Weekly interest and loan rates | Home values Northwest stock contest 2004 | Consumer affairs

Her war-zone mission: revive Iraq stock exchange

By Todd Mason
Knight Ridder Newspapers

	MICHAEL S. WIRTZ / KNIGHT RIDDER NEWSPAPERS Ann Exline Starr, at home in Hockessin, Del., is trying to restart Iraq's stock market, whose location is secret because of security concerns. While acknowledging that the Iraq assignment is challenging, she said, "I'm not petrified by it."
	E-mail this article Print this article Search archive

When it reopens depends on the Iraqi Governing Council, which must enact laws authorizing it, said Exline Starr, a former deputy chief enforcement officer for the Philadelphia Stock Exchange.

Where it is located is a secret for security reasons, she said.

How it will work consumes 18-hour days for the Hockessin, Del., resident. She arrived in Iraq on Feb. 13 on temporary duty for the Defense Department's Coalition Provisional Authority and is scheduled to stay for six months.

She joined Jay Hallen, 24, a Yale graduate who has been working since September to restart the exchange, which closed in the early days of the war last year.

Exline Starr, a lawyer, is trying to usher in Western-style disclosure rules and trading restrictions designed to limit the advantage held by exchange and corporate insiders.

Before the war, 51 brokers made markets in about 130 publicly traded Iraqi companies, many of which had close ties to the government of Saddam Hussein. The Palestine Hotel, home base for the media in Baghdad, was formerly a public company, as was Modern Paint Industries and the Babylon Bank.

"There was very strong government control and cronyism rampant in all parts of the economy," said Salvatore Pappalardo, a managing director of the Financial Services Volunteer Corps.

Exline Starr is well-traveled, said Meyer "Sandy" Frucher, chairman of the Philadelphia exchange. "She's worked in Australia and the United States. I wish her well."

She has her work cut out for her, said Reena Aggarwal, a Georgetown University professor and a specialist in international stock exchanges.

"It's not that difficult putting in a state-of-the-art infrastructure and the right rules," she said. "But that doesn't mean that investors will come.
 
"We have seen exchanges in Eastern Europe putting in the best practices and not having activity" from traders, Aggarwal said.

Different countries have had varying degrees of success in establishing stock exchanges, said Pappalardo, who has worked on many. While some have lagged, "The trend is in the right direction," he said.

Exline Starr traveled to Jordan as a volunteer for the Financial Services Volunteer Corps in November to meet Iraqi brokers and discuss proposals for a new Iraqi exchange. The brokers invited her to visit Iraq in December, driving there in a tense journey from Jordan to the heavily fortified Green Zone in central Baghdad that serves as base for the coalition.

Iraqi brokers are pushing hard to get the exchange open. Exline Starr said she could not predict when trading would resume. "People want their livelihood back," she said. "I completely understand that. They just don't understand what a huge job it is."

The Kuwait Stock Exchange reopened two years after the Iraqi invasion in 1990.

There are attractive Iraqi stocks, said Raad Ommar, chief executive officer of the Iraqi-American Chamber of Commerce.

"Several five-star hotels are tradable companies and would be a very good investment," Ommar said. He said 30 or 40 stocks would be viable investments.

Ommar said security concerns delayed the reopening. "They keep looking for a better place," he said.

Exline Starr said the Iraqi brokers "have been delightful. They have volunteered their time to ensure that my colleague, Jay Hallen, and I understand the cultural and operational issues."

Exline Starr has experience in cultural translations. From 1997 through 2000, she participated in a restructuring of Australia's financial-services industry.

By the end of her tour, Exline Starr was the national compliance manager for the Australian Securities and Investment Commission, responsible for enforcing the changes.

Returning to the United States, Exline Starr worked three years at the Philadelphia exchange in a similar role before becoming a consultant.

She said the Philadelphia exchange and Buycastings.com donated a replica of the Liberty Bell as a gift to the Iraqis. She hopes traders will ring it to open trading sessions.

Exline Starr acknowledged the Iraq posting is challenging. She said she stopped at Fort Belvoir, Va., on her way to Iraq to be fitted for a flak vest armored with ceramic plates.

"I'm not petrified by it," she said. "I think it's an incredible opportunity to participate in nation building."

Copyright © 2004 The Seattle Times Company