Former Bourse Chief Makes His Case

EghtesadOnline: Former CEO of the Securities and Exchange Organization (SEO) Hassan Qalibaf-Asl defended his performance on Wednesday.

News ID: ۷۸۵۸۴۷

29 January 2021

Speaking at a valedictory ceremony, Qalibaf-Asl pointed to the liquidity tsunami, jump in the number of stock market investors, increase in market capitalization of the Tehran Stock Exchange (TSE) and the junior exchange Iran Fara Bourse (IFB) plus lifting the ban on trading the so-called Justice Shares as key issues that emerged in a relatively short period.

"Liquidity worth 1,200 trillion rials ($5.2 billion) flowed into the market in five months from beginning of the fiscal year [up until mid-August]," he was quoted as saying by Securities and Exchange News Agency.

TSE and IFB market capitalization shot up 152% since the beginning of the year until mid-December while the TSE's main index, TEDPIX, rose 120% from 512,000 points to 1,150,000 points," he said. However, he did mention the steep volatility in the market since August when share prices crashed after touching 2.1 million points.

Regarding the unusual increase in the number of trading codes, he said “lifting the trade ban on Justice Shares should be blamed for the sharp rise.”

Justice Shares are shares of government-owned companies that were given free to the six lowest income deciles almost 15 years ago. Shareholders were not allowed to sell the shares until recently. They are required by the stock market regulator to get trading codes to sell their shares.

"Prior to this, the total trading codes barely averaged 300,000  annually. With codes issued for holders of Justice Shares the number has reached 57 million.”

To facilitate entry of new investors to the bourse, the regulator eased registration procedures for trading codes and set up online ID verification.

"This year the identity verification process for four million new investors was done electronically," he said.  Qalibaf-Asl was succeeded Tuesday by Mohammad Ali Dehqan-Dehnavi, a former deputy economy minister.