Zain Iraq to launch IPO before June

Zain Iraq will float its shares on the Iraqi Stock Exchange (ISX) by June, it has been reported.

The announcement follows Asiacell’s successful trading debut after an IPO worth $1.3 billion last month, the biggest in the Middle East since 2008.

Zain Iraq’s Chief Financial Officer Wael Ghanayem expected demand for the company’s shares to be high, he revealed in an interview with the Washington Post yesterday.

One of three mobile phone companies in Iraq, the firm is required to list 25% of its shares on the ISX under a 2007 licensing agreement. Korek Telecom will also need to comply with this arrangement.

Mena FM recently spoke to fund managers who predicted that the follow-on from Asiacell’s IPO could represent a big boost to Iraq’s economy.

They were positive that the telecoms sector would play a key role in upcoming Iraqi investments, particularly as the sector is seen as one of the fastest growing markets in the world.

Invest AD portfolio manager Sherif Salem saw Asiacell’s IPO as a catalyst “which would immediately add depth and liquidity to the Iraqi stock market.”

He added that telecoms companies presented a clear opportunity for revenue and subsidy growth, although Iraq’s banks dominate the market.

Michael Daoud, vice president MENA sales broker at Auerbach Grayson, said Iraq’s private sector domestic credit as a percentage of GDP (9% according the World Bank) showed prospects for growth.

Ghanayem was equally optimistic about the investment possibilities presented by telecommunications and said that the company planned to invest 15% of its 2013 revenues on modernization.

“Starting a 3G service will open new growth horizons in the telecommunications industry,” he added.

A unit of Kuwait’s Mobile Telecommunications Co., Zain Iraq has a 13.7 million-strong subscription representing a 50% share of the market.

Advisors to the offering will include Citigroup Inc., National Bank of Kuwait and BNP Paribas SA.