Over recent months the FDI in Iraq has jumped 241% to $156.7 Billion.

The foreign Investment in Iraq from around the world has been as follows:

2009

UAE: $37.6 bn

S.Korea: $24.7 bn

USA: $22 bn

UK: $10.5 bn

Lebanon: $10.1 bn

The biggest jump has been made by oil and gas.  Since 2003 it was real estate.  But since their 1st and 2nd oil licencing rounds have made a dramatic increase in the countries revenue and investment.

Energy investment into the country has been $73 billion so far this year.  You may remember i previously wrote about a company called Gulf Keystone (GKP) which has established itself in northern iraq back in 2007 and is taken advantage of Iraqs energy supply.  Last week it was annouced that it found oil, which is predicted to be between 12 and 15 billion barrells of Oil.  The shares have increased dramatically the past several months from lows of 0.03p earlier this year to a year high of £1.24.  Currently trading today at around £1.12

A recent interview on CNN with exectuive chairmen Todd Kozel was quoted in saying “In Kurdistan we have discovered about 25 million barrells of oil a day for a $30million dollar well, our 2 current projects combined in Algera are $70 million barrels to our interest”

They will need $120 million cash injection to help fund their ongoing project.  Todd Kozel has said “we are pretty much the most popular guys right now, we have all the attention we need right now, our institutional share holders are very supportive and thats where we will probably where we will go to raise that capital”

In 6 months time Todd reckons “initially Gulf Keystone will be an independent company but later down the line it will be more difficult to keep up with it financially HR, Technology, Engineering.  Weve got hold of something that is as big as Gulf Keystone right now but we are growing into it quickly”

The pound has recently enjoyed a rally for the past few months from its lows. Recently it gained 24% against the $US dollar, 20% against Swiss franc, and 16.7% againsts the Euro. Traders are wondering whether a sharp fall is nearby as this rally can’t last much longer with the pattern that is forming.

British shares are mainly invested in by oversea investors. When risk appetite rises they have to buy pounds in order to invest in more UK shares. When risk appetite wanes, sterling currency gets hit as oversea investors start to sell british assets and repatriate the proceeds in other countries.

Compared to the US market the UK stock market is cheap compared by historic trends. But the UK market is still a vulnerable market to be in as there still could be further falls to come. The recession is far from over and the credit crunch seems a long way of from a full recovery. Once the banks start lending again this is when we will start to see the green shoots and the start of a recovery, until then its a slow ride downwards. The banks are still short of capital so they are still very cautious about lending.

In previous anxious times the Swiss Franc and the Yen have been a safe investment for currency investors. But at the moment both are already very high levels against sterling. Also the government in both countries are keen to prevent their currency from gaining too much strength.

The Daily Telegraph have rated BAE Systems a buy.  BAE are Europes largest defence group, developing electronics and avionics for war planes, manufactures ammunition and builds submarines and tanks for the armed forces.

BAE has missed out on the “dash to trash” and its shares now hang at their three year lows.  This is now making this stock a great entry point for investors.  The reason why now is a good time to enter this stock is because last month they reported they had won over £1bn of new contracts relating to the Typhoon and Harrier fighter jet programmes.  Their order book is £46.5bn so this will add to their most substantial order book.

BAE also has cutting edge technology that will enable them to take advantage of the shift towards covert combat tactics against any terrorists or rogue states.

In 2008 they generated £1.6bn in operating cash flows on a turnover of £18.5bn.  They ended the year with positive net funds, providing plently of money to buy up acquisitions.  The stock looks cheap for a company that is a major top player in the science field.  Top analysts are forecasting 2009 sales and underlying EPS (earnings per share) of £20.5bn and 24.3p, rising to £21.8bn and 45.0p in 2010.

Recommedation: BUY @ 323P