The Iraqi Stock Market: A Promising Market and a Performance to Watch

Since 2019, the Iraq Stock Exchange (ISX) has witnessed notable growth and an increasing influx of investors, driven by the relative stability in the country and improvements in the security situation. Decisions issued by the Central Bank of Iraq have contributed to strengthening the financial positions of the banking sector, which is the most active in the stock market, accounting for more than 80% of total trading.

The rise in share prices of companies came with a climb in trading volume; however, it remains modest compared to financial markets in neighboring countries. In 2024, total trading on ISX exceeded 690 billion Iraqi dinars, recording a growth of 3% compared to 2023. Meanwhile, the number of traded shares rose to 809 billion, marking a 17% increase from the previous year. The market capitalization of listed companies at the end of 2024 reached over 22 trillion Iraqi dinars, reflecting a 19% increase compared to 2023.

There are two indices in ISX: the ISX60 Index and the ISX15 Index. The ISX60 Index is the main and oldest index in the market, reflecting the performance of 60 companies listed on ISX. In contrast, the ISX15 Index is a partial index introduced in 2024. It includes the 15 most active listed companies, selected based on the free float market capitalization, with the influence of any single company capped at a maximum of 20% under optimal conditions. The ISX60 Index closed at 1,073.84 points in the last session of December, marking a 20.23% increase compared to its closing in 2023. Meanwhile, the ISX15 Index closed at 1,174.65 points, recording a 10.12% increase since its launch.

When comparing the performance of ISX with markets in the region, a disparity in results becomes evident. The Dubai Financial Market Index recorded an increase of over 27% in 2024, supported by strong performance in the real estate sector, with Emaar alone posting a gain exceeding 60%. Other markets in the region saw more modest gains: the benchmark index in Saudi Arabia rose by only 0.6% during the year, while the Abu Dhabi market experienced an annual decline. In Qatar, the main index fell by 3.2% by the end of 2024.

At the beginning of 2025, the purchases made by non-Iraqi investors outperformed sales by 134%. In comparison to the same period in 2024, the ratio was lower, as sales had exceeded purchases by 23%, indicating a shift in investor tendency toward buying and maintaining positions in joint-stock companies. Compared to these markets, ISX shows positive growth. Although the rate of increase may be lower than in some neighboring markets, this growth is nevertheless considered a positive indicator reflecting improved confidence in the Iraqi market and increased investment activity.

On the other hand, there are 112 companies listed on ISX, distributed across four platforms: the regular market, the secondary market, the non-disclosing companies market, and the unlisted companies market. Despite the developments ISX has witnessed in recent years, it has not seen listings on the scale of the major telecommunications companies that entered the market in 2013 and 2015. Those listings represented a significant leap in enhancing liquidity and attracting investors. However, the market still holds considerable potential to attract more companies across various sectors. With many leading companies yet to be listed, the opportunity remains open to deepen the market and increase the diversity of investment opportunities. This requires continuous efforts from both regulatory authorities and the companies themselves to drive future listings forward.

Iraq has officially joined the “Tabadul” digital platform after signing a strategic memorandum of understanding with the Abu Dhabi Securities Exchange on April 23rd. Iraq becomes the ninth member of the platform, which is considered the first digital trading hub in the region.

Observers described this step as “positive and a paradigm shift in terms of opening up to other countries’ stock exchanges,” but they warned that the country might witness a reverse movement and capital outflow during periods of stagnation in the Iraqi market.

The accession came after the Iraq Stock Exchange and the Iraq Securities Commission—represented by MS. Jimmy Afham Toma and Mr. Faisal Al-Haimas—signed a memorandum of understanding with the Abu Dhabi Securities Exchange, chaired by Mr. Abdullah Salim Al Nuaimi.

A statement from the Iraq Stock Exchange said: “The signing ceremony was held at the headquarters of the Abu Dhabi Securities Exchange as part of enhancing mutual cooperation between both sides, based on the preliminary agreement announced between the Iraq Securities Commission and the Abu Dhabi Securities Exchange in January 2025, aiming to boost cooperation between capital markets in both countries.”

The agreement aims to “consolidate cooperation frameworks across multiple areas, including: technology, innovation, the development of trading and post-trading systems, and the exchange of best practices and techniques in trading,” according to the statement, which added that “this memorandum will help pave the way for investors and brokerage firms to conduct smooth and direct trading between the Abu Dhabi and Iraq stock exchanges. The Tabadul platform allows brokerage firms in both markets to access the other remotely, contributing to stronger market linkages and enabling Iraqi investors to reach regional and global investment opportunities.”

The statement confirmed that “by leveraging the Tabadul platform, investors in the member markets will be able to participate in each other’s IPO offerings, which helps highlight the advantages of cross-border trading and expand investment horizons.”

For his part, the head of the Iraq Securities Commission, Faisal Al-Haimas, considered Iraq’s accession to the Tabadul platform “a paradigm shift in developing the infrastructure of Iraq’s financial market, strengthening regional economic partnerships, and opening new horizons for both local and international investors.”

This memorandum comes as a culmination of a previous agreement signed in January between Faisal Al-Haimas, head of the Iraq Securities Commission, and Abdullah Salem Al-Nuaimi, head of the Abu Dhabi Securities Exchange. The agreement seeks to enhance relations and mutual investment opportunities between the two markets, along with cooperation, exchange of expertise, and the launch of educational and training initiatives for investors. Furthermore, this agreement is a precursor to Iraq’s accession to the Tabadul digital platform, which currently includes the exchanges of: Abu Dhabi, Bahrain, Astana, Kazakhstan, Central Asia, Armenia, and Amman. Other markets may join later. The platform is scheduled to launch in mid-2025.

Observers raise several questions about the impact of Iraq’s accession to this platform on trading volumes in the Iraq Stock Exchange. While the step is considered positive and a fundamental leap in terms of openness to other countries’ stock exchanges, they warn that the country may experience reverse capital movement due to stagnation periods in the Iraqi market and the limited number of listed companies.

They pointed out that “an ambitious investor looking for bolder investments may lean toward investing in other exchanges if they notice higher and more active ROI in those markets.” They added that “Companies Law No. 21 of 1997 is still in effect, which stipulates that foreign investors are not allowed to own more than 49% of the capital of joint-stock companies. This could restrict foreign investment in leading companies.”

Some called for expansion decisions to be more carefully studied and for other priorities to be addressed, such as passing a law regulating investment fund management, listing new companies, and revisiting laws that limit foreign ownership of shares in Iraqi companies, along with nationwide awareness campaigns regarding investment in the stock market.

They added: “In order for this expansion to achieve its desired goals, it must be part of a comprehensive reform vision based on well-thought-out steps, including the enactment of laws that support the establishment and management of investment funds to enhance market liquidity,” emphasizing the “need to list new companies to offer more diverse investment opportunities.”

They also called for “revisiting the laws that limit foreign investor ownership to attract new capital, in addition to launching national-level awareness campaigns to promote investment culture in the stock market, which would stimulate internal trading and increase the participation of local investors.”