Stock market and the challenges in meeting the growing financing needs

Stock market and the challenges in meeting the growing financing needs



 d. Accustomed Naji al-Hamdani


The stock market has in Iraq of great importance in the light of the major challenges facing the Iraqi economy to meet the growing financing needs. The establishment of this market and develop a centerpiece of the development of domestic financial sectors and stimulate the financial markets and investment activities. According to the system the financial market, the market for securities Iraq is economic market with financial and administrative independence manages its Board of Governors of the various segments of the economic sector investment.
has established the Iraqi market for securities known as Bourse Baghdad in 1991 Ktalpah the conditions of State in the international embargo and as procedures structural transformation in the Iraqi economy towards the private sector. As market government run by the Iraqi Ministry of Finance has absorbed during the period 1992 and 2003 about 113 Iraqi company of private equity and mixed at a rate of circulation annually more than $ 17 million.
Consistent with the new situation in Iraq, which grew after 2003 and to focus attention on the role of the private sector and deregulation of economic and openness to the outside world and then cancel the Baghdad Stock Exchange was established for securities Iraq as Iraqi Securities Commission like the American Stock Exchange under the law 74 for the year 2004. According to this approach was created two organizations the Iraqi market for securities and Securities Commission of Iraq, which since 2005 have become an independent body and become the only exchange in Iraq.
The stock market represent a market to regulate the buying and selling of securities various meets in this market investors periodically and thus become bourse tool to regulate the supply and demand for various securities. Include securities in Iraq bonds issued by the Government or its departments and facilities the state sector and treasury transfers of shares and corporate bonds Iraqi contribution and any securities Iraqi or non-Iraqi does not violate regulations that are being handled.
and since 2004 has become the Iraqi market for securities enjoy financial independence and administrative a market sector investment acts as collection savings of individuals, institutions and different sectors and works on development in order to employ the investment.
Even in April 2012 the number of listed companies in the Iraqi market for securities of more than (100) companies sectors of banking, insurance companies, industrial companies and tourism and agriculture, investment and hotels The Baghdad Company for soft drinks and the Iraqi company for carpets and upholstery. The objective of the establishment of the Iraqi market for securities to attract foreign investments and create the investment climate for investors Iraqis and non-Iraqis in order to buy and sell shares in the Iraqi Stock Exchange. The banking sector is the most effective sector in terms of the large trading volume and number of shares traded and after the manufacturing sector and the hotel sector, which is still the prices of shares traded best rates compared to the rest of the prices of other shares traded. Valawrac financial tools are long-term credit, including stocks, bonds, and represent shares rights ownership, so the shareholders are partners in the capital and thus do not get the benefit, but making a profit or bear losses depending on results of the financial position of the project, which issued these shares.
As bonds are serve as tools of credit issued by governments or enterprises and Subscribers in these bonds they are not partners in the capital, but merely creditors and are paid interest at a fixed rate determined in advance in the financial market.
It is therefore concluded that the securities are instrument ensures the holder the right to yield and guarantee him the right to part of the assets of its origin.
attract investors and ensure the continuity of the flow of funds seeking investment and the existence of financial institutions are able to absorb these funds and investing them in profitable investments are the basic requirements of the capital market. The importance of intermediaries of being a link between persons lenders and borrowers persons. The stock market of great importance in investment activity She believes the borrower credit medium-term and long-term and provide him with the guarantee to invest his money and make a profit and thus provide a fertile environment for investment and active movement of capital and give a strong impetus to the activity of special projects and mixed and thus contribute to support economic activity.
aims market also to organize and train members and listed companies in their lists a way that promotes confidence ongoing market and protect the interests and working to streamline and simplify the trading of securities orderly manner, including clearing and settlement and everything related to the sale and purchase of securities, and provide them with a free market and open system-dependent public auction works on closer ties and relations with the international securities markets, regional and Arab in order to develop the Iraqi market and to strengthen its role of financial support economic growth.
Revitalizing the work in the Iraqi market for securities and give a boost to attract the largest number of ongoing requires preparation bulletins daily, weekly, monthly and annual activity Stock financial and decisions of the Board and to clarify the data on trading volumes and price indices and do publish in the internet to identify investors and Tbesaarham investment opportunities available and encourage them to take advantage of them.
We believe it is important to focus the Iraqi market for securities on:
1 - regulating and monitoring securities trading and dealing in them to ensure safety and health of this deal and ease, speed and accuracy to protect the national economy and the interests of investors.
2 - regulating the profession of intermediaries in dealing in securities and determine the rights and obligations of the parties concerned and the ways to protect their legitimate interests.
3 - Development of savings and the development of investment awareness by encouraging investment in securities, and direct savings to serve the national economy.
4 - the collection of statistics and information, analysis and dissemination to achieve the desired objectives of securities.
5 - linkages and ties with Arab stock markets, regional and international and benefit from the methods of dealing which would help to develop the Iraqi market for securities.
To improve performance in the Iraqi market for securities Finance after 2003 has taken important measures such as the establishment body to control the Securities and control over the work intermediaries and provide information on stocks and conduct trading in accordance with supply and demand which is contrary to what prevailed in the market for the Baghdad Stock Exchange in the period from 1992 to 2003, which is where trading in accordance with ratios determined by the Ministry of Finance in advance a minimum of 5% and 10%. Maximum.
and negatives facing the Iraqi market for securities and reduce its role in stimulating financial market Iraqi many, including:
1 - The current political crisis and the security situation confused will lead to frustration mettle corporations and aspirations to maximize its profits and lead to a decline in shares of joint stock companies .
2 - The illegal practices of financial intermediaries led and lead to leakage of large amounts of foreign exchange to the outside, great damage wealth Iraq Finance.
3 - The rumors and propaganda launched by brokers or investors to achieve financial gains affect the stability of the stock market and become stock In the case of fluctuation between high and low.
4 - low awareness majority of investors and lack of knowledge of how stock trading in the financial market, which requires more guidance and direction and glances mechanisms that operate securities market.
and to stimulate and expand the market activity for securities Iraq suggest:
1 - creating a fertile environment encourages investors and international mediators to the Iraqi market in line with the regulations of the Iraqi market for securities.
2 - the establishment of ties between the Iraqi market for securities and stock markets and private-inch New York and Tokyo Stock Exchange and the London Stock Exchange and take advantage of their expertise.
3 - Encourage Log banking institutions and brokerage firms foreign, to expand the Iraqi market and increase Alciolat cash.
4 - Establish information programs to educate investors and the public benefits of investment, such as seminars and international conferences or local definition of companies and institutions the importance of investing in the stock market,
5 - issue some bonds in foreign currencies to attract foreign capital and the issuance of convertible bonds into shares in the case of the desire of the holder.
We believe that the instability witnessed the Iraqi market for securities is due to a variety of causes and factors, including the migration of national capital to the outside and soak up the banks to large amounts of Alciolat cash that led to the formation and Firat cash large outside investment product. The weakness of the Iraqi economy and investment movement adversely affect the stability of the index.
On the positive side, in the Iraqi Stock Exchange, the Stock Exchange not link Iraq to the global economy has led to the protection of foreign funds destined for the Iraqi Stock Exchange, from the effects of the international financial crisis.

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