TEHRAN (Iran News) In a meeting held on Saturday in Tehran, attended by major market issuers, board members of the Securities and Exchange Organization, and CEOs of the Tehran Stock Exchange and the Over-the-Counter Market, Seydi expressed condolences for the mourning period of Muharram and paid tribute to martyrs, including commanders, scholars, innocent citizens, and market colleagues. He prayed that the martyrs be united with Imam Hussain (AS) and that the nation continue their path.

Seydi addressed the recent closure of the stock market for several days, noting that the organization has predefined emergency protocols, but deciding whether to open or close the market was highly challenging. “Our primary concern was to preserve market liquidity and prevent a sharp decline in asset values. Ultimately, given the emergency circumstances, a decision was made to suspend trading,” he explained.

Regarding the process of reopening the stock exchange, Seydi outlined that, a letter was sent to the Minister of Economy detailing three scenarios. The first scenario proposed reopening the market under the pre-closure conditions, with certain support measures such as protecting the market, preventing legal entities from selling stocks, and securing credit lines from stabilization and development funds. The second scenario involved reopening with trading of gold funds in the first week and stocks in the following week. The third scenario considered keeping the market closed if the first two conditions were not met.

Seydi added that the letter was also circulated among members of the High Council of the Stock Exchange, and ultimately, everyone supported the first scenario. While some indicators for declaring an emergency had not yet been fully realized and a formal ceasefire had not been announced, certain signs—such as banks returning to normal operations, resumption of flights in eastern regions, and the lifting of remote work—indicated a relative easing of the crisis. Based on this, the decision was made for the market to reopen from today.

He emphasized that negotiations had taken place to support the market, and significant measures were promised. While the index and returns remain important, the current focus must be on market liquidity. “We must prevent stocks or subsidiaries from being placed on sale queues. Even if a stock constitutes a small part of your portfolio, it must be protected,” he said.

He underlined that decisions in the capital market are reactive to circumstances and that the behavior of legal entities and managers is closely monitored. “The performance today shapes the future of the market. Investor trust depends on how we respond to crises,” Seydi noted.

He further stated that if necessary, financial resources should be allocated to support certain stocks. “This is not just about support but also about playing a responsible and professional role in the market,” he added.

Seydi concluded that maintaining investor confidence is the key to the stock market’s success in the coming weeks. If shareholders see that managers act appropriately, they will support the market. “All of us must strive to have a balanced, liquid, and trustworthy market because the vitality of the capital market benefits everyone,” he said.

He also highlighted the importance of gradually lifting restrictions on legal shareholdings and stressed that measures to support the market should be implemented carefully. “Support must be phased, and we need to work towards a market that is stable and liquid,” Saidi emphasized.

The post Seydi: We Must Have a Balanced, Liquid, and Trustworthy Market appeared first on Iran News Daily.

The debate heated up and both respected intellectuals debated on the topic of base of prices and the way of government’s manipulation in influencing the idea of free market in the economy but the debate was more an argument than a debate because both sides considered each other pre-convicted of insulating their opinions on the structure of economic decision-makers of the government and therefor a hugger mugger picture from the economy has been painted.

In fact, both sides with their own languages (bringing it but not mentioning it) were painting this picture that Iran’s economy has no clear definition of any economic school. Toghyani was accusing the other side of being a Marxist and in return Jebraeeli was accusing Toghyani of being a pro-liberalism capitalist. Of course both sides did not spare anything to undermine the talks and doctrine of the other side.

I believe these two ways of view regarding the debate topic from the rough-and-tumble economic team of the government in the issue of economy, which has been actually comprised of a political team than an economic-wise, leads to this that all definitions in Iran’s economic bed have more political goals than economic ones. In other words, few officials are found to lay a stable rail for persistent economic decisions.

During the all past 45 years, most of decisions made in the field of economy in Iran has had political flavor. The Islamic Republic of Iran in its foreign policy whether right or wrong has followed a certain and defined policy and coincidentally in establishing the anti-West culture has achieved massive successes both for Asia and the region but in taking economic decisions in fact it has acted like a storm-hit downwind boat in the money sea and has gone ahead till now and the reason why it has not collapsed yet is reliance on injection of petro-dollars.

