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TBI puts Bank Acquisition Plans on Hold

By John Lee.

The state-owned Trade Bank of Iraq (TBI) has reportedly put plans to buy a Turkish commercial bank on hold because of the fall in the Turkish lira.

TBI chairman Faisal al-Haimus told Reuters that the bank is keen to expand its footprint in Turkey, Iraq’s largest trading partner.

According to the report, TBI has assets of around $20 billion, and is responsible around 80 percent of the trade finance business in Iraq.

(Source: Reuters)

GardaWorld Weekly Security Report

GardaWorld, a global leader in comprehensive security and risk management, has made its weekly security report available to Iraq Business News readers.

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As Iraq Sanctions Iran Trade, Saudi Arabia Boosts Border Crossing

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

By Kamal al-Ayash.

As Iraq Sanctions Iran Trade, Saudi Arabia Boosts Border Crossing

Opening the Arar border crossing on Iraq’s border with Saudi Arabia could help locals economically. But analysts say it’s also about international influence.

“Work is underway to re-open Arar for commercial purposes before the upcoming Haj season in a manner that benefits both Iraq and Saudi Arabia,” said Abdul Aziz al-Shammari, the Saudi ambassador to Iraq. In a televised interview announcing that the border crossing is to be permanently opened, he said that the Iraqi and Saudi sides have agreed on everything required for the reopening of the crossing for commercial purposes.

This is not the first time that Saudi Arabia announced its approval for the reopening of the border crossing, and with every such announcement voices supporting normal relations with Saudi Arabia are heard. Local residents also say the border crossing opening will boost economic recovery in the area.

However, the issue of ownership of the border crossing remains a significant stumbling block: It is located within the borders of the Nukhayb district, approximately 300 kilometres southwest of Ramadi, which is in the Anbar province .

The Nukhayb district was created in 1960 and remained part of Anbar province’s Rutba district until 1978 when it was annexed to Karbala for 14 months. It was returned to the Anbar province in 1979 as a result of a crisis between the local population of the Nukhayb district and Ahmad Hassan al-Bakr, a former President of Iraq, after which it became a separate district in 2016, following a vote by Anbar provincial council members.

The Arar crossing point is located on the Iraqi-Saudi border, 97 kilometres southwest of the Nukhayb district, and since 2003 has officially only opened during the pilgrimage season so that Iraqi pilgrims can travel to the holy site of Mecca in Saudi Arabia. The border crossing has two routes; the first passes through the Karbala province and the second passes through the Anbar province.

The local government in the Anbar province highlights the success of its security and service operations every pilgrimage season, while at the same time stressing that this is done without financial allocations to the border crossing. It is also a way of confirming its ownership of the Nukhayb district and the Arar border crossing.

Taha Abdul Ghani, a member of the Anbar provincial council, told NIQASH that “no province other than Anbar has the right to administrate the Arar border crossing, as all documents prove that the Nukhayb district and Arar border crossing fall within the administrative borders of the Anbar province. Any other claim is a slander and a violation of Anbar’s rights.”

“Anbar province has administrated the Nukhayb sub district for 15 years. It allocated huge amounts of money to services and projects in the Nukhayb district in support of all sectors, as well as for logistical services to ensure the success of security plans and the travel of pilgrims through the Arar border crossing.”

In addition to its importance for commercial and tourism purposes, the Saudi-Iraqi border crossing is significant for various local and international political parties for political and security reasons. Observers and experts say that any developments related to the Nukhayb district tend to increase tensions and they stress that economic issues are not the only reasons.

“Controlling the Nukhayb district and the Arar border crossing from the Iraqi side has one specific reason,” retired military man, Mohammed Kartan explains. “Anbar wants to maintain the border crossing with its Sunni environment, specifically the Gulf, and Karbala and Najaf want to impose their control and influence to isolate Sunni elements from their support in the Gulf.

“Whoever controls the Jdaidet Arar border crossing and the Nukhayb district controls important transportation routes between Iraq and Syria that were created when the Islamic State group occupied most of the cities of the Anbar province. These routes were created in an attempt to find alternative ways to bring financial and logistical support to Syria without having to pass through extremist-occupied areas.”

The reopening of the border crossing could serve as an important outlet for Iraqi and Saudi trade, but it is a painful economic blow to Iranian trade, which heavily and directly depends on the Iraqi market.

Kareem al-Nouri, a leader of the popular crowd forces, told NIQASH that “if we assume good intentions on the part of Saudi Arabia, the decision to resume business permanently at the Arar border crossing is a good and useful decision which restores relations between Iraq and Saudi Arabia. However, we believe that the decision is of a political nature and its timing is not appropriate, especially with the US sanctions on Iran.”

“The opening of the border crossing, which is located in a sensitive and important city that is still categorised as a disputed area, could trigger a real crisis that may evolve into a conflict,” al-Nouri said. “Announcing the opening of the border crossing at this time is not a popular decision and it should be reconsidered.”

