Silk Road Management has launched the Silk Road Iraq Index (SILKIQ) and Silk Road Iraq Oil Index (SILKIO), two debut equity indices that include largest Iraq-focused companies, listed on the Iraq Stock Exchange (ISX) as well as international bourses in London, Toronto and Oslo.
The Silk Road Iraq Index currently covers 26 companies with total market capitalisation of USD12.8 billion (January 1, 2012). The Silk Road Iraq Oil index contains seven internationally listed oil & gas companies with assets and operations in Iraq with total market capitalisation of US$9.6 billion (January 1, 2012). In the first month of this year alone, the Silk Road Oil Index surged +24% while SILKIQ grew +14%.
Alisher Ali, Managing Partner, Silk Road Management, says: "Resource-rich Iraq and Mongolia are by far two most attractive frontier markets now and for years to come. In 2011, Iraq had the world's best performing equity market (up +35%), while Mongolia was the world's fastest growing economy (17% GDP growth). We estimate that Mongolia and Iraq will be the world's two fastest growing economies in 2011-2015, with GDP growth of 18% and 13% per annum respectively. Both countries have one of the lowest ratios of equity market capitalization to GDP globally which, along with massive economic growth, would translate in world beating performance of their respective equities markets in coming years. Therefore, following success of our Silk Road Mongolia index, we are excited about the launch of two new Iraqi equity indices".
A total of 19 Iraqi banks and companies locally listed on ISX are included in the Silk Road Iraq index. However, they collectively represent only 25% of the index's total market capitalisation while seven internationally listed oil & gas companies currently dominate the index. The full lists of members for both indices are provided on pp 2-3.
"It is hard to believe but the entire universe of 87 companies listed on the Iraq Stock Exchange has only less than USD5bn in total market capitalisation in the USD100bn Iraqi economy. We expect the Iraqi local equity market to boast at least USD50bn in market capitalisation by 2015 on the back of privatisation, IPOs and revaluation of asset values", says Alisher Ali.