Thread: Archive News - Iraqi Dinar Think Tank - 08/09/09 - 09/01/10

Oil, Politics to drive Iraq debt yields

Iraq's sovereign bond yields are likely to creep up as the world's 11th largest oil producer heads to a January vote, but if the poll goes well, yields will return to tracking oil prices, production and global markets. Risk appetite is returning to emerging markets as the global economy recovers and support for the markets from multilateral lenders kicks in. The recovery has fed into a better performance across the board for emerging markets. Iraq is gearing up for parliamentary elections next year that will be seen as a crucial test for its nascent democracy, and the poll will be keenly watched by investors and oil majors striking deals to tap the world's third largest oil reserves.

"There is scope for political noise and statements to undermine sentiment and affect the bond price. That might be a transitory thing," said Stuart Culverhouse, chief economist at frontier markets brokerage Exotix.

"(After the election) If there was some sense that it was durable, then the attention would begin to focus on the oil prospects, oil prices and production."

Iraq sold a $2.7 billion (1.6 billion pound) global bond of restructured commercial claims in 2006, which were left over after the ousting of dictator Saddam Hussein in 2003 by U.S.-led troops. The bond matures in 2028, has a 5.8 percent coupon and starts paying back principal from 2020. The Eurobond's yields spiked in late 2008, hitting around 16 percent on the back of fallout from the global financial crisis, but have since come back down to around 9 percent. In Iraq, instability has largely deterred foreign investors, except in the oil sector, but a drop in violence in the last two years and prospects of a more inclusive election should ease some fears. Bloodshed, however, remains common.

"Obviously with the election, we wouldn't be surprised to see some noise," said Edwin Gutierrez, portfolio manager at Aberdeen Asset Management, which holds Iraqi debt. "I'm not as focused on the violence as it doesn't seem to be sectarian."

PRICING

After decades of a state-dominated economy under Saddam, Iraq is trying to deepen its financial markets, break Saddam's debt burden and rebuild its shattered economy. But Iraq's fundamentals, like under Saddam, are still driven by oil. Iraq is close to clinching a raft of deals with oil majors for prized oil and gas fields. Crude oil deals stand to catapult Iraq to the world's third largest oil producer, fill government coffers with petrodollars and boost investor confidence. Baghdad plans to auction more fields in December.

Besides the Eurobond, Iraq has said it wants to issue local treasury bonds to try to fund its 2010 budget deficit. The illiquidity of Iraq's financial markets and tax issues will remain an impediment to luring foreign investors to Iraq's nascent local debt. Baghdad has no secondary market despite having the infrastructure at the stock exchange, players said.

"There's definitely an attractive opportunity there ... The main thing will be access, getting in and getting out," said Francis Beddington, head of research at the fund Insparo.

Pricing of local bonds will also be key to attract investors outside of Iraq, and yields will probably need to be in high single to low double digits to be attractive, Culverhouse said. "There is demand. They just have to get the pricing right."

Forgiveness of Saddam-era debt has bolstered Iraq's outlook. The Paris Club has forgiven around 80 percent of Iraq's debt, and Baghdad has settled claims with dozens of other countries. Iraq and the International Monetary Fund are in talks for an IMF-funded programme, which would signal confidence in Baghdad's economic plans as it courts foreign investors.

"Improved oil production and a rebound in global oil prices will help to service this Saddam-era debt and any new debt caused by expansionary fiscal policy and aggressive post-war re-development," said Brad Phillips of IHS Global Insight.

http://www.stuff.co.nz/world/middle-...aq-debt-yields

Iraq’s Oil minister divides electorate in oil-rich southern city

Campaigning for the January general elections is in full swing in Iraq’s southern city of Basra where most of the country’s oil output and exports originate.

News from Baghdad that the elections are on hold as one of the country’s vice-presidents has refused to ratify a new law on how to administer them seems to have had little effect on the city’s election fever.

But the campaigning is not for or against a political platform. It is either pro or anti- Oil Minister Hussein al-Shahristani.

The parliament has summoned Shahristani, currently on a pilgrimage trip to Mecca, twice this year on allegations of corruption.

Placards and slogans, some calling for the minister’s resignation and others heaping praise on his performance adorn the city’s streets.

Basra has some of the country’s most prolific oil fields. It also sits on a substantial volume of Iraq’s proven oil reserves of more than 114 billion barrels.

Analysts say the campaigning may not remain peaceful if the parliament insists on summoning the minster after his return from the pilgrimage to Mecca in Saudi Arabia.