If I were to express a bold opinion, I could claim that this bewilderment and confusion has cost a great deal for the country. The proof for this issue that can be mentioned is some $2,000b of oil and non-oil sales have not even led to completion of 30% of the infrastructures. I put growth in military and nuclear structure and to some extent growth in scientific, industrial and agriculture structures in the mentioned 30%. Despite it, this 30% growth has helped to maintain the hegemony of the revolution in Iran and to some extent in the region and I claim if we moved in the direction of a defined economy, at least we would not have had the current domestic problems and both sanctions and media hostilities could have less destructive efforts on the trend of materializing the goals of our Islamic Revolution.

On this issue, I do not have any intention to analyze the past wrong actions. I see the mentality of the 13th government in supporting production and approach to privatization different from the past governments but it does not mean that I do not see the problems in decision making of the government in orienting the economy.

The previous governments had raised many problem statements in front of Iranian nation without any solutions for them and I should say God willing the plague of their presence has been eradicated and today the government, Majlis and Judiciary are preparing some intermittent solutions for some of these issues and have turned into crisis managers.

Economy also like foreign policy should find a single voice to move in a clear and bright direction. The views of Marxism and socialism are also unable to save the economy and it costs heavy because it leaves fundamental distortions on the axes of creating obstruction. Essentially I should tell that Marxists divide the world into two groups and say the first group is exploiter and the second one is the exploited and therefore history in all of the past periods has been nothing but class struggle between the exploiters and exploited people, it means, economic interests of some people necessitates to remain in the same stage and are opposed to the progress of production tools (ruling exploiter group) and one group wants growth and progress of production tools and getting rid of the current condition  (the exploited group) and this leads to repeated conflicts and struggles which leads to a new system (new society) where beside production tools, economic, culture, traditions and religious interests and thought, in one word, change comparing to the previous society; and after a while, again this new system changes its path after fight, war and bloodshed which it itself has been the main factor behind it and it converts into a new system in the form and not in the content.

Regressive and reactionary trend of these transformations are very obvious in the underdeveloped countries comparing to the developed ones. The economy which is fatherly run is a consumerist one and consumption economy has no tendency towards innovation and creativity in developing production tools. With this definition, one can unequivocally say that Marxism is not an economic school and emitted socialism from it leads to a fatherly view to the consumption economy, and modernism in this thought is the least.

Today most of Marxist socialists believe socialism has failed and believe Marxism is a social doctrine, a worldview, an ideology, a philosophical school which was found in the late 19th Century by Carl Marx, the German philosopher, economist, historian, sociologist and political theorist.

Base of Marxism as it has been mentioned in the Communism manifest has been laid on history of societies and history of class struggle and in today’s world there exists two classes of Proletariat and Bourgeoisie which are in clash to overcome each other and make these two histories and as I said, for years it induces replacement behavior

The right view and approach to a school-based economy even in the framework of ethical school of Islam is a view to free market and to some extent towards reasonable distribution of wealth. People should enjoy having the talent, understanding and environmental preparation and they themselves provoke production based on the demand and supply and to push the government out of the economy.

John Maynard Keynes, the English economist and philosopher, describes the view on the market as distribution of wealth from up to down and believes growth in any geography looks at big enterprises and encourages the governments to support industry and agriculture, services and leaders of economy and unlike him, Friedrich August von Hayek, who is considered as the founder of Austrian economy does not believe in distribution of wealth from up to down. Hayek believes distribution of wealth from up to down increases the Gini coefficient and decreases the volume of capability in producing jobs and both are liberal with two different views and these two views have set the base of the economies of West and East for their one-hundred year challenges.

We have to support the big enterprises for creating fast growth but in a ten-year plan range, the path for supporting should be directed by at least 10% per year towards supporting the small enterprises and lower classes of the society. We should stop banking chaos and distribution of money and instead of increasing salaries, goods are distributed and distribution of goods via the government should be stopped and it should be handed over to the enterprises which will be a pretext for encouraging them to production, and let the entrepreneurship and employership is formed and organized in order to increase the output and productivity.

If the production is the yardstick for growth, we should save work from the damages of rebellions.  The employer should have this power to go through good and bad of his work. I think it went too much. I apologize for prolonging it and of course I will continue this topic later.

The post Marxism Is Not an Economic School appeared first on Iran News Daily.

