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Money makes the World go Round
… ‘The Iraq Stock Exchange (ISX), as measured by the Rabee Securities RSISUSD Index, started the year not with a bang but with a whimper’ …
… ‘The real economy on the other hand is showing increasing signs that liquidity is returning as the healing effects of higher oil revenues over the last two years are having a positive effect. As reported last month, this was seen in the recent recovery in broad money, or M2 which acts as a proxy for economic activity. Driving the recovery in M2 has been the growth in the monetary base M0-defined as “the sum of currency in circulation and reserve balances in Iraqi Dinars (IQD) held by banks and financial institutions with the Central Bank of Iraq (CBI)”.’ ….
… ‘The government’s financial firepower is considerable, as the latest Ministry of Finance (MoF) budget report of October 2018 shows a surplus of USD 21.5bn for the first 10 months of 2018. As such, in addition to the surplus of USD 1.5bn for 2017, this means that the government could easily achieve the estimates made here over the last few months—a two-year surplus of USD 24.5bn by end of 2018.
The immediate consequence of government spending would be improvements in consumer and business sentiment leading to a pick-up in consumer and business spending, and subsequently an economic recovery as the multiplier effect works through the economy.’ …
… ‘and so the next few months should see this translate into actual economic recovery.
If we are to go on similar experiences in other frontier markets (of declining markets while fundamentals show gradual recovery following a long basing period) then the market’s declining trend of the last few months should be followed by a sharp reversal and the beginning of a new trend.’ …
Money makes the World go Round
… ‘The Iraq Stock Exchange (ISX), as measured by the Rabee Securities RSISUSD Index, started the year not with a bang but with a whimper’ …
… ‘The real economy on the other hand is showing increasing signs that liquidity is returning as the healing effects of higher oil revenues over the last two years are having a positive effect. As reported last month, this was seen in the recent recovery in broad money, or M2 which acts as a proxy for economic activity. Driving the recovery in M2 has been the growth in the monetary base M0-defined as “the sum of currency in circulation and reserve balances in Iraqi Dinars (IQD) held by banks and financial institutions with the Central Bank of Iraq (CBI)”.’ ….
… ‘The government’s financial firepower is considerable, as the latest Ministry of Finance (MoF) budget report of October 2018 shows a surplus of USD 21.5bn for the first 10 months of 2018. As such, in addition to the surplus of USD 1.5bn for 2017, this means that the government could easily achieve the estimates made here over the last few months—a two-year surplus of USD 24.5bn by end of 2018.
The immediate consequence of government spending would be improvements in consumer and business sentiment leading to a pick-up in consumer and business spending, and subsequently an economic recovery as the multiplier effect works through the economy.’ …
… ‘and so the next few months should see this translate into actual economic recovery.
If we are to go on similar experiences in other frontier markets (of declining markets while fundamentals show gradual recovery following a long basing period) then the market’s declining trend of the last few months should be followed by a sharp reversal and the beginning of a new trend.’ …
