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Friday, August 11, 2017

BONDLADY UPDATE, 11 AUGUST

BLC Member News Highlights & Comments 8-11-17

Tlm724:    The Iraqi Trade Bank: The global market has begun to trust the future of Iraq's economy

 Banks   Economy News Baghdad: The Iraqi Bank of Commerce announced on Wednesday that the global market began to trust the future of Iraq's economy after the issuance of the country's bonds worth one billion dollars.

The Iraqi Bank for Trade in a press statement received "the economy News" a copy of it, "The issuance of bonds issued by Iraq worth one billion US dollars in the global market exceed several billion and strong requests exceeded seven times the amount required."

He added that "the Iraqi Trade Bank announces the success of his participation as director of issuance in the process of international public offering of the Iraqi Republic for the first time, where the Iraqi government issued bonds worth one billion US dollars in the world market for five and a half years and a price of 100% and a return of 6.75%.
 ...
"Citibank, JPMorgan and Deutsche Bank have been key managers in the bond issuance process. The Iraqi Trade Bank has participated as co-manager," he said, noting that "the bond was rated B-Stable by companies Fitch Ratings and S & P. ​​Bonds are also expected to fall within the Irish stock market. "

He pointed out that "the Iraqi government has organized with the banks that manage the issuance of bonds a number of comprehensive offers in London, Boston and New York and received a positive attention by investors from global investment funds, and proceeds of the IPO value of what was on the market more than seven times the amount required "He said.

"We are honored to be the co-directors of the $ 1 billion bond issue for the first time by the Iraqi government," Faisal Al-Hims, director of the Iraqi Trade Bank, said in the press release.

"We are pleased with the positive result we have received from the global capital market, where the proceeds of the subscription exceeded several times what was on the table, reflecting the confidence of the global capital market in the economic future of Iraq."
Views 537   Date Added 08/09/2017     http://economy-news.net/content.php?id=8653

Shredd:    Take a look at this part:

"...a number of comprehensive offers in London, Boston and New York and received a positive attention by investors from global investment funds, and proceeds of the IPO value of what was on the market more than seven times the amount required."

Shredd:    This is a big deal folks. Investor confidence and then some! This strong investor response will result in more investment, that is guaranteed! The rating holding is good too.

As Iraq prepares to respond economically to the lower oil prices, selling their debt like this makes sense and again, the investor appetite is awesome to see!

This should move the needle on the stability front and as security improves, the next move should be to reengage the project to remove the zeros and reflect a more realistic value to the dinar.

Investor protections are in place (kyc, balance protection, generous trade windows, etc) and this powerful confidence from investors, combined with asset management from huge international finance banks sets the stage as perfectly as we could have hoped for.

Be very encouraged. This is good to see!  Shredd

Reflection:    In coming days

Tlm724:    Thank you Shredders for all your comments today !! I am very excited about this bond issue and maybe they will offer a tranche to satisfy the demand !!! Iraq has been making ALL the right moves since the liberation of Mosul and that is not a coincidence either. Exciting times no doubt !!!

http://www.bondladyscorner.com/t183408-the-iraqi-trade-bank-the-global-market-has-begun-to-trust-the-future-of-iraq-s-economy
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Tlm724:    International Monetary Fund: Iraq's economy has declined and its reserves have fallen to 45 billion dollars

10/08/2017 09:17 | Number of readings: 357   Trend Press / Continue

The International Monetary Fund considers that Iraq is currently facing a dual economic challenge of compensating for the material losses caused by the war against Daqash, as well as the decline in oil production and prices.

The IMF said in a report on Wednesday that in 2016 real GDP of Iraq rose by 11 percent, as a result of a rise of 25 percent in oil production, "which was not significantly affected by the conflict with the" dashing "at the time.

The report added that he expects the economic activity this year will not see any increase due to a 1.5% drop in oil production due to Iraq's commitment to the agreement of the OPEC oil exporting countries and outside to reduce the level of production and also because of the very modest recovery of non-oil sectors.