Speaking to ILNA, Hariri said that Iran is a good market for Chinese cars and added that lifting ban on imports of cars in Iran will provide good ground for Chinese cars to roll in Iran’s market. He added that since the ministry has set a price cap for the imported cars, it has made the country have less options and importers will be unable to think of European, Japanese and South Korean cars.

He added that the price of Chinese cars is in the range of 10,000 to 20,000 euros, adding that with the set price cap, Chinese cars would dominate major part of Iran’s car market and one cannot evaluate it as positive or negative move.

He went on to say that people’s purchasing power is clear and due to the economic ties and development, people’s purchasing power has strongly declined and purchasing a 20,000-euro car with inclusion of tax will not be economic and the question is how many people can buy cars with such a price.

Hariri noted that only some part of the middle class will be able to buy Chinese car with the price around one billion tomans and European cars will still be leading ones in the market with higher prices.

He added that during the sanctions era, Chinese companies invested in Iran and could take some part of Iran’s market, and by the way possibility for imports of Chinese cars is more than from other countries because the after sales services of Chinese cars in the country is possible  and they can enter Iran’s market faster.

He reiterated that Chinese cars have gained acceptable rankings in the world and some of them have received European standard certificates but some other factors are important in imports of cars from China and maybe some old models at first are imported from China.

Hariri added that the role of private sector in the foreign trade is not vast, adding that 55% of non-oil exports of the country last year and in the first half of the current year has been non-oil products and in this field, the private sector cannot play colorful role, adding that 24% of the foreign trade is also the mineral products that it is in the monopoly of the government sector and it means that government companies account for 80% of Iran’s foreign trade.

The post Chinese Cars Can Have Significant Share of Iran Market appeared first on Iran News Daily.

Speaking to ILNA, Ebrahim Mohammad Rezazadeh touched upon the trade between Iran and Lebanon and said that the highest amount of Lebanon’s imports has been between $19b to $20b and this amount has fallen sharply after the Covid pandemic.

He added that the latest statistics show that Lebanon’s imports were around $11.3b in 2020. He blamed the pandemic for the sharp decline for Lebanon’s imports from Iran and also pointed finger to the economic problems in Lebanon like devaluation of the national currency.

He then pointed to the shares of countries from Lebanon’s market in the past 20 years and said that China tops the list with 9.2% and the U.S. trails China with 8.3%. Italy, France, Germany, Turkey, Russia and Greece are the other major trade partners of Lebanon and in the past five years, China, Italy, the U.S., Greece, Germany and Turkey have dominated Lebanon’s market.

Rezazadeh noted that shares of countries in Lebanon’s market is less than 10% while the figure is usually more than 10% in other countries.

He noted that Lebanon has the highest number of migrants to other countries and according to reports, Lebanese living abroad are four times of the current population in Lebanon, in other words, one-fourths of Lebanese live abroad and most of them are businessmen or they are involved in trade and actually the main exporters to Lebanon are the Lebanese themselves.

He went on to say that the climax of Iran’s exports to Lebanon was 2016 when Iran exported goods worth $93m to Lebanon and the amount declined in the past three years and it dropped to one-thirds and Iran’s exports declined to $30m last year which is only 0.3% of Lebanon’s market and it not a considerable figure.

Rezazadeh admitted that the trade between Iran and Lebanon is not satisfactory noting that Iran has not penetrated into Lebanon economically and it has focused most on strengthening economic bond while other countries wage war in this country and at the same time they boost their economic penetration.

He noted that having good and strong economic relation does not necessarily mean having and broadening economic ties and experience has showed us that market is administered by the private sector.

He reiterated that Iranian goods have their own fans in Lebanon because Lebanese are certain Iranian goods are halal but first we need to provide necessary infrastructures like transfer of money.

Rezazadeh also said that Iran and Lebanon should first get acquainted with their capabilities and capacities and Iranians need to change their approach to Lebanon as they look at Lebanon like 20 years ago and Lebanese are not familiar with Iranian products and the number of Lebanese living in Iran is few.

He further said that as long as we do not know the capacities we will be unable to start a joint cooperation. He also said that Lebanese traders should come to Iran and have direct contacts with Iranian producers especially during the exhibitions.

He also said that barter trade is currently the best solution for trade between the two countries due to problems in monetary transactions.

