Commodity financialization has been a subject of discussion since the 2008 financial crisis. It is estimated that between 2003 and 2008, index investorsʼ positions increased from $13 billion to $317 billion. Surprisingly, most studies, predominantly based on Granger-causality testing, find no relationship between financialization and commodity prices. We examine the effects of shocks to the common stochastic trends in the index positions, the spot and futures prices of Chicago corn and soybeans, WTI crude oil and Henry Hub natural gas. The results show that financialization has contributed to the price movements of these commodities.

The Iraqi stock market is a young and nascent market that began its operation in June 2004. This paper explains the development of the Iraq stock exchange (ISX). It is shown that some progress was achieved in its development but the market is still very small with less than 100 companies listed. Moreover, the determinants of the Iraqi stock market index are described. It is found that the ISX index is mainly driven by exchange rates, interest rates, the overall security situation as measured by an index for civilian deaths from violence, electricity as a proxy for economic activity, and the price index. Finally, this paper shows that the market still lacks efficiency. While the lack of efficiency is no surprise shortly after the opening of a market, it is noteworthy that the market is still inefficient after the introduction of electronic trading and an increase in liquidity.Keywords: macroeconomic determinants of the stock market index, stock market returns, stock market development, Iraq, market efficiency JEL: G15, E44, O16

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