Nasdaq Helps Set Up Iraq Erbil Bourse After Qatar Stake Sale

Nasdaq OMX Group Inc. is helping to set up a trading system for the Erbil Stock Exchange, which Iraq’s semi-autonomous Kurdish region plans to start operating by June, the new bourse’s chairman said.

At least 25 companies will list shares on the Erbil exchange by the end of 2014, Abdullah Ahmed Abdulrahman said today in an interview in the northern Iraqi city. Trading will begin with an estimated volume valued at 5 billion dinars ($4.3 million) to 6 billion dinars, he said.

“We aim to open a gateway for foreign investors in Iraq,” he said. The Kurdish enclave’s first stock exchange has also signed an 18-month advisory contract with New Jersey-based consultant Louis Berger Group Inc., he said. The Kurdistan Regional Government plans to form joint ventures with private partners in agriculture, tourism and industry and trade their shares on the bourse, Abdulrahman said.

The exchange, or ESX, will compete with the Baghdad-based Iraq Stock Exchange, which received a boost in February when mobile telephone operator Asiacell Communications PJSC listed its shares. Asiacell’s stock offering was fully subscribed and doubled the Baghdad stock market’s value from $4.66 billion last year, Taha Ahmed Abdul-Salam al-Rubaye, the Iraq exchange’s chief executive officer, said at the time. Nasdaq OMX is also helping to upgrade the Iraq exchange’s trading system, he said on June 28.

Zain Listing

“We hope there will be an agreement between the ISX and the ESX when it is launched, as this can increase liquidity in Iraq,” Shwan Taha, chairman of Baghdad-based Rabee Securities, said in an interview in Erbil. The market value of the Baghdad bourse could grow to $15 billion with the upcoming listing of the Iraqi unit of Mobile Telecommunications Co., Kuwait’s largest mobile operator known as Zain, he said.

The developments come days after Qatar Holding LLC, a unit of the Middle Eastern emirate’s sovereign wealth fund, bought NYSE Euronext’s 12 percent stake in the Qatar Exchange to become its sole owner. NYSE Euronext assisted with changes at the Qatar Exchange that almost doubled the bourse’s market capitalization and contributed to MSCI Inc.’s decision in June to upgrade the exchange to emerging market status from frontier, according to an Oct. 1 statement from Qatar Holding and NYSE Euronext.

Kurdish authorities in northern Iraq have been disputing with the central government in Baghdad over energy agreements, revenue sharing and land rights. The Kurds estimate their crude reserves at 45 billion barrels, enough to meet U.S. demand for almost seven years, and are building an export pipeline for oil as a step toward economic self-sufficiency.

Iraq, with 150 billion barrels in reserves excluding Kurdish deposits, is the second-biggest producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia.

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