Zain Iraq will list 25% of its shares on the Iraq Stock Exchange during the first half of the year. The move is the result of a decision by the Iraq Communications Commission to require the three major telecoms in the country – Asiacell, Zain Iraq, and Korek Telecom – to list at least a quart of their shares by August 2011.
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Zain Iraq, a unit of Kuwait’s Mobile Telecommunications Co., had hoped to list its shares earlier, but has faced delays in registering in Iraq. It is currently in the final stages of becoming a shareholding company. Just last week, Qatar-owned Asiacell put its shares on the market with an initial public offering worth $1.3 billion.
The Zain Iraq IPO, which is being arranged by Citigroup, National Bank of Kuwait, and BNP Paribas, is expected to increase the Iraq Stock Exchange’s market capitalization by $5 billion. The Iraqi bourse has been struggling to reestablish itself since 2004, when it reopened following the US invasion. The stock exchange only began electronic trading in 2009.
Since then, the Iraq Stock Exchange has been working to increase in size and importance by encouraging companies to list. Although the bourse went from 15 companies in 2004 to 86 in 2011, IPOs have slowed down, leading to the decision to require telecoms to be listed. That process is now underway, even though all three companies missed the original August 2011 deadline.