More Companies See Opportunity in Bourse

EghtesadOnline: The CEO of Securities and Exchange Organization says 140 companies are in the listing process to join the Tehran Stock Exchange and Iran Fara Bourse, the junior equity market.

News ID: ۷۵۰۶۲۳

05 August 2020

Hassan Qalibaf-Asl said efforts are underway to ease the listing process. Ninety companies are doing the paperwork to get listed on the IFB while 50 want to be listed with the TSE, IRNA quoted him as saying.

The government has eased the listing process in line with the declared aim to expand the bourse and strengthen the supply side to accommodate the ballooning liquidity flowing into the market.

Huge inflows of capital coupled with rising number of investors has led to consecutive stock rallies in recent months. However, this has given rise to serious concerns among market observers about a possible bubble as share prices keep rising and the likelihood of huge losses on retail investors.

Qalibaf-Asl pointed to tax breaks offered to new companies willing to list as one of the government incentives to encourage companies to list.

Last month, the government said it would grant tax holidays to companies entering the share market in the current fiscal year (March 2020-21).

Accordingly, potential listed companies will be accountable only for tax liabilities in the previous fiscal year (March 2019-20) and Iranian National Tax Administration will not delve into prior unpaid taxes.

This should addresses concerns of companies wanting to enter the flourishing share market but fear their (unpaid) tax background would be exposed.

Qalibaf-Asl expressed the hope that private companies would take the rare opportunity.

By facilitating the listing process, the stock market is expected see one of its busiest initial public offerings in the weeks to come.

There was an average one IPO since the beginning of the year, Qalibaf-Asl recalled, adding that IPOs will be held twice a week henceforth.

Synergy to Ease Listing Process

A memorandum of understanding was signed by private sector representatives and stock market authorities in June to create a ‘single window’ to facilitate the listing process.

As per the MoU, signed by CEOs of TSE, IFB, Iranian Association of Certified Accountants and Iran Chamber of Commerce, Industries, Mines and Agriculture, the SEO will no longer be involved in the listing process and the task is relegated to the TSE and IFB, a move that should curb the bloated bureaucracy and cut red tape.

In addition, the ICCIMA is tasked with assessing the financial eligibility of companies under its supervision through the so-called single window and expedite their listing process.

ICCIMA is in charge of designing and implementing the single window to address issues pertaining to listing process of private companies.

Hossein Selahvarzi, the ICCIMA vice president said Tuesday that 238 private sector companies have so far registered and 99 companies have presented their financial statements.

Selahvarzi, also a member of High Council of Securities and Exchange, said the plans are underway to list 50 private firms by the time the current fiscal year is out next March.