Rezazadeh noted that launch of the exports guarantee fund, direct presence of traders and launch of chain stores are of the capacities which can reinforce trade ties between the two states.

The post Iran Accounts Only for 0.3% of Lebanon Market appeared first on Iran News Daily.

In a meeting with three trade delegations from different provinces of  Iraq, Ale-Ishaq said that the condition of Iran and Iraq is today in a way that it paints a good picture for future economic activists of the two states. He added that Iraq in recent years has been Iran’s first or second trade partner, adding that in the next 15 years, market of the two countries will create a big environment for their economic activists and any kind of trade and economic project will be possible. He reiterated that therefore anyone starts faster and becomes pioneer, he will be the most successful one in 15 years.

He pointed to the strong determination of senior officials of the two states for broadening economic ties, adding that in some certain periods, the trade volume between Iran and Iraq has hit $13b and this figure is to be increased to $30b, because in different industrial sectors of Iran and Iraq’s market this capacity exists for boosting trade.

Ale-Ishaq added that currently there is no balance in trade between the two countries and export is in favor of Iran and both sides have agreed to balance the trade and this is good opportunity for traders of the two countries.

Meanwhile Head of Iraq’s Al-Amarah Chamber of Commerce Mr. Ala Vali Ali, for his part, said that Iran ranks third in earmarking trade tariffs, adding that therefore there is a tough competition between Iran and China and urged Iran to earmark more trade tariffs which will help the trade relation between Iran and Iraq to increase.

He stressed that Iraqi traders expect the trade volume with Iran to exceed $24b, adding that materialization of this requires strong determination from both sides especially from Iran’s private sector because he believes private sector in Iran is the main actor in broadening economic ties.

He reiterated that the goal behind the visit of this delegation to Iran is to remove obstacles in way of trade between the two states as well as acquaintance of Iraqis with Iranian companies and their products.

The post Iran-Iraq Market to Become the Biggest in 15 Years appeared first on Iran News Daily.

The post IME Weekly Trade Surpasses $221m appeared first on Iran News Daily.

IRAN NEWS ECONOMIC DESK

TEHRAN – Iranian commercial attaché in Kabul Mohammad Mehdi Javanmard says almost half of imported goods to Afghanistan market are from Iran, adding that Afghanistan enjoys having good capacity for imports of technical and engineering imports.

Speaking on the current condition of Iran’s trade with Afghanistan and when was asked why Iran’s exports to Afghanistan have remained unchanged between 3 to four billion dollars and it has not increased, Javanmard said that the capacity of Afghanistan market is not more than this figure.

He added that in the first year of entering Afghan market, Iran’s exports to this country were around $1b and the figure rose to $3b in 2013.

Javanmard further said that currently Iran’s exports to Afghanistan are around $4b and due to some regulations of the Central Bank the figure has actually increased by $30.

He noted that Iran’s exports of goods to Afghanistan are valued at $3b while the total volume of Afghanistan imports is around $7b, and Iran actually takes the control of half of Afghanistan market. So the condition for Iran’s exports to this country is good and considerable amount of goods in Afghanistan is Iranian, he added.

He noted that because of devaluation of the national currency, export is justifiable but export needs integrated and targeted planning and if export policies are accompanied by planning, the country will have organized export and it can also witness surge in export.

Javanmard also pointed to the recent exhibition of Iran’s technical and engineering services exhibition in Afghanistan and said the exhibition saw the biggest trade delegation of Iran in Afghanistan in the past 25 years, adding that the good relations between both countries have led to good relations between traders of them and the exhibition was welcomed uniquely by Afghan people and companies.

He also urged Iranians to work on exporting technical and engineering services to Afghanistan, saying that Afghanistan with a population more than 40m has great capacity in developing industrial infrastructures and it is a good opportunity for Iranians for transfer of technical knowhow to Afghanistan.

The post Iran Dominates Half of Afghanistan Market appeared first on Iran News Daily.

Speaking in an exclusive interview with Iran Daily on the occasion of OPEC’s 60^th anniversary (September 14), Mehdi Asali, a former director for OPEC affairs at the Iranian Oil Ministry, added that increasing production of high-quality petroleum products and petrochemicals is another favorable measure which is quite possible to implement.