He pointed out that "the decline in oil prices led to a decline in Iraq's foreign currency reserves from 54 billion US dollars by the end of 2015 to 45 billion at the end of 2016, saying that" the financial pressure continued as the government deficit increased to 14 percent of GDP in 2016 after It was 12 percent in 2015. "

However, the outlook for medium-term growth appears to be positive due to the expected improvement in the security situation and readiness to implement several infrastructure projects, although the risks remain high due to continuing security and political tensions, the IMF said.

Kuwait has been in contact for a long time with the countries of the world, the World Bank and Iraq itself to prepare for hosting a conference donors for the reconstruction of the liberated areas of Iraq, "Daash," which may be held in the first quarter of next year.

http://aletejahtv.org/permalink/176180.html

Tlm724:    International Monetary Fund: Iraq faces double economic crisis and risks remain high

Economy  Since 2017-08-10 at 12:51 (Baghdad time)   Baghdad Mawazine News
The International Monetary Fund (IMF) predicted that Iraq's economic activity this year will remain silent as oil production shrank by 1.5 percent due to OPEC's agreement to cut oil production and a modest recovery of the non-oil sector.

"The prospects for medium-term growth of the Iraqi economy are positive, and growth will return to the expected moderate increase in oil production and recovery in non-oil growth supported by the expected improvement in security and the implementation of structural reform," the IMF said in a report.

"The risks are still very high, but they are mainly due to volatility of security, political tensions and weak implementation of policies. Iraq faces a double shock resulting from the conflict with a push and drop in oil prices."    LINK


Shredd:    When an economy struggles, one tool to combat financial distress is to adjust the country's currency...just like the US recently lowering the value of the dollar.

Iraq has the same opportunity. What complicates this is the use of the dollar...but this is all good and works for our benefit imo.

Reflection:    Maybe I'm mistaken and you can explain it better... but I've always thought lowering the value of a currency made financial distress worse? Doesn't in raise inflation and prices on goods, your dollar won't go as far?

Lots of folks in America (Democrats/Bernie voters) want a minimum wage raise or a "livable wage" because folks can't survive...but none of them realize the value of our dollar has gotten weaker (more taxes/mandates and junk) so it won't go as far. Always thought a weaker currency was actually worse for the economy.

http://www.bondladyscorner.com/t183439-international-monetary-fund-iraq-s-economy-has-declined-and-its-reserves-have-fallen-to-45-billion-dollars
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Tlm724:    Central Bank: 20 financial transfer companies turned into banks

Director of Accounts Department at the Central Bank Ihsan Shamran

Banks   Economy News Baghdad:

The director of the Central Bank's accounts department, Ihsan Shamran, said that the government has drained the resources of Al-Rasheed and Rafidain banks, adding that 20 financial transfer companies have become banks.

"The government has drained the resources of Al-Rasheed and Rafidain banks and borrowed from them 25 trillion dinars to cover the salaries of companies," Shamran said in an interview with the satellite "Iraqi News" and his "Economic News", adding that "Al-Rasheed Bank and Rafidain did not offer anything because of lack of liquidity." 
​He explained that "20 companies converted to the financial banks," noting that "the draft central bank granted 6 trillion dinars to banks aimed at reducing unemployment and stimulate the economy."

He pointed out that "this project faced many challenges, including the lack of granting loans to citizens," noting that "the only housing fund, which spent its share of more than one trillion dinars."

Views 863   Date Added 09/08/2017    http://economy-news.net/content.php?id=8654

Tlm724:    "The director of the Central Bank's accounts department, Ihsan Shamran, said that the government has drained the resources of Al-Rasheed and Rafidain banks, adding that 20 financial transfer companies have become banks."

Tlm724:  If this is accurate then I suppose Iraq won't have to restructure these state banks as required by the IMF. I think they may be concentrating on The Trade Bank of Iraq as their main state bank.

Tlm724:  (see this article)   The Iraqi Trade Bank: The global market has begun to trust the future of Iraq's economy

http://www.bondladyscorner.com/t183408-the-iraqi-trade-bank-the-global-market-has-begun-to-trust-the-future-of-iraq-s-economy

Tlm724:   Here is the statement by the IMF in their review:

Press ahead with restructuring of Rasheed and Rafidain bank 
Ongoing. An external audit of the financial statements of these banks is expected by end-August 2017.

Shredd:   Agreed, especially since the 6 trillion was provided.

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