DNO Presses Foot on Accelerator in Kurdistan

DNO ASA, the Norwegian oil and gas operator, today announced plans for its first dividend distribution to shareholders in 13 years following release of strong half-year 2018 results, including revenues of USD 289 million which were up 83 percent from the same period last year. The Company also reported a net profit of USD 61 million and free cash flow of USD 142 million during the first half of the year.

“With growing production and robust and reliable revenues, the dividend announcement underscores confidence in our strong growth prospects,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani (pictured). “Kurdistan is back and so is DNO,” he added.

The Company continues to ramp up activity in the Kurdistan region of Iraq, where fast track development of the Peshkabir field is expected to boost output by another 15,000 barrels of oil per day (bopd) to 50,000 bopd by yearend.

The Company, the most active driller in Kurdistan, has three rigs operating across its licenses with a fourth to be added next month.

Two rigs will be active at the flagship Tawke field to reverse natural field decline through workovers and the drilling of two wells in the main Cretaceous reservoir and two wells in the shallow Jeribe reservoir.

Operations will commence at the Baeshiqa license with another rig to be mobilized to spud the first well in September as part of a back-to-back, three-well exploration program. DNO acquired a 32 percent interest in and operatorship of the Baeshiqa license last year, joining ExxonMobil (32 percent), the Turkish Energy Company (16 percent) and the Kurdistan Regional Government (20 percent).

At Peshkabir, the fourth rig will spud Peshkabir-8 in 10 days followed by Peshkabir-9 in October. Early production and successful appraisal have raised previous field proven (1P) and proven and probable (2P) reserves. Two newly completed wells, Peshkabir-6 and Peshkabir-7, will commence testing by the end of this month before being placed on production. Peshkabir-6 is key to unlocking further Cretaceous and Triassic reserves.

“Peshkabir is proving prolific in production and has generated over USD 300 million in gross revenue since startup last year or three times the investment,” said Mr. Mossavar-Rahmani.

Elsewhere, DNO recently completed the sale of its Tunisia assets and relinquished Block SL18 in Somaliland as part of the Company’s ongoing rationalization of its portfolio through divestment of non-core assets and focus on expanding operations in Kurdistan and Norway.

Offshore Norway, the Company recently added six new exploration licenses for a total of 21 licenses and plans to participate in one exploration well in the fall, followed by at least five wells next year.

DNO retains indirect interests in North Sea assets through its 28.23 percent strategic stake in Faroe Petroleum plc and, given the size of its shareholding, will request seats on the board and has asked for an extraordinary general meeting to be called for this purpose.

DNO exited the second quarter with a cash balance of USD 584 million in addition to USD 288 million in marketable securities and treasury shares. The Company’s outstanding bond debt stands at USD 600 million.

The planned annual dividend distribution of NOK 434 million (USD 50 million equivalent), payable in two tranches, is subject to shareholder approval. To facilitate the distribution of the planned dividend, the DNO Board of Directors will convene an extraordinary general meeting on 13 September 2018 (i) to seek approval for payment of a dividend of NOK 0.2 per share in H2 2018 to be distributed to shareholders of record on 13 September 2018 (as registered in the VPS on 17 September 2018), and (ii) to seek authorization to approve an additional dividend payment of NOK 0.2 per share in H1 2019.

(Source: DNO)

Iraq Stock Market Market

Advertising Feature

Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 16th Aug 2018).

Note: ISX will be closed starting from Aug. 21, 2018 to Aug. 26, 2018 due to the religious holiday of Eid Al-Adha. The next session will be held on Monday, Aug. 27, 2018.

Please click here to download a table of listed companies and their associated ticker codes.

The RSISX index ended the week at IQD729 (.1.9%) / $779 (-2.3%) (weekly change) (-10.1% and -6.8% YTD change, respectively). The number of week traded shares was 22.1bn and the weekly trading volume was IQD8.9bn ($7.4 mn).

