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Review of Middle East Economics and Finance

Ed. by Dibeh, Ghassan / Assaf, Ata / Cobham, David / Hakimian, Hassan / Henry, Clement M.

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Volume 10, Issue 2

The Iraqi Stock Market: Development and Determinants

Juergen Kaehler / Christoph S. Weber
  • Corresponding author
  • Institute of Economics, University of Erlangen-Nuremberg, Kochstr. 4 (17), Erlangen, Bavaria D-91054, Germany
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/ Haider Salahal-Din Aref
Published Online: 2014-08-05 | DOI: https://doi.org/10.1515/rmeef-2013-0053


The Iraqi stock market is a young and nascent market that began its operation in June 2004. This paper explains the development of the Iraq stock exchange (ISX). It is shown that some progress was achieved in its development but the market is still very small with less than 100 companies listed. Moreover, the determinants of the Iraqi stock market index are described. It is found that the ISX index is mainly driven by exchange rates, interest rates, the overall security situation as measured by an index for civilian deaths from violence, electricity as a proxy for economic activity, and the price index. Finally, this paper shows that the market still lacks efficiency. While the lack of efficiency is no surprise shortly after the opening of a market, it is noteworthy that the market is still inefficient after the introduction of electronic trading and an increase in liquidity.

Keywords: macroeconomic determinants of the stock market index; stock market returns; stock market development; Iraq; market efficiency

JEL: G15; E44; O16


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About the article

Published Online: 2014-08-05

Published in Print: 2014-08-01

Citation Information: Review of Middle East Economics and Finance, Volume 10, Issue 2, Pages 151–175, ISSN (Online) 1475-3693, ISSN (Print) 1475-3685, DOI: https://doi.org/10.1515/rmeef-2013-0053.

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