We decided to use cumulative voting at a public assembly meeting to protect small investors.
The Chairman of the Securities Commission, Faisal Al-Haims, confirmed that the Commission is working to increase trading hours on the Iraqi Stock Exchange and solve the problems facing investors, adding that the Commission wants to open a commodity market in addition to a stock market.
Al-Himas said – in an exclusive interview with Al-Jazeera Net – that the government’s policy is to privatize some companies, by offering them for public subscription, this year, stressing that the Economic Ministerial Council is currently working to increase non-oil revenues and support the financial budget.
The following is the text of the interview:
Is the Iraqi Stock Exchange affected by the Corona pandemic?
Certainly, the stock exchange closed during the comprehensive curfew imposed last year, after the Health and Safety Cell’s decision to combat the Coronavirus, and some companies were also affected, so the volume of trading became small and reached 250 million dinars (208.3 thousand dollars), and the impact of Corona was not only in Iraq, but rather In all countries of the world, however, we have taken a series of measures that have contributed to the increase in circulation, and in some days it has reached more than 5 billion dinars (3.4 million dollars), and among these measures is to help companies solve their situations as it led to disruption and reduction of work hours in order to confront the Corona virus Due to the delay of companies in submitting financial data and suspension of their shares from trading, 6 companies have been returned to circulation, and we are now working on returning two companies.
Today, we are working to develop the stock exchange, by increasing working hours and adding two evening sessions, and within one month the topic will be ready, and will be presented to investors, as well as we are working on listing new companies, as well as opening other markets such as the Erbil Stock Exchange.
What are the reasons for the decline in interest in the stock market in Iraq?
The truth is that the Commission today has done a lot to address this imbalance, and we have become in a record time leading the report of the Arab Monetary Fund in terms of growth, as it reached 360%, and we are working to continue that, but the defect that occurred is responsible for several parties, such as the general situation of the country represented in the economic crisis and the pandemic Corona and others, as well as the suspension of trading on companies, and the failure of the Securities Commission to play its role in addressing the needs of investors and the market, and there has also become a decline in trading and stock prices, which caused losses to shareholders. Today, in the new administration of the authority, we sat with investors, the market and companies to understand their problems, and we began to solve them and the circulation began to gradually rise, and we aspire to reach its daily volume this year to 5 billion dinars (3.4 million dollars).
What are the reasons for fear of foreign investors entering Iraq?
Foreign investors were facing problems when they wanted to buy one of the shares, so the share price would rise or not be sold to them, and we were able to stop these procedures, so we made the foreigners ’request to buy shares not apparent during the trading session because it affects the transparency of the market’s work itself. Investors also complained about the information’s lack of confidentiality. At the clearing bank, we solved this problem. Our current focus is on protecting the rights of investors, such as the confidentiality of their information and the transparency of trading based on correct financial information.
When is the Hafiz Al-Ameen Bank activated?
The authority discussed the matter with the stock exchange and foreign investment portfolios, and it became clear to everyone that the lack of foreign investment is due to the lack of a trustworthy custodian. Previously, the stock exchange went twice to international banks, but these efforts did not succeed, due to poor circulation, as these banks need to have a volume of trading. More than 50 million dollars a day, to cover the costs.
The role of the Hafez Al-Ameen Bank is very important. The investor will represent at general assembly meetings, receive profits from companies and submit quarterly reports on the performance of companies and their investors. Currently, we have held several meetings with investment companies, and an offer was made to us by one of the regional banks operating inside Iraq, and it is being studied now in order to take appropriate steps to activate it.
Is there any intention to open markets for goods inside Iraq?
Yes, we are with the opening of a special market for commodities, especially since Iraq has a lot of products, including agricultural, but our focus now is on activating the stock market by listing new companies, and activating the custodian service, which will reflect positively on the economic cycle. As for the establishment of the currency market, it is It is within the jurisdiction of the Central Bank of Iraq, which exercises the role of oversight over it, and not within the competence of the Commission.
Today, the Iraqi government is working to privatize its companies, including the Iraqi Airways Company; Is the Securities Commission ready for that?
Iraqi Airways is one of the leading companies, and we expect that the IPO will succeed, and the Securities Commission provides advice on this issue, and I believe that the privatization of this company is a positive thing, and we are also working with the government to privatize another government company operating in the services sector, because we offered to convert it into a company. It is mixed and then put up for public subscription and listed in the market, so instead of the company resorting to borrowing, it will obtain financing through subscription, and its capital will be after determining its assets, and it will be listed this year, because the general listing requires time to evaluate the assets, feasibility studies and the ability of the company to succeed and attract Liquidity.
We also agreed with the Minister of Industry that experts from the Securities Commission, under my leadership, will go to explain the procedures for privatizing companies, and identify the companies that are heading towards privatization, and the Ministry of Industry is the most comprehensive currently because it has many companies, but it is very difficult to privatize 70 companies in one year, and we will choose a company or Two companies this year, provided that they are profitable companies in order to attract investors, if the company’s financial base is weak and corroded and there are no profits, then it is difficult to privatize it, so a very strong management should be brought in, and then transformed into a profitable company and then privatized.
The government is working on offering 5 trillion dinars in bonds. Is the market ready for that?
The government in previous years offered bonds and bought them by banks, and is currently working on offering 5 trillion dinars (about 3 billion and 440 million dinars), but not once, but rather at certain times, and within 6 months to a year this amount will be covered, and we are ready to activate this matter in Market, to buy it from investors and banks.
Is there a desire to amend the Securities Commission Act?
Currently we have amendments that we will submit to the General Secretariat of the Council of Ministers, and we have a future view so that the law includes the development taking place in global markets and the use of technical support.
Why did you decide to use cumulative voting in a public assembly meeting?
The use of cumulative voting is to protect small investors, so that they have a voice in the formation of the companies’ board of directors, because the decisions of the general assembly were in the hands of large investors only.
There are a number of companies in Iraq that deal with global stock exchanges, why do they not have licenses yet?
We formed a committee by order of the General Secretariat of the Council of Ministers, which is headed by me and includes in its membership the security ministries, the Central Bank and the Companies Registrar Department, and so far we have held 4 meetings, and we have reached drawing up the conditions for granting licenses, and these recommendations will be submitted to the Council of Ministers for approval, and then on these Companies obtain a work permit from the Commission for the purpose of protecting Iraqi funds.
What issues is the Economic Ministerial Council currently focusing on?
There are a number of issues that the Economic Ministerial Council focuses on, including dealing with issues that are late in the era of the previous government due to the demonstrations and the Corona pandemic, especially those related to projects. We are also working on drawing economic policies that are represented in supporting the local product, stopping imports and maximizing the state’s non-oil revenues. Great determination to accomplish these matters, as well as concern for agriculture and transforming losing companies into profitable ones by increasing their productivity, and switching departments that caused this imbalance.
How can the government support the local product and part of the border crossings outside the control of the state?
Finance Minister Ali Abdul-Amir Allawi is working to ensure that there is a customs belt around the capital, Baghdad, as it is the most important commercial center in addition to creating a link between the governorates in the north, south, west and east, and there will be local companies to check the goods in this belt, as the goods that have not paid the customs tax Take a set of measures against her.
The aim is to support the local product and revive the industry and the agricultural sector, so the more local product is supported, the greater the revenues and the less import. We have industrial companies in Iraq in various sectors that have their weight, but their mismanagement caused them to turn them into non-productive companies, and we are working to address this problem.