Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
The market finally woke up from its multi-month slumber, increasing by +14.7% for the month as measured by the Rabee Securities RSISUSD Index, in the process turning the year’s loss of -11.8% as the end of April into a gain of +1.2%.
The market’s turnover, while promising relative to the recent past, is still low relative to the last five years since the market’s peak. While, the average daily turnover increased +83% from April’s dismal levels, yet it is only about +11% above the average of the last year, which in turn was a low turnover year, as can be seen from the chart below.
However, within the relatively low turnover, the market saw a return of its animal spirts in the form of a stunning rally in the Bank of Baghdad (BBOB) which was up +62.5% for the month. Other leading banks rose such as the National Bank of Iraq (BNOI) +31.0%, Mansour Bank (BMNS) +20.0%, and Commercial Bank of Iraq (BCOI) +10.0%. Other stocks joined the rally with telecom operator Asiacell (TASC) +14.6% and Pepsi bottler Baghdad Soft Drinks (IBSD) +7.0%. Part of the catalyst for the banking sector’s rise was the end of foreign selling as covered here in the last few months, plus the emergence of modest foreign inflows in a number of leading banks such as BBOB and BMNS. The inflows were small, as can be seen from below, nevertheless the combined impacts of increasing foreign inflows vs. decreasing foreign outflows had an oversized positive influence.