Tehran Share Market Offers an Opportunity to Foreign Investors

EghtesadOnline: The remarkable performance of Iran’s share market in recent months can attract foreign investors, the deputy foreign minister for economic affairs said.

News ID: ۷۵۰۱۵۹

06 June 2020

In a review of the Foreign Ministry’s moves to help attract foreign investment, Gholamreza Ansari said the robust stock market is attractive enough for foreign investors and Iranian expats.

“Growth of the bourse in recent months will encourage foreign investors, especially Iranian expatriates,” he was quoted as saying by the IRIB News Agency.

Pointing to the obstacles to foreign investment in the stock market, Ansari referred to problems associated with money transfers due to the US sanctions, saying that ways to overcome them are being discussed with the Economy Ministry.

“The ministry is trying to find ways to assist and enable Iranians living overseas invest in the stock market”.

Data by the Central Securities Depository of Iran show that foreigners hardly represent 0.01% of Iran’s capital market investors. The number of trading codes issued for foreign legal and natural entities is 1,366, out of the total 11.5 million codes in the last fiscal year (March 2019-20).

Iran’s share market has shown unprecedented growth thanks to substantial increase in the number investors and the pattern of liquidity injected into the market in recent months.

The main index of Tehran Stock Exchange grew more than 200% in the last calendar year. The benchmark’s consecutive rallies have continued in current year putting the benchmark growth at 100% in two and a half months -- from around 500,000 points on March 19 to 1,028,537 points last Tuesday.

Despite the major hurdles to foreign investment, Iranian economic officials have often announced their desire for foreign investment to help lift the economy.

SEO Mission

Soon after his appointment as head of the Securities and Exchange Organization in April, Hassan Qalibaf-Asl said promoting the bourse on the international money market is among his mission. “Iran’s stock market has the capacity and capability to attract foreign investment”.

He spoke of plans to broaden the international scope of the capital market and boost interaction with foreign investors.

Pointing to the US restrictions on money transfer as the main hurdle ahead to expanding the capital market overseas, Qalibaf-Asl said “We should be prepared to attract foreign investment and collaborate with other entities to ease restrictions arising from the sanctions”.

Apart from efforts to attract foreign investors, stock market officials have also floated the idea of launching an international stock market in the domestic free trade zones.

According to media reports, the economic commission of the government is reviewing rules to this effect.

The CEO of Kish Free Zone, Gholam Hossein Mozaffari, earlier said the groundwork exists for opening the first international stock exchange in the Kish Free Zone off the Persian Gulf.

The international bourse would reportedly have the ability to attract non-rial financial resources in the framework of SEO rules.