Sunday, August 07 2011
US Iraq Business Council says Iraq getting safer for business
FDI for 2011 already exceeding the whole of 2010, according to the Vice President of the US Iraq Business Council
The Special Inspector General for Iraq Reconstruction (SIGIR) report, which details an increase in attacks in Iraq against US military targets, is only part of the story; the real story is the massive increases in foreign investment into the country, and the opportunities that are there for investors.
These are the thoughts of Hussain Qaragholi, Vice President of the US Iraq Business Council and Managing Partner of the investment bank Phoenix Capital, who notes that statistics can be parsed any way one chooses. What is clear, he says, is the influx in foreign capital to Iraq.
“There are several points to note: first, while there has been an uptick in attacks against US military targets, civilian casualties for the first six months of this year are lower than first half of 2010 and continues in the downward trend since the height of civilian casualties in 2007. Second, FDI in the first six months of this year has exceeded the total FDI in 2010, so any violence uptick associated with military withdrawal is not having any effect on FDI.”
In fact, Qaragholi noted, there has been a doubling in FDI from this point last year, and that Iraq in 2010 already attracted seven per cent of all FDI into the Middle East – making it the fourth-ranked country for FDI.
The investment, he notes, is not sector-specific, but across the board in portfolio. “The Iraq Stock Exchange (ISX) is up about 40 per cent this year, making it one of the top performing stock indices globally. We're going to see the telecom IPOs, which may double or triple the market value of the ISX in the near future,” he said.
Everyone talks about oil and gas in Iraq, and the country is indeed the last major frontier for oil, with most analysts predicting 6-7m bpd production over this decade, but Qaragholi said there's a lot of other interesting investment opportunities to look at, including major housing and telecom deals, downstream and hospitality opportunities.
And in terms of sovereign credit risk, he is positive too. “The Iraq sovereign bond, the Iraq 2028s, is yielding 6.70 per cent when compared to Russia and Mexico at 7.50 per cent and 8.30 per cent respectively, and Iraq's five year CDS is at 335 bps when compared to Dubai at 815 bps.
“The world has woken up, it seems, to Iraq's potential beyond just oil.”
http://www.cpifinancial.net/v2/News.aspx?v=1&aid=8958&sec=The%20Economy