The analysts say it is likely for the tensions to spill over to the oil fields where workers are also divided into pro and anti-Shahristani lines.

The elections, so far on hold, were originally scheduled for January 20.

http://www.azzaman.com/english/index...11-23\kurd.htm

Hashemi strange message from the House of Representatives are demanding additional clarification

The Information Office of the Vice-President Tareq al-Hashemi said Monday a press statement expressing surprise at the very varied attitudes by some lawmakers about election law set aside by the Deputy President of the Republic.

The statement that "some leaders and representatives of parliamentary blocs who have put their signatures to the request filed yesterday, they themselves were the first who claimed that the unconstitutionality of the decision issued by the veto, which Mr. Hashemi are demanding a withdrawal of the veto."

He added: "If Mr. Hashemi to set aside the election law is unconstitutional, as some claim Ben-ignored, as the electoral law in force and no message here to request the withdrawal of veto of its sovereignty."

Description of the Information Office of the letter b (mysterious) and parliamentarians called for further clarification and resolution of the House position on the amendments proposed by Hashemi to the law.

http://iraq-beituna.net/iba/index.ph...55-45&Itemid=2

Melon describes Aqrarcil House about the election law as positive

MP said the Iraqi National Bloc, the beauty of melon House resolution, which was issued Monday for the forthcoming elections and a positive, noting that there is room to reverse it by the Presidency Council.

The melon of the independent press agency said Tuesday that calculated the percentage of global population growth rate was not already on the table, stressing that this does not mean that the Kurdistan Alliance gained the upper hand at the expense of other blocs adoption of this increase.

The melon that a positive resolution also gave the migrants abroad, the opportunity to vote both by his province, depending on the archives of personal identity or passport, and not relying on the specific ratios.

http://radionawa.com/ar/NewsDetailN....4756&LinkID=99

Karbouli: election law, which passed by parliament in which a large disadvantage to the displaced

MP Omar Karbouli Islamic Party said a vote on amending the election law was in violation of the Constitution and the rules of procedure of Parliament.

The Karbouli told Voices of Iraq not to form an ad hoc committee in accordance with Article 138 of the rules of procedure, as well as the non-application of legal steps as mentioned by the Constitution and rules of procedure in the fifth paragraph of the same article, which refers to amend articles Almnicodp only.

Karbouli said he did not start the first step, referred to by the rules of procedure, a vote on the Reply of the veto during the vote on Article Almnicodp out before the veto, then it did not happen.

He stressed that the law Karbouli I was the unfairness of the displaced, either this law has doubled the injustice, the only option in front of Vice President Tariq Hashimi, but to revoke it.

http://radionawa.com/ar/NewsDetailN....691&LinkID=109

Hashemi describes amend the electoral law without the constitutional and unfair

Deputy President Tariq al-Hashemi amending the election law is unconstitutional and unfair.

He said al-Hashemi as a presidential statement issued on Tuesday a decision the amendment passed by the House on the elections law contrary to the customs and political traditions adopted by the Council in dealing with sensitive national legislation of this caliber.

He pointed to al-Hashemi says he will deal with the new law with the utmost national responsibility to preserve the higher national interests, and the entrenchment of democracy, and building of the State of Justice.

http://radionawa.com/ar/NewsDetailN....759&LinkID=109

Alluding to the possibility of revoking again .. Hashemi's office: election law, which was set aside was more equitable than the amendment

Hinted Information Office of the Vice-President Tareq al-Hashemi Hashemi, that could invalidate the election law again that the law has been revoked was the most equitable of the amendment.

The Information Office of Hashemi said in a statement received by the independent press (Iba) a copy of Tuesday's decision to veto made by Hashemi and voted by the House of Representatives on Monday was based on the grounds of constitutional and legitimate grounds relating to fair displaced outside Iraq, minorities and small electoral lists.

He had been hoped the House of Representatives to abide by the constitution in dealing exclusively with the articles of law that revoked al-Hashemi, this did not happen.

The statement noted that the amendment was in clear contradiction in the method of calculating the seats between the first and second article, but guarantee a change in the number of seats allocated in some governorates, which is not contained in the proposed amendments, not to mention ignoring the Iraqis of dark outside, and displaced them, leaving this important matter to the Independent Electoral Commission in a resolution marginally ambiguous.

He also overlooked the Council on the equity of minorities, and did the same thing with the electoral lists, which is small and its presence in the legislative branch required the entrenchment of political pluralism.

He stressed that the amendment passed in the absence of national consensus, which has repeatedly stressed by al-Hashemi in his pleading to the last of which was sent yesterday to the Presidency of the Council of Representatives.

