Driven by structure, not growth: Jordan, Tunisia, and Iraq post big equity gains

Jordan, Tunisia, and Iraq have each spent the past 18 months producing equity returns that far outstrip their economies. In all three markets, the explanation sits in market structure, rather than growth figures.

By the numbers: Jordan’s ASE General Index gained 45.1% in 2025 and another 9.7% in 2026 through 9 August. Tunisia’s Tunindex rose 35.1% last year and a further 49% this year. The picture in Iraq depends on which index you read: The official ISX60 fell 8.4% in 2025, while Rabee Securities’ RSISX — the benchmark most foreign funds actually track — rose 13.7%. The ISX60, itself, is up 5.9% in 2026 through early August.

Set those returns against the economies, and you get a bit of a head-scratcher: Jordan’s real GDP grew 2.9% y-o-y in 1Q 2026, while Tunisia’s grew 2.5% in 2025 and 2.6% y-o-y in 1Q 2026. Neither country has posted “bad” growth numbers, but neither country has the kind of growth that lines up with their equity market growth.

What’s actually moving these markets is how few securities there are to move in the first place. In Jordan, two mining companies account for most of last year’s headline gain. In Tunisia, only about a quarter of market cap is freefloat and banks alone make up roughly 45% of the market. In Iraq, half the listed companies don’t trade at all. Concentration is what makes these rallies possible — a modest amount of money meets a very small supply of stock — and it is also what makes the markets hard to enter at size and harder to exit.

Scale compounds that: The Amman Stock Exchange’s market cap stood around JOD 26.5 bn (USD 37.4 bn) at the end of 2025, and Iraq’s was roughly at IQD 23.7 tn (USD 18 bn) at the end of 2025, according to the Iraqi Securities Commission. Tunisia’s exchange, meanwhile, closed last year with TND 34.7 bn (USD 12 bn) in market cap — small enough that a single fund’s allocation decision is a market event. For investors looking to diversify their regional equity exposure beyond the most heavily covered exchanges, the question in each of these three has less to do with the underlying economy, and more about whether the structure that produced the market rally can keep producing it — and what it costs you in liquidity to find out.

Jordan: A two-stock pony

Mining and extraction stocks on the ASE jumped 77.3% last year, led by Jordan Phosphate Mines and Arab Potash. “[These] two companies explain most of the headline number,” says Junaid Ansari, director and head of investment strategy and research at Kamco Invest. “Excluding these two stocks, the growth would still be strong but at a slightly smaller gain of around 30%,” he says.

That 30% is the real number to work with, and it’s still an order of magnitude above the economy underneath it. What Jordan’s rally has tracked is corporate earnings and commodity exposure in a handful of names, not a broad domestic expansion.

And the rally is funded locally: “Jordanian investors continued to account for the bulk of the trading on the exchange at over 80% while non-Jordanian investors remained net sellers on the exchange,” Ansari says.

Tunisia: More liquidity than stock

Tunisia’s listed companies’ earnings grew last year. The Bourse de Tunis put the aggregate net income for 65 of its 75 listed companies that had reported 2025 at TND 3.2 bn (USD 1.1 bn), rising 10% y-o-y. Ansari describes the corporate sector as showing “resilience, with higher profits and revenues,” with the rally led by financial services, retailing, and industrials.

But 7.2% earnings growth doesn’t directly translate into a +35% year on the stock exchange, or the 45.6% YTD rise the Tunindex has logged.

Tunisia’s market structure explains the gap better than earnings do. Freefloat is currently just about a quarter of total market capitalization, and banks alone account for roughly 45% of the market. That means cash with nowhere else to go and not enough stock to absorb it, with savers moving money out of low-paying bank deposits into a market where only a quarter of the shares are actually available to buy.

Iraq: The long-term play with the biggest caveat

Iraq has the biggest structural opportunity of the three, and the least reliable index to read. “Half of the listed companies are not trading,” Aysegul Ozge Ozgur, SVP and head of research at Rabee Securities, tells EnterpriseAM. “Iraq is a very illiquid market, where the index is not well constructed and has stocks that are not frequently traded,” says Ahmed Tabaqchali, chief strategist at AFC Iraq Fund.

That gap — between what trades and what is merely listed — is also what separates Iraq’s two benchmarks. The RSISX tracks a narrow set of around 10 companies, while the ISX60 spans a far broader list, including names whose quoted prices can sit unchanged for want of buyers. The two diverged by more than 20 percentage points in 2025, then converged a bit more this year: The ISX60 is up 5.9% through early August, and the RSISX 8.4% year-to-date.

The stock market also structurally cannot represent Iraq’s actual economy. Banks and telecom dominate the ISX60, and oil — roughly 90% of government revenue — has zero listed companies.

That narrow exposure is also the bull case. What is listed is the domestic, non-oil economy: “Iraq is coming out of decades of conflict,” Tabaqchali says, pointing to a young population, accelerating banking adoption, and a domestic economy still mid-transformation. An investor buying the ISX isn’t buying Iraq’s oil revenues; they’re buying the consumption and financial-services buildout those revenues are meant to fund.

Foreign investors are there, but their presence is shallow. Foreign investors have been net buyers, though that “should not necessarily be interpreted solely as a broad vote of confidence in Iraq,” Ozgur tells us. Instead, it reflects a mix of both confidence and valuation-discount opportunism, Ozgur says. Tabaqchali reads recent inflows as mainly existing foreign investors reinvesting dividends, alongside some incremental subscriptions, rather than a meaningful arrival of new institutional capital. Back in 2023, the Iraqi Securities Commission said that around 10 foreign investment portfolios were investing in Iraq, but it did not publicly name them.

Is there still money to be made?

Structure-driven rallies eventually need structure to change — more float, more listings, more institutional participation — or earnings to catch up to prices.

Watch the supply side: Tunisia’s rally is a function of scarce float meeting redirected deposits, so new listings or a shift back into higher-yielding deposits would work against it in a way that corporate earnings can’t offset. Jordan’s next leg depends on whether gains broaden beyond mining and extraction, or whether phosphate and potash prices keep doing the work. In Iraq, “we would not necessarily wait for a single specific catalyst, but would look for continued improvement in trading liquidity, greater participation from institutional investors, and further progress on economic and banking-sector reforms,” Ozgure says.

Where the pros are positioned: Tabaqchali’s fund is “fully invested” in Iraq, on a long horizon — the “easy money has been made. But we are coming out of a hole, and the long-term gains are yet to unfold,” he tells us. Ozgur remains “cautiously positive,” warning that “though the long-term growth potential offers upside, near-term performance is likely to remain sensitive to political developments, oil prices, and liquidity conditions.”