He also commented on OPEC’s market influence and role, future challenges and formation of OPEC-plus.

Excerpts of the interview follow:

IRAN DAILY: In the 1970s, OPEC was the oil market’s greatest power. At present, however, the organization does not have the same status. What has reduced OPEC’s influence in the world market?

MEHDI ASALI: A glance at the reasons contributing to OPEC’s significant market influence in the 1970s will help shed light on the causes of the organization’s diminished clout in the following decades. Three main variables impact the extent of OPEC’s market influence:

1. Its share of the oil market (the bigger it is, the greater becomes the organization’s influence.)
2. Price elasticity of demand for its oil (the lower the price elasticity, the greater becomes the organizations market influence.)
3. Price elasticity of non-OPEC supply (the extent of the elasticity of supply by non-OPEC producers)

In the 1970s, these variables tilted in OPEC’s favor, helping the organization have a market share of over 50 percent. The elasticity of demand by the customers of the organization’s oil was also not very high compared to the increase in OPEC’s crude price. This was because importing refineries had adjusted their technologies according to the quality of OPEC members’ oil and were unable to find other types of crude to replace that. In addition, at that time, production technologies failed to be advanced enough to allow non-OPEC producers to immediately increase output upon detecting changes in the crude price. Thus, it was, in practice, OPEC that set the prices. Since then, these variables have begun to gradually undergo changes that have not been in OPEC’s favor. Some of the changes have been inevitable, such as the increased energy consumption efficiency and reduced energy intensity in the world. The other cause of OPEC’s reduced market influence has been the increase in the number of non-OPEC producers and their production.

Nevertheless, OPEC could have reduced the number or pace of some of the changes through adopting better strategies.

Will OPEC’s waning market influence lead to the disbandment of the organization?

No. OPEC still holds the biggest share in the global energy market and, most probably, oil will continue to have a significant share of the global energy mix in coming decades. In addition, the cost of oil production by OPEC members is still lower than that which is spent by the world’s other major producers. Thus, OPEC is still a major player in the global oil market and can increase its influence if it revises its strategies. No doubt, at present, OPEC is faced with a volatile situation. Technological advances in global supply and demand sectors have impacted the organization’s traditional market influence. This situation, however, will not necessarily lead to OPEC’s disbandment.

Why has the 60-year-old OPEC turned to cooperation with non-OPEC countries and formed OPEC-plus? Why has the organization voluntarily reduced its production and market share?

Market share plays a significant role in determining the extent of a major oil producer’s market influence. For a greater oil market share, OPEC has two options: It can either expand its production capacity through hefty investments to sideline other producers, which may lead to a fall in prices and impose losses on the organization or, through cooperation with non-OPEC producers, create a balance in the market and prevent a plunge in oil prices, which will be a win-win situation.

Therefore, it is quite natural that OPEC would make efforts, through collaborations with a number of non-OPEC members, to expand its impact on the market. Major non-OPEC producers, such as Russia and other participant countries in the Declaration of Cooperation, have an even higher motivation for cooperation than OPEC members. This is because the cost of oil production by OPEC is still much lower than that by non-OPEC producers, meaning that in any long-term market competition, non-OPEC countries will be the ones to sustain losses.

The recent considerable drop in oil prices was not solely due to the coronavirus spread. A number of factors have led to the weakening of the market. Over the past few months, the oil market has suffered major shocks simultaneously from the supply and demand sides of the market, which has been a rare phenomenon in its history. On the supply side, the unprecedented accumulation of oil and petroleum products in major importing countries’ depots and the considerable growth in US crude production came as shock to the market. In 2019, total crude output by the US, Brazil, Norway, Canada and Russia surpassed that of OPEC. On the other hand, the outbreak of the COVID-19 pandemic in early 2020 and the consequent closure and suspension of businesses and economic activities, particularly international and intercity flights, caused the global demand for crude and petroleum products to witness an unprecedented drop, as a result of which the oil price plunged to its lowest level since 1991.

These structural changes, along with the unexpected shocks, such as the outbreak of the coronavirus pandemic, have created major challenges for OPEC at a time when some of its main members, such as Iran and Venezuela, are struggling with cruel sanctions, and a number of them, like Iraq and Libya, are grappling with political civil conflicts and unrest. Under such circumstances, OPEC loses some of its market share. In addition, such conditions have led to an increase in the price elasticity of demand for OPEC oil and the price elasticity of non-OPEC supply. All these three changes reduce OPEC’s market influence.

