Interview with Mr. Taha A. Abdulsalam | Iraq Stock Exchange

Wednesday, 24 June 2020


FEAS holds an interview with the Chief Executive Officer of Iraq Stock Exchange Mr Taha A. Abdulsalam. Ms Armenuhi Hovakimyan, FEAS Deputy Secretary General spoke with Mr Abdulsalam about ISX current operations, “work from home” benefits, how COVID-19 affects the Stock Exchange and more.  

A – Hello, this is FEAS Talks and I am Armenuhi Hovakimyan. Today my guest is the Chief Executive Officer of Iraq Stock Exchange, Mr Taha Abdulsalam. Good morning Mr Taha. Thank you for joining me.

T – Thank you.

AMr Taha, as we all passed the 100th day of the pandemic announced in March, will you please tell us how the Iraq Stock Exchange was dealing during hard time that all the World is passing and in what condition are you now?

T – Thank you for having this interview. It is my pleasure to be in this interview to discuss and talk about the situation the first time. And talking about the procedure that the stock exchange is having these days. I will tell about Iraqi procedures. We started our procedures since March. Before March we didn’t have any announced thing and we were surprised that there is something wrong. They were talking about the crisis, financial and economic crisis, that something will happen to the stock exchange and capital market, but soon we discovered that there is a pandemic and health crisis. Therefore, the Iraqi government stopped the operations and announced a curfew, total curfew since March 17th. We stopped the operations, we didn’t know what to do at the beginning because we thought it is something for 7 or 14 days till the cure will be found.
We saw it was difficult to decide without taking the arrangements and procedures to live with for that situation. I mean, we might face the problem, crisis with special procedures.
Therefore, after 35 days when government allowed us to work with 25% of the employees, with the capacity building plan and everything else, we asked the brokerage firms to trade from their offices online, as there is an Intranet between the stock exchange and brokerage firms.
So, we began trading and for the next two weeks, we were having three-day sessions per week. Usually we were having 5 sessions per week, but after 35 days of closure were had 3 sessions per week to re-arrange the operation again, worked with investors by describing that they do not need to visit stock exchange. You know, some people like to come to the stock exchange, talk to the employees, to the brokerage firms.
Thus, we asked them not to visit the stock exchange and work through the brokerage firms.

There are 42 brokerage firms in Bagdad and 2 outside the Bagdad. We succeed with that and after 2 weeks we increased the sessions to 5 trading sessions per week, just like before. But there was another wave of the pandemic, so we stopped another 2 weeks including our holiday week and now we got back on June 14 with everyday sessions and with the whole operations cycle. But it is not allowed to come to the trading hole and trade from the stock exchange premises. They are still operating from their offices.

AOkay, so you had two times of the closure of stock exchange. But in general, the stock exchange was ready to work remotely from home. Did you have a business continuity plan, contingency plan before or you were managing it on the way?

T – When we chose systems in 2007 we transferred all operations to be automatically done both for the trading and the depository. We insisted to have all the operations and network between the brokers and the stock exchange automated. In the beginning, we allowed them to physically come to the stock exchange because the automation was something new. When we dematerialised all the certificates in the depository, people rejecting to give the certificates and would like to keep them. This kind of mentality, but after a while, they understand that they do not need to be afraid and we succeed in the demutualization process in 2009. We insisted as a stock exchange to build our network also outside Bagdad. Some people are still coming to the stock exchange, some of them already used to do operations through the brokerage firms.

Our plans for 2020, before the pandemic, were different. We asked the companies to prepare the response to the RFP on a topic of online trading solution for investors (DMA system). We had two proposals, one from an Iraqi company and one from Jordanian
company to provide a system and to train them and do all the actions with the settlement with the banks. So, we started discussions with those two companies, but since March we stopped the operations and, honestly, we put into our mind that we are moving forward encouraging investors to change the procedure of not coming to the stock exchange.
The Board of the Governors said: “Let’s see what is going to happen next”.
Many listed companies are closed until now. Only banks (there are 40 bank-issuers at ISX) are working and operating. 60 companies are still closed. They need to do safety instructions and all the protocols for coming to work, as there is a need to
protect employees and the community.

