SEO Planning to Internationalize Stock Market

EghtesadOnline: Officials with Iran’s capital market are looking at the possibility of bringing more foreign investors, the advisor on international affairs at the Securities and Exchange Organization said.

News ID: ۷۸۵۲۶۳

15 January 2020

Bahador Bijani added that the SEO has plans to extend the international frontiers of the capital market and help boost interaction with foreign investors, Financial Tribune reported.

“The main objective is to build links with overseas capital market investors,” IRNA quoted him as saying.

Attracting foreign investors is part of the process of internationalizing Iran’s bourse, Bijani said, noting that the capital market authorities have approved regulations for attracting foreign investments.

Last month, the CEO of Tehran Stock Exchange, Ali Sahraee, referred to the US banking sanctions and restrictions on money transfer as the main obstacle to attracting foreign investors to the stock market.

Foreign traders hardly represent 0.01% of the Iran’s capital market investors. The number of trading codes issued for foreign legal and natural entity investors was  1,366, out of a total of 11 million trading codes, according to the Central Securities Depository of Iran.

Long Range Prospects

Bijani said foreign investors coming to Iran’s stock market look at long-term prospects. He referred to the example of last week’s market trend, when the stock market took a drubbing unseen in a long time, saying that the financial approach of foreign investors “was not affected” by the political tensions.

“We closely watched the market and saw that there were domestic investors who moved their assets out of the market and suffered,” he said.

Apart from efforts to attract foreign investors, there are plans to launch an international stock market before the current fiscal year is out in March 2020.

The CEO of Kish Free Zone, Gholam Hossein Mozaffari, said earlier grounds exist for opening the first international stock exchange in the free trade zones.

The new exchange will be based in Kish Island (a free trade zone) off the Persian Gulf and will be Iran’s fifth exchange after the TSE, Iran Fara Bourse (over-the-counter market), Energy Exchange and Iran Mercantile Exchange.

The international bourse will have the ability and capacity to attract non-rial financial resources in the framework of rules of the Securities and Exchange Organization.

Apparently both domestic and foreign investors will be present in the new market.

However, the feasibility of such an enterprise is under question, given the tough US restrictions on Iran’s banking and other key sectors.