The statement said that Tariq al-Hashimi is a decision the amendment passed by the House yesterday is unconstitutional and unjust and contrary to the customs and political traditions adopted by the House of Representatives in dealing with sensitive national legislation of this caliber, adding that the Presidency of the Council of Representatives in the management of the unfortunate session yesterday bears the most of what happened.

He said what happened is a dangerous precedent will cast a negative impact on the overall political process, and those who were behind this amendment is unconstitutional and unfair and unjust bear the brunt of it.
The statement promised the previous law was rescinded that Hashemi despite its shortcomings, which tried to redress in a more equitable veto message to the Iraqis of the new law.

He noted the press office to deal with that the Hashemi resolution dealing with the amendment as its predecessor, with the utmost national responsibility, to preserve the higher national interests, and the entrenchment of democracy, and building of the State of Justice.

http://www.ipairaq.com/index.php?nam...itics&id=18075

Abdul Karim al-Samarrai: boycott of the elections contained in the latest amendment to the House of Representatives

MP Abdul Karim al-Samarrai from the bloc: "The boycott upcoming elections is possible in light of the last amendment, which was issued yesterday by the House of Representatives", alluding to "What happened a problem that could worsen in the event of failure to reach a solution."

The House of Representatives had voted to amend the election law in the adoption rate of 2,8% of the population increases for all governorates and a vote of displaced people in both outside as his province.

He said al-Samarrai told the independent press (Iba) on Tuesday said that "what happened yesterday in the House of Representatives is contrary to the rules of procedure did not apply the clauses the Constitution," blaming the presidency of parliament responsible for what he called "a farce in every sense of the meeting by allowing the floor to the President of the Legal Committee meeting, Bahaa al-running alone ".

He pointed out that "the Constitution did not apply in the voting process was the absence of a political component to this component over the marginalization of being sidelined by which the veto."

He samurai "There was a discussion with the political blocs to resolve this problem before it gets worse, pointing out that our problem in the political blocs that does not believe in the expression of genuine partnership Lecturer in the political situation for what it was in 2005 and 2006."

The Accordance Front pulled out and Iraqi National Bloc, and some of the other blocs on the voting process on the amendment.

http://www.ipairaq.com/index.php?nam...itics&id=18089

MP calls for traders not to deal with the Kuwaitis and Kuwaiti boycotting goods

Independent MP Wael Abdul Latif, traders, and capital to not deal with their Kuwaiti counterparts in Kuwait and import of goods against the backdrop of the recent decision of the Kuwaiti government not to allow traders to enter Iraqi territory. "

Abdel-Latif told the independent press (Iba) today, "Regardless of what the real reasons behind the decision, but it refers to the mood to deal with Iraqi businessmen, and this requires an expansion of trade with other countries linked to strong partnerships with Iraq."

"He does not expect there to be positive initiatives regarding this file by Kuwait and the previously announced the establishment of free trade areas between the two countries, as the decision not to allow traders indicate a lack of conviction in dealing with Iraq."

Abdul Latif called "The Iraqi Ministry of Trade to address its Kuwaiti counterpart to find out the real reasons behind this decision and its motives and clarify the decision fully, stressing that this resolution would create a reaction from dealing future Iraqi businessmen on the one hand and on the proposed investments for Kuwaiti companies in Iraq from the other."

It is noteworthy that the Kuwaiti Government had issued a decree which allowed holders to enter the nationalities of all the nations of the world, except for holders of Iraqi nationality.

http://www.ipairaq.com/index.php?nam...onomy&id=18082

Chairman of the Board of Baghdad: report by Transparency International on corruption in Iraq was exaggerated

Prime counting the Baghdad Provincial Council Report of Transparency International ranked Iraq fourth classification within the most corrupt countries, financially and administratively the amounts in it."

Kamel said Zaidi told the independent press (Iba) on Tuesday said that "Altqrierlaimkn relied upon in practice, because the organization does not have an office or a branch in Baghdad, which refers to the reliance on statements to the media of officials or personal efforts."

"The Problems salaries Baghdad Municipality and other issues related to financial and administrative corruption is serious, it can not be inclusive and make Iraq the box first."

He said Zaidi "These reports and the like play a role in the formulation of a mixed picture on the economic reality of Iraq and prevent the development of the movement of investment, stressing that government has the right of these organizations accountable for their impact on the reputation of the country."

It is noteworthy that the Transparency International issued a statement last week, it placed Iraq at the fourth place among the most corrupt administratively and financially.

http://www.ipairaq.com/index.php?nam...onomy&id=18099