Demand for Iraq’s new bond showed signs of strengthening on Tuesday but concerns about the continuing political turmoil in the country threaten to undermine investor sentiment.

The bond issue, which has a face value of about $2.7bn, made some price gains on Tuesday after failing to attract strong demand in recent weeks. In afternoon trading, the bond was yielding 9.41 per cent, compared with a yield of 9.5 per cent at the end of trading on Monday.