Iraq attracts British investors to fund its multibillion re-build

British investors are starting to pour their cash into the Iraq Stock Exchange, as Baghdad looks for the billions it needs to rebuild the country's fragile economy.

Shwan Taha, who once worked for hedge fund billionaire George Soros and now owns Iraq's biggest independent brokerage, Rabee Securities, said that he had seen interest from Britain increase by “more than” three times in 2012.

Mr Taha is looking to attract overseas investment in Asiacell, which is raising $1.3bn (£800m) in the Middle East's biggest flotation for four years. The telecommunications group, which has nearly 10 million subscribers, will represent one-fifth of the value of the entire Baghdad-based Iraq Stock Exchange.

“UK-based funds are looking at Iraq,” said Mr Taha. “When I started going out to the international markets in 2008 I went through my Rolodex for hedge fund friends in New York and London and they would talk to me just because they were interested in why I would look at Iraq.

“Now I'm cold called on a daily basis by international institutions, about one-third of which are from the UK. What Iraq needs is international investment.”

Over the next five years, Mr Taha expects 25 per cent of institutional investment to have originated from UK funds. Iraq needs about $600bn over the next decade to repair the economy, not all of which can be garnered from the country's vast oil reserves.

HSBC and Morgan Stanley were originally supposed to be among those arranging Asiacell's flotation, but Rabee is now the sole adviser working on the deal.