FINEX 2019 Opens

The four-day event, which features developments related to banks and insurance firms, is being attended by businesses, state officials and potential investors interested in the bank, capital market and insurance sectors.  

Touted as the biggest financial event in the region, it brings together investors, shareholders, insurers and financial leaders.

It provides a platform for displaying capabilities, achievements, and capacities of the financial industry and sharing ideas in the key area, Financial Tribune reported.

Economy Minister Farhad Dejpasand, SEO chief Shapour Mohammadi, CEO of Iran Insurance Company Gholamreza Soleimani,  Vice President for Science and Technology Sorena Sattari, and the deputy governor of the Central Bank of Iran, Akbar Komijani attended the opening ceremony. 

Mohammadi outlined FINEX goals saying that the event is held annually to help improve financial literacy of capital market investors, promote the culture of investment among people and disseminate developments in fintech and financial startups.

He also spoke about capital market achievements in the previous fiscal that ended on March 20. 

The main index of the Tehran Securities Exchange soared 86% in the previous fiscal and investors contributed 1,270 trillion rials ($9.2 billion) to the TSE progress.  

“During the past five years the TSE has on average has grown 17.5%  and Iran Fara Bourse (the junior stock market) has expanded 19.2% annually,” he said.

On the TSE and IFB yields in the mentioned period, he said the average returns of the two markets in the past five years were 30% and 34% per annum, respectively.  

Mohammadi referred to the reduction in trading costs, revisiting the policies related to opening and freezing symbol tickers, offering crude oil on the Iran Energy Exchange, launching algorithmic completions, reducing settlement period to two days in the bourse, and Iran’s membership in the International Financial Reporting Standards as other accomplishments of the SEO. 

IFRS is a not-for-profit international organization responsible for developing a single set of high-quality global accounting standards. Its mission is to develop standards that promote transparency, accountability and efficiency in financial markets around the world.  

As for the SEO’s plans for development of the capital market in the current year (started March 21), he pointed to the launching of short selling contract, opening the international bourse and improving transparency in capital market trade.  

Head of the Supreme Council of Iran’s Free Trade Zones Morteza Bank said in January that rules and regulations for launching an international bourse are ready and have been sent to economic commission of the government. 

The move is seen as a potential capacity to attract non-rial financial resources within the SEO framework. 

The IIC chief was the next speaker who spoke about the achievements of the insurance industry in the previous fiscal and the outlook of the industry in the current year.

Progress in Insurance Sector

The insurance penetration rate in Iran is 2.3%, he said, adding that premiums increased 29% in the previous fiscal compared to a year earlier to 4,343 trillion rials ($31.4 billion).

Insurance companies paid 270 trillion rials ($1.9 billion) in compensation for insurance claims, up 28% compared to a year before.    

Soleimani pointed to efforts undertaken by the IIC and the Economy Ministry to launch a universal insurance fund for covering the risks of natural disasters. 

Based on the proposed draft, the fund will provide insurance cover of up to 300 million rials ($2,173) for each of the 30 million housing units. Accordingly, the premium for each housing unit will cost 1.2 million rials, half of which is to be paid by the government and the other half by policy holders in monthly installments. 

The idea was floated for the first time by CBI Governor Abdolnasser Hemmati last week who said the fund was proposed in a meeting of the Supreme Council of Economic Coordination -- a body comprising heads of the three branches of government. 

The recent floods in Iran which so far have inflicted over 350 trillion rials ($2.5 billion) losses are apparently the main motive behind the plan.  

Soleimani pointed to the importance of insurance securities given the susceptibility of Iran to natural hazards, adding that the CII will endeavor to help trade the securities in the capital market. 

“The bonds could have been a viable substitute for international insurance companies when they left Iran due to the new US sanctions,” he said.   

“The total value of insurance bonds in 2017 hovered around $13 billion and doubled to $30 billion a year later. This is a robust evidence for the importance of such bonds,” he added.

Delineating the banking developments, Komijani pointed to CBI measures in the previous fiscal to regulate financial and economic variables. 

As one of the key banking achievements, he recalled the decline in lenders’ debts to the CBI, which declined from 1,820 trillion rials ($13.1 billion) last September to 1,660 trillion rials ($12 billion) by mid-February.