Eshqi communicated his concern in a letter to Industry Minister Reza Fatemi-Amin urging him to reconsider to minimize its detrimental impact on shareholders, the Securities and Exchange News Agency reported.
“Given that most listed companies are subject to the new export duties, it is obvious that it would have a significant negative impact on stock market trade in the short and mid-term,” Eshqi warned in the letter published by SENA.
The Industry Ministry on Saturday announced higher tariffs for key exports, namely iron ore, steel, base metal, copper, aluminum, petrochemicals and cement.
The ministry said the new duties are based on export prices, arguing that the higher tariffs are to help ensure supply of raw material for domestic industries at “competitive prices”.
Eshqi asked the minister to reconsider the basis for calculating the tariffs from late January to late March, arguing that most investments in the market were made in the latter period in the hope of higher returns given the rise in international commodity prices.
According to analysis published by Bourse24.ir, in some cases the new tariffs are 17% of the price of steel products, which run the risk of big losses for steel companies and their shareholders.
This is not the first time an unexpected decision by a government body or Majlis impacts share trade.
In December, the parliament decided to raise feedstock prices for petrochemical companies, spurring a bout of volatility in the already struggling bourse. Such uniformed decisions undermine the profit of companies and subsequently impact price of their products.
Controversial moves by the government has often worked to the detriment of the share market. Last year, the Industry Ministry announced regulations based on which steelmakers were obliged to sell their products only via the Iran Mercantile Exchange and 25% below global prices.