ASo half of your issuers are closed now. This can have consequences on trading volumes. How do you evaluate the trading volumes after these two closures?

T – I am happy to say we didn’t face the decline too much. When we got back to work in May there was a 3% decrease in the first week. For the second week we had a 4% decrease, but after that and now the prices are back with some companies’ ups and
downs. The banking sector is doing better and making good profits during the recent three months.
So, the pandemic helps some companies.

AWe can say there is a healthy financial sector which is always good for the economy. Let’s come back to the stock exchange, how do your employees feel working from home? Are they comfortable with this? How do you, as a CEO, find this? Is this a good exercise? How do you think about “work from home”?

T – In fact, not all employees have a good efficiency of working from home. I have good managers. Seven very qualified managers at ISX work directly with me and they can run the systems from home and also run many functions of their job from home. As not all the employees are managing work from home that efficient, I asked them to be involved in training, also asked managers to help their staff with materials, guidance.

The process will take time. This is something surprising, it needs time to make all work smoothly.
I was following some investors’ discussions on Facebook and social media, there were many questions about why we were closed for such a long time. It worth to mention that the closure of stock exchange was coming from the banking sector, as they were not
operating distantly and we were not able to have money settlement done. The community was actively comparing different stock exchanges and these discussions with the community encouraged us to think about how we can develop the procedures by using technology which will allow you not to come to the office and run a business remotely.

AI can see all activity of ISX on social media. You are very active and I like following ISX. As a stock exchange, you are dealing very well with financial literacy keeping active with the investors and community, running several webinars. Will you please point what are you as a stock exchange doing for increasing financial literacy in the country? I know you are doing a lot of things.

T – It was helpful when I was teaching at Baghdad University some years back. That time I was sharing the information with my students about stock exchange, financial institutions. So there was a connection between the stock exchange and the university. Every year we were having 500-600 students visits to our stock exchange. When the crisis happened we discovered that many technologies allow us to reach the community. We started discussions with universities and colleges for distant seminars.
We had quick success with that and starting from March. In April we had already the second webinar and started the dialogue with students with journalists. A lot of questions like “What is the meaning of stock exchange?”, “How can I bring my money?”.
Very basic questions. Finally, they realized that there is no need to bring the money, but to run the money, to manage it to have benefited from the stock exchange. So we kept the relationship with the community.

A – Which is good! And the last question: what is your personal feeling, when the pandemic will over and when we will be back to the normal, new normal but at least normal stage and what are the plans of the Iraq Stock Exchange after all this is finished?

T – This is a great question, by the way. It means what we have now and what we are going to have in the future? In fact, the big crisis and the big challenge is now. It is facing the pandemic, keeping your work running, keeping investors and investments running, not stopping anything. I am against stopping everything. Because many people have their jobs, benefits, families, they must run their business. I am not telling them to go out of homes. No, but they need to have an ability to change the way of living, which means they do not need to go and trade from the same trading floor with many people around. All must understand how to run their business from home, from personal offices, from anywhere without touching or being with the other person in the same room.
So, this is a big economic challenge, health challenge, financial and capital market challenge. These three challenges we are facing now, we must face it. We must live with it without losing anything. At least we must run 50% of what we were running before and get prepare to continue the next stage what will come after the pandemic. Not all will be back exactly the way there were. People, the community will be suspicious about everything, there will be another mentality and another lifestyle.
I believe the community relationship will not be changed, the merchant relationship will not be changed. Financial instruments and the capital market will be changed for the better by using everything remotely. Not in the capital market alone, but in all activities: travel, meetings, document flow, all will be easier, faster and safer. In the short run, we will have almost everything remote, but after the pandemic is managed, all will be back to normal, while in business there will be more efficiency in using networks, it will be easier. The only thing, that will be more difficult for those without education. So, we must educate the community at least to understand what is going on in the World.

A – Thank you, Mr Taha. Thanks for your thoughts and information. I hope to see you soon not only online but onsite.

T – Thank you for this interview! I am encouraged to face developments. I even encourage my kids to be prepared and think about the future.