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Iraq Capital Markets show resilience amid regional headwinds as total return index climbs 5.9%
Baghdad, Iraq: The Rabee Securities Iraq Stock Exchange Index (RSISX Index) declined by 1.1% during the first half of 2025 (1H25), reflecting regional tensions and dividend-related adjustments. However, the index outperformed Saudi Arabia's TASI (-7.2%) and Bahrain's BHBX (2.1%), while trailing Kuwait's BKP (+17.2%), Dubai's DFMGI (+10.6%), and Egypt's EGX30 (+10.5%).
Half of the RSISX Index companies distributed dividends in 1H25, exerting downward pressure on share prices. Bank of Baghdad had the largest impact, offering a dividend yield of 13.4%. Asiacell followed with 11.5%, alongside Iraqi for Seed Production (8.9%), National Bank of Iraq (4.9%), and Mansour Hotel (0.4%). Share price increases in Baghdad Soft Drinks, National Bank of Iraq, and Al-Mansour Bank helped partially offset the broader decline.
The RSISX Total Return Index (RSISXTR), which reflects performance excluding the impact of dividend payouts and capital increases, rose 5.9% during the same period—underlining the underlying strength of market fundamentals.
Aysegul Ozge Ozgur, SVP, Head of Research at the Research Department of Rabee Securities, commented: "The first half of the year demonstrated the market's depth and resilience. While headline figures reflected dividend effects, the core investor story remains positive - anchored by high yields, improving corporate governance, and a maturing institutional framework. We continue to see compelling value in sectors that are adapting well to reform momentum".
Beyond index constituents, five non-index companies also distributed dividends during the period. Kurdistan International Bank recorded the highest yield at 25.0%, followed by International Development Bank (12.5%), Al-Khatem Telecoms (5.7%), Iraqi Agricultural Products (0.7%), and Babil Animal & Vegetable Production (0.4%).
Total trading volume on the Iraq Stock Exchange (ISX) fell 38% year-on-year to USD 150.9 million in 1H25. When excluding cross-transactions, the decline moderated to 23%, with adjusted volume at USD 117.7 million. The banking sector dominated trading activity with a 70.1% share, followed by industry (12.4%), telecom (9.4%), agriculture (3.6%), services (2.4%), and hotels and tourism (2.1%). Meanwhile, the over-the-counter (OTC) market, which became active in September 2024 and now includes 11 quoted companies, recorded USD 749.5K in total trading volume during the half.
In total, 22 listed companies recorded share price gains in 1H25, with 14 rising more than 10%. Al-Ahlyia for Agricultural Production led with a 120.0% increase, followed by Al-Ameen for Insurance (41.3%) and Kurdistan Islamic Bank (35.3%).
Macroeconomic indicators throughout the first half of 2025 supported long-term market optimism. Iraq launched its National Development Plan (2024–2028) and signed bilateral trade and infrastructure agreements with the UK. In parallel, banking reforms and accelerated digital payment adoption gained
momentum. Strategic partnerships were finalized with BP for a $25 billion oilfield development project and Vodafone for the rollout of a 5G telecom operator. In April, Iraq joined the Tabadul digital trading
platform and implemented ESG disclosure requirements for listed companies. The Arab League Summit, hosted in Baghdad in May, coincided with the launch of Iraq's first National Financial Inclusion Strategy and an $848 million investment deal in oil and petrochemicals. In June, the World Bank approved $930 million for a nationwide railway modernization initiative, while the IMF projected Iraq's 2025 GDP growth at 4.1% - among the highest forecasts in the region.
As regulatory alignment continues and capital markets deepen, Rabee Securities remains committed to delivering insight, transparency, and institutional-grade access to Iraq's evolving investment landscape.