ISX Company Announcements

  • Chairman of Iraqi Securities Commission (ISC), Abdul Razzaq Al-Saadi, said during an interview with newspaper Al Sabah that the obstacles of the work of the Commission is the absence of a modern law that suits the international laws, so the Commission has worked to prepare a law for it, and has completed 85% of it. He stated that within six months the law will be completed and sent to the House of Representatives. He pointed out that this law allows the development of work and the adoption of new systems, most importantly corporate governance, which are the most important pillars to attract foreign investors. (ISC)
  • The Central Bank of Iraq (CBI) has been awarded the ISO 9001: 2015 certification in the Quality Management System (LMS Certification) by the British LMS Certification. (CBI)
  • Al-Zawraa for Financial Investment (VZAF) will hold an AGM* on Sep. 25, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of VZAF starting Sep. 20, 2018.
  • Bank of Baghdad (BBOB) will hold an AGM* on Sep. 17, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of BBOB starting Sep. 11, 2018.
  • Al -Hilal Industries (IHLI) will hold an AGM* on Sep. 9, 2018 to discuss and approve 2016 annual financial results. The company has been suspended from trading since Jul. 4, 2018 by an ISC decision.
  • Modern Chemical Industries (IMCI) will hold an AGM* on Aug. 31, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of IMCI starting Aug. 28, 2018.
  • Region Trade Bank for Investment and Finance (BTRB) will hold an AGM* on Aug. 29, 2018 to discuss and approve 2017 annual financial results. ISX will suspend trading of BTRB starting Aug. 20, 2018.
  • Iraqi Engineering Works (IIEW) will resume trading on Aug. 19, 2018 because the company fulfilled ISX request to disclose its 2017 annual financial results.
  • Al-Khair Finacial Inv. (VKHF) will hold an AGM* on Aug. 28 to discuss and approve 2015 and 2016 annual financial results and to elect five new original and alternative BoDs. The company has been suspended since Jul. 6, 2017 by an ISC decision.
  • Modern Sewing (IMOS) resumed trading on Aug. 13, 2018 after discussing and approving 2017 annual financial results and to distribute 15% cash dividend (IQD0.15 dividend per share, 3.2% dividend yield).
  • ISX announced that Trust International Islamic Bank (BTRU), having a capital of IQD250 bn paid-in capital, has completed the listing procedures. BTRU started trading in the non-regular market starting Aug. 12, 2018.
  • Cross Transactions: 18.7 bn shares of Al-Noor for Money Transfer Co. (MTNN) on Aug. 15, 2018, which represents 41.6% of MTNN capital.

Iraqi Compliance with Iran Sanctions will “Damage Iraq’s Economy”

By John Lee.

A former under-secretary at Iraq’s Ministry of Finance has said that  ministry has said that US sanctions on Iran will impact trade activity between Iraq and Iran and, should they persist, they will damage Iraq’s economy.

Fadhil Nabi told Rudaw:

“America’s sanctions on Iran will have impact on trade exchange and activity between Iraq and Iran as there is sizeable trade between the two countries in terms of oil and gas.”

According to the report, while countries are yet to sever trade ties, the impact is already being felt on Iran’s economy, with the rial rapidly losing value.

More here.

(Source: Rudaw)

Iraq to Reduce Visa Charges for Iranian Pilgrims

By John Lee.

Iraq will reportedly reduce its visa charges for Iranian pilgrims later this year.

According to the report from Associated Press, the reduction will only apply to pilgrims of the “Arbaeen,” the anniversary of the passage of 40 days after the death of Shiite Imam Hussein, the Prophet Muhammad’s grandson.

Visas normally cost $40, but it was not reported what the new price will be.

(Source: AP)

Germany supports Training to Respond to Explosive Hazards

The Federal Republic of Germany supports joint Ministry of Interior and UNMAS training to respond to explosive hazards

This week marked the beginning of a 75-day training course in Anbar jointly organized by the Ministry of Interior and the United Nations Mine Action Service (UNMAS).

This course will be the first of its kind, with Iraqi Police instructors and UNMAS instructors working closely side-by-side to train local police in explosive ordnance disposal (EOD) and improvised explosive devices disposal (IEDD).

Explosive hazards continue to pose a significant risk for people returning to their homes, as well as for the security services providing the initial response to the explosive threat. Displaced people who are returning to former battle areas are likely to encounter explosive hazards.

One of the options available to them is to contact local police who, in turn, will be the first responders. The presence of trained local police contributes to a safer environment and mitigates the risks of casualties amongst returnees.

“Explosive hazard clearance remains of the utmost importance in order to allow displaced people to return to their homes. Such clearances are a vital part of our stabilisation efforts” said Dr Cyrill Jean Nunn, Ambassador of Germany to Iraq. “Therefore Germany remains committed to supporting UNMAS in this important task.”

“Capacity enhancement support to enable local police response to explosive hazards is critical for the re-establishment of rule of law in liberated areas” said. Mr. Pehr Lodhammar, UNMAS Senior Programme Manager. “Germany is a crucial partner for supporting explosive hazard management training and providing advice to the Government of Iraq.”

The generous contribution of EUR 4.5 million from the Federal Republic of Germany allows UNMAS to provide training and advice to National Mine Action Authorities and the Ministry of Interior to mitigate the threat from explosive hazards. This also includes a dedicated Gender Advisor who is working with relevant stakeholders (implementing partners and authorities) to mainstream gender into Mine Action processes.

UNMAS continues to train local police to provide life-saving first response in affected communities. Since January 2018, more than 370 police officers have been trained as first responders and 30 police officers are now able to train other police officers in Anbar and Kirkuk Governorates.

The Federal Republic of Germany remains the largest contributor to UNMAS in Iraq, providing a total of EUR 44.2 million since 2016.

(Source: UN)