International Accounting Standards & the ISX

[jonas]

I am currently wondering if anyone out there has any information as to what will take place with stocks after Iraq has revalued the countries assets under the International Account Standards from the old accounting system that it is currently using right now. Now, from my understanding this has nothing to do with revaluing the currency, so please do not address with the idea that there has to be a high dinar rate, because there need not be. Again this has nothing to do with revaluing the currency, but in country accounting. What I do understand is that the value of shares will go up instantly, because they will be priced on the international price scale. The issue that I have is what will they do with the trillions of bank shares that out weight the rest of the market. I am under the assumption that someway somehow it will become a problem in the future if bank prices go down. I know they were talking about letting some companies remove zeros off their shares based on how much capital they had. Now that it has become more clear that Iraq will float the currency and not loop. There MAY also be no need to remove the zeros from the shares as well, but can the market handle so many shares in one sector in the long run. I don't think so, unless more companies are added to balance and neutralized the negative effect a down slide of bank prices would have on the market. I, for one, would like there to be no looping of the shares, and if so, maybe remove one or two zeros at worst.

I understand that since we are dealing with company shares, and not currency, the company has options when the monetary policy changes.

I would like to hear from those that have a good understanding as to how the banks can deal with this issue without reducing their shares by 3 zeros, or any links that have address this issue before.

[millionairetobe71]

That has been a question that I have asked myself and tried to use other countries economic experiences as a base to understand what would happen if the scenario that you describe takes place.

The problem is this....Anything can happen in Iraq and is so unpredictable that attempting to paint one scenario or the other, may prove to be futile.

I guess, once we know exactly what direction the currency will take, then we can most certainly speculate what could happen with the shares.

I am intrigued, as I have several millions shares vested in the ISX.

Any insight, anyone ??

MTB71

[Will-it-happen?]

The way things are going , it would appear the iraqi gov are simply going to float the iqd on the free isx markets, as for the trillions of shares on the isx , we may see concolidations ie 10 for 1

[jonas]

After during some further research, I found out that part of the IMF loan agreement is that Iraq promises to adapt the International Accounting Standards (IAS). I learned that the IMF has tried many times in the past to no avail. I think this time it will be different. Also, the new Nasdaq system only works with the IAS, and is probably the reason for the hold up. There is an ISX meeting going on soon, and hopefully they solve the remaining issues that we are all concerned about.

[RogueTurtle]

Thanks for the research Jonas.

As MTB71 says anything can happen there. I wonder if new stock classes (such as a Warka Class B as an example) would be introduced with options for current holders to transition to, similar to WIH mentions above.

What I am looking for is a Major Bank to step forward and act as the clearinghouse bank so international trading can be started. I see Audi Bank and Citibank are once again in the Iraqi News. Either one of them could fulfill that role. Those two banks plus the research you are highlighting in this thread appear to be some of the missing pieces we need.

Fingers crossed.