Iraq's new bonds started official trading yesterday at prices below earlier indications but amid forecasts that future demand couldbe underpinned by investor demand for higher-yielding emerging market investments.

The bond issue, which has a face value of about $2.7bn, accounts for about $14bn of commercial debt dating from the Saddam Hussein era. The bond has had strong gains in trading in the so-called grey market on an "if, as and when issued basis".