blunder. They are not dumb...They certainly cannot possibly be that dumb...no freakin' way.

Big Grin! Big, big, big GRIN!

I too did not know that vnd stock exchange wasnt open to foriegn investors. That makes my day alot brighter.

I can only hope.

Originally Posted by wellwishes

That's not the only thing which makes the VSX and ISX comparison null and void.

The VSX does NOT sell stocks at 1 dong per share. They sell them close to the USD comparable value in dongs, like the example StrongTower has shown for Iraq's neighbors. In other words you will find many stocks in the VSX for MANY THOUSANDS of dong PER SHARE.

This is unlike the ISX which has many stocks in the 1-2 IQD per share range and many in fractions of a dinar per share. That is ridiculous and as StrongTower shows, they will get absolutely killed at the present value.

They must revalue or adjust their stocks significantly upward. Adjusting their cost per share upward will all but eliminate Iraqis from participating in their own stock market. They simply do not have the disposable cash at the current exchange rates, since virtually everything they MUST purchase on a regular basis, is either imported or made locally with imported materials [i.e. their currency is weak against foreign currency (imported) price points.]

Not revaluing their currency before the opening of the ISX to foreigners would be a catastrophic blunder. They are not dumb...They certainly cannot possibly be that dumb...no freakin' way.

Wow! That was cool, and I actually understood it....no freakin' way! lol. Great post wellwishes. Thanks, lewscrew

Not revaluing their currency before the opening of the ISX to foreigners would be a catastrophic blunder. They are not dumb...They certainly cannot possibly be that dumb...no freakin' way.[/QUOTE]


A little slow, somewhat unmotivated (didn't want to use the L word), but not dumb. Not with their systematic way they have removed debt, dinar, and inflation. I think they know the ramifications on this, why else would they postpone twice?

Originally Posted by danny51

Vietnam is extremely self sufficient and requires very few if any imports in the area of food, fuel and goods; therefore, they keep their currency valued artificially low in order to sustain a higher level of exports by motivating other countries to import more of their goods at great prices. Think of it as the high volume low mark up approach. Vietnam can't carry on like this forever but it works for the time being. Iraq is just the opposite as they need to import almost everything and need to have good prices for their exported oil as well in order to pay for re-building their war torn country. Iraq really needs to rv in order to beat inflation and have any chance of economic success. The ISX is not the big player and will undoubtedly continue to be delayed to foreign investment until a rv is implemented.

I also believe the ISX opening will be delayed. If a large Re-val is to occur, it has to be before the ISX opens. Or if Slow Grow continues you'd think they'd have to be nearer the penny levels before ISX opens as well. While the ISX is not as significant a player in the Iraqi economy as most Stock Markets are in developed Nations, it does represent some of the biggest companies and banks in Iraq. It is critical to the future survival of Iraq. I'd be shocked if it opens 8/2/07 without some fairly significant increase of IQD value. The stock values would be too far out of sync with neighboring Middle East countries and would be at a severe disadvantage. Thus we'll either see a significant "Bold Adjustment" (ie the so called huge overnight Re-val) by 8/2/07 or at least a 6 month delay in ISX opening. My bet is the delay, but if Re-val occurs I certainly won't cry about it.

(BTW, just to note per the official ISX website ÓæÞ ÇáÚÑÇÞ ááÃæÑÇÞ ÇáãÇáíÉ the following still is posted:

The Iraqi Securities Commission (ISC) has approved and sends to the isx the rule and regulations stated below:

1. Rules for Regional Offices and depositories.

2. Rules for Electronic Trading and Automated Depository.

3. The scheduled date for the beginning of foreign investment (Non-Iraqi Trading) next august 2nd 2007.

*Once all the regulations are complete and translated to English, we will be

posting them on our website .

*Three session a week trading will begin on Sunday July 1, 2007. The trading

sessions will be held on Sundays, Tuesdays and Thursdays from that point on.

Originally Posted by lewscrew

I have a question also.

If the RV happens after ISX opens and thousands of people sell all their
stocks to make money, isn't there most likely someone else just waiting
in line to buy those stocks when they come up for sale?

I know nothing of the Stock Market but isn't that how it works?

I cash in my stocks and they become available to the next person that
is hopeing they go even higher, correct? Why would this mess up the banks?

Thanks, lewscrew

I agree with danny51 and Strongtower about the issue of ISX opening. Keep in mind that the ISX is strongly comprised of Iraqi banks. Right now the currency exchange rate is .0008 cents (or 1249 IQD to 1 USD). If it stays that way when ISX opens a large (say 1:1) Re-val would completely crash the ISX. Most ISX stocks in USD value are in the pennies level. If it were to Re-val 1:1 AFTER the ISX opens to Foreign investment there would be a massive sell off. There would not be enough (or any) buyers to take up the slack. It would bankrupt nearly every Iraqi bank. Thus they have to delay ISX opening or make some movement in exchange rate. I've crunched the numbers and don't see any alternative.

Originally Posted by MunnyBaggs

I also believe the ISX opening will be delayed. If a large Re-val is to occur, it has to be before the ISX opens. Or if Slow Grow continues you'd think they'd have to be nearer the penny levels before ISX opens as well. While the ISX is not as significant a player in the Iraqi economy as most Stock Markets are in developed Nations, it does represent some of the biggest companies and banks in Iraq. It is critical to the future survival of Iraq. I'd be shocked if it opens 8/2/07 without some fairly significant increase of IQD value. The stock values would be too far out of sync with neighboring Middle East countries and would be at a severe disadvantage. Thus we'll either see a significant "Bold Adjustment" (ie the so called huge overnight Re-val) by 8/2/07 or at least a 6 month delay in ISX opening. My bet is the delay, but if Re-val occurs I certainly won't cry about it.

(BTW, just to note per the official ISX website ÓæÞ ÇáÚÑÇÞ ááÃæÑÇÞ ÇáãÇáíÉ the following still is posted:

The Iraqi Securities Commission (ISC) has approved and sends to the isx the rule and regulations stated below:

1. Rules for Regional Offices and depositories.

2. Rules for Electronic Trading and Automated Depository.

3. The scheduled date for the beginning of foreign investment (Non-Iraqi Trading) next august 2nd 2007.

*Once all the regulations are complete and translated to English, we will be

posting them on our website .

*Three session a week trading will begin on Sunday July 1, 2007. The trading

sessions will be held on Sundays, Tuesdays and Thursdays from that point on.

Wow! My 100th post is an agreement with MunnyBaggs!

I agree 100%. Either a significant rv will happen before the ISX opens to foreigners August 2nd, or they will/MUST delay the opening. There really is no middle ground here. They open at these levels and they will NEVER recover the tremendous loss suffered as a result of such a move.

However this dire scenario seems to us, it has to look much worse from their viewpoint. Shabibi has already proven to be one the of best Central Bankers in the world. He knows the consequences.