Abu Dhabi's Invest AD looks at Iraqi telecoms

Iraq's stock market is predicted for strong growth, with telecoms companies eyed with particular interest, according to InvestAD.

Invest AD, the investment company backed by the Abu Dhabi Government, says Iraq's telecommunications sector is ripe for investment as the war-torn country gets back on its feet.

"As investors we're very interested in the telecoms space," said David Sanders, the company's chief investment officer. "By population, Iraq is among the most populous countries in the region."

While the security situation has improved, an armed attack near Saddam Hussein's hometown of Tikrit on Tuesday was a reminder of the instability investors must brave in Iraq. Gunmen left at least 58 dead and 97 injured, according to Agence France-Presse.

Invest AD's US$8 million Iraq Opportunities Fund, launched nearly six months ago, has already made a 22.5 per cent return by investing in banks, materials and property.

The minimum subscription is $100,000, while management fees are 0.8 per cent and performance fees are 20 per cent of net positive annual return.

There are three mobile operators in Iraq: AsiaCell, in which Qatar Telecommunications has a 30 per cent stake; Korek, in which France Telecom and the Kuwaiti logistics group Agility are looking to buy a 44 per cent stake; and Zain, the Kuwaiti telecoms group.

Mobile operators in the country have been under pressure from the government to list their shares under the terms of the licence bought in 2007. These listings, which are due towards the end of this year, would boost liquidity and attract international investors.

While equities slumped as turmoil spread across the region in recent months, stocks listed on the Iraq Stock Exchange have added nearly 23 per cent since the start of this year.

The country's benchmark, which tracks the performances of 85 listed companies, is now at 126.63 points, making Iraq the third-best performing market globally, Mr Sanders said.

Unlike most equities in the Gulf where foreign-ownership limits are common, the Iraq market is regarded as having fair access to all investors.

"It was surprising for us from what we are used to here," Mr Sanders added.



*This article has been modified to reflect the fact that the minimum subscription has changed from $500,000 to $100,000

Published: April 1, 2011 04:00 AM


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