Video: Tabaqchali on Iraqi Markets, AI, and Cryptocurrency

In a new video from AI4Iraq, Ahmed Tabaqchalli, Chief Strategist at AFC Iraq Fund, discusses the progress of capital markets in Iraq, the impact of artificial intelligence and the future of crypto currency.

AI4Iraq is a non-profit organisation with roots in Iraq, Lebanon and Hong Kong. According to its website:

“We are a group of secondary school students of Iraqi background excited to be part of the roll-out of next generation technology for the betterment of Iraqi society. Our targets are in-line with the UN 17 Sustainable Development Goals (SDGs) by 2030.”

Key points from the interview:

  1. Iraq Stock Market Context
    • Iraq is considered a “frontier market of a frontier market” due to its history of conflicts
    • The market has recently reached new highs but has only returned to 2014 levels, while other markets have grown much further
    • Current stability (relative to Iraq’s history) is enabling business growth and development
  1. Market Development and Investment Climate
    • Baghdad is experiencing significant development and improved safety compared to 5 years ago
    • The country is seeing a business boom driven by:
      • Relative political stability
      • Strong oil prices in 2022 providing government spending power
      • Banking system improvements
      • Growing private sector development
  1. Market Challenges
    • Technical challenges:
      • Lack of market makers and proper bid/offer structure
      • Predominantly retail investors rather than institutional investors
      • Limited market liquidity
      • Underdeveloped market architecture
  1. Regulatory Environment
    • Mix of socialist, market-driven, and new regulations
    • Contradictory rules and old structures still in place
    • Regulatory framework is evolving but typically lags behind market developments
    • Moving in the right direction, albeit slowly
  1. Institutional Investment
    • Initial interest from institutional investors during 2009-2012
    • Interest declined after ISIS (Dash) emerged
    • Future institutional investment depends on:
      • Improved market performance
      • Changed international perception of Iraq
      • Better market access and clarity
  1. Technology and AI Impact
    • AI seen as a valuable tool but not immediately applicable for trading in Iraq due to:
      • Insufficient market liquidity
      • Lack of interconnected markets
      • Absence of developed derivatives and currency markets
    • More immediate AI applications in:
      • Compliance monitoring
      • Pattern recognition
      • Risk management
  1. Financial Innovation
    • Limited potential for cryptocurrency adoption due to:
      • Need for monetary stability
      • Central bank requirements
      • Volatility concerns
      • Reserve currency considerations
  1. Investment Advice
    • Emphasis on thorough research and due diligence
    • Understanding risk-reward ratios
    • Long-term perspective needed for frontier market investing
    • Importance of patience in dealing with market development

Click here to view the full interview.

(Source: AI4Iraq)