How important is OPEC’s market coordination role? Is the oil market capable of surviving without OPEC?

OPEC is the sole major player in the oil market which is capable of providing such coordination. In fact, the excess capacity maintained by OPEC is the main shield against oil market fluctuations helping the organization to weather them. This excess capacity is by far more important than US shale oil capacity in fending off shocks and preserving market stability, because of the lower costs involved in OPEC members’ oil production. Most producers of US shale oil are unable to bring production costs down to less than $40 per barrel. This comes as the average oil production cost by OPEC members stands at $20 per barrel. Many experts maintain that without OPEC, the oil market will be exposed to many fluctuations and become unstable. Since wild oil price fluctuations have many negative consequences, OPEC’s presence and decisions, aimed at ensuring market stability, create a high value for the global economy.

What will be OPEC’s future challenges?

Compared to the previous decades, OPEC is currently faced with a changing world and inevitably has to rethink its strategies accordingly. Among the main challenges facing the organization is climate change resulting from fossil fuel production and consumption. It appears as if the international community will, in the coming years, inevitably move toward lowering production and consumption of oil, coal, and even natural gas as a high-priority policy.

To overcome such challenges, OPEC can:

1. Make investments to expand its members’ oil production capacities and develop their technologies to capture, store and use the carbon emitted in the processes of producing and consuming oil and gas
2. Increase its member states’ energy efficiency and diversify their economies to reduce their reliance on oil
3. Promote the use of crude oil and natural gas as raw materials for production of base petroleum and gas products, in downstream industries, particularly the petrochemical sector

What measures should be implemented by Iran given what you said about the future challenges and the required strategies to address them?

What was said about OPEC and ways to increase its market influence holds true about Iran and any other member country. Iran must gradually shift from exporting crude oil to selling petroleum products and petrochemicals, as it makes investments to expand its oil and gas production capacities. Increasing production of high-quality petroleum products and petrochemicals is also a favorable measure, which is quite possible to implement. As a parallel measure, the country must also invest in the development of technologies to boost energy efficiency, reduce its energy consumption and increase its carbon capture and storage capacities. This will enable the country to continue using its huge oil and gas reserves in the coming decades.

The post Iran Must Expand Petchem Exports to Handle Future Market Challenges appeared first on Iran News Daily.

IRAN NEWS ECONOMIC DESK

TEHRAN – Iran’s main stock index broke through the key 2 million point mark for the first time ever on Sunday, state media reported, amid warnings that the market is overheating.

The Tehran Stock Exchange’s benchmark TEDPIX index gained 46,844 points in early trading, the official IRNA news agency said, up 2.4%.

The index closed at 1,961,649 on Saturday after surging by over 57,325 points, or 3.01%, on the day, according to the Tehran Stock Exchange (TSE) website.

Analysts and some lawmakers, however, have warned that the move might raise the risk of a stock market bubble as the rising market is at odds with Iran’s deteriorating economic fundamentals, which are also feeling the impact of the coronavirus outbreak.

But authorities have denied that there is a bubble in the country’s stock market.

Meanwhile a member of Supreme Council of the Stock Exchange told ILNA news agency that the capital market gets momentum from the dollar and forex market, adding that unfortunately policy-making in the national economy is moving towards chaos in the forex market, adding although people expected stock market correction, the condition of forex market has led to these records in the stock market.

Saeed Eslami pointed to the factors behind the current rise in the capital market which in the past days some signs of correcting prices had been seen. He added that the capital market is highly dependent on the economic decisions and since the dollar rate in the country has grown in the pat days, it has led to the rise in the prices in the capital market.

He noted that signals in the other market make people think of value of their money, and the capital market is definitely not an exception and people, in order to keep the value of their properties, prefer to invest in the capital market which is cashable one.

Eslami criticized the government’s policy-making which has forced people and investors to expect more inflation and devaluation of their properties.

He said the condition of capital market is not concerning for now.

The post Iran Stock Market Surges to Record High appeared first on Iran News Daily.

The post Britain, EU Urged to Sort Out Financial Market Access appeared first on Iran News Daily.