While the rest of the world is facing a financial meltdown, the Iraq Stock Exchange is booming.
The ISX index soared nearly 40 percent during September, boosted by increasing confidence in security gains.
The ISX is only open two hours a day, three days a week and brokers track trading activity on the floor with colored markers and white bulletin boards instead of computers. But investors are seeing gains, especially in the hotel sector, even as markets elsewhere are taking a tumble.
"I don't think that the current financial crisis will hurt our economy and especially this market because we are not connected to any of the global markets and we have very few foreign investors," said Omar Mouwaffak, a 73-year-old trader resting on a bench along the wall.
Foreigners comprise less than 3 percent of the daily volume, officials said, but with the improving security situation on the ground and a lack of attractive options elsewhere investors hope that could change.
"I think that some foreign investors who are afraid to pump their money in the affected economies will pump their money in here, though not necessarily huge amounts," said Salam Hassan Jawad, a 44-year-old trader and father of two, standing in the hall with two cell phones in his hands.
Iraq is in a unique position rebuilding its post-war economy with plenty of oil reserves and still largely dependent on U.S. money rather than international investment. That's reflected in the stock market, which only has 95 Iraqi companies listed and a daily volume of $1 million to $2 million.
Still, the Iraq Stock Market's chief executive officer isn't gloating. He's worried Iraq's greatest asset — oil — could prove its Achilles' heel.
"I believe we're still far from what's happening in the world in the financial markets. But in the end you must know we are part of this world. I believe somehow we will have some problems," Taha Abdul-Salam said Sunday in an interview at his office above the busy trading floor.
Abdul-Salam is worried dropping oil prices, which have plunged nearly 50 percent from a summertime high of $150 per barrel, will force Iraq to readjust its projected $79 billion budget surplus.
The lack of electronic trading is another problem.
"There are many funds thinking to invest here in Iraq. They send e-mails, they contact my brokers. They like to collect information," he added. "But some of those funds are waiting for the automation because they like to invest in the international way."
"We still trade in the manual way," he added.
Promoted by U.S. authorities, the independent Iraq Stock Exchange opened in June 2004 to replace the defunct Saddam Hussein-era Baghdad Stock Exchange, which was riddled with corruption.
It saw brisk trading in the beginning, with $10 million changing hands on a single day, but business tapered off as violence spiked and affluent Iraqis fled to neighboring countries, taking their money with them.
Abdul-Salam, who has a Master's degree in economics from Baghdad University and speaks English, sees an opportunity to get them back — stressing plans are under way to implement electronic trading.
"Those who ran away, we are trying to convince them that you must get back because we have good security now in Iraq. We are trying to build the country," he said.
Abdul-Salam said the biggest sector remains banking, but growth in hotels is driving up the overall index.
"Since September, the index going up because there is high demand in buying hotel shares," he said. "The other sectors didn't face any losses in their prices so the index is going up."