Time to invest in Iraq ?
Stock-Markets / Analysis & Strategy Nov 06, 2006 - 07:29 PM GMTBy: Nadeem_Walayat
Usually the best time to invest is when all the news is bad. Given the current situation in Iraq of escalating sectarian violence, one could assume that, that stage has now arrived, with the verdict on Saddam Hussein representing a turning point for the country.
The potential for iraq lies in its vast oil and gas wealth, coupled with an predominantly educated population and low starting GDP growth, with financial help and support from the worlds larges economy (USA), the scene is set for a long-term investment opportunity in Iraq.
However, the Iraqi Stock Exchange Index (ISX), has yet to make a bottom, as commercial activity continues to suffer, having declined by more than 60% over the last 12 months. So at this point in time, the situation is pretty tough, with no bottom in sight.
On the plus side,
the Iraqi Parliament recently passed a new investment law which opens the Iraqi economy to investors globally.
The new law provides foreign investors with adequate legal protection and with the ability to withdraw capital and profit. It also offers opportunities for significant exemptions from taxes and duties for 10 years+.
If investors still feel the urge to bottom pick, then the best way of investing in Iraq, is probably via a managed funds, such as Unit Trusts and Investment Trusts, or major oil companies that have a stake in the Iraqi oilfields.
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