Mohsen Khodabakhsh, the SEO deputy head for supervision on exchanges and issuers, said the formation of a financial stability council in the country can become the basis for fundamental decisions in the capital market. Accordingly, Securities and Exchange Organization proposed the formation of this council to the government.

As reported by IRIB, Khodabakhsh stressed the need to establish the financial stability council and monitoring of investment markets, saying that at this time the money market, capital market, as well as insurance and pension funds can stabilize the country’s economy together.

Stating that the global markets are facing many risks related to changes in laws and regulations, he added: “Predictability of major decisions is a very important issue in the face of risks regarding laws and regulations.”

If a decision is made on a grand scale for a certain period of time, under no circumstances this decision should change during that period, the official emphasized.

Emphasizing that the investor needs predictability and stability, not support, Khodabakhsh said: “Lack of trust as the highest asset in the capital market causes people to choose other options for investment, and this leads to capital outflow from the market.”

The SEO deputy head also referred to the measures taken by the government to support the capital market and added: “The government took important measures to improve the market and to make it more predictable, but there was no serious change in the market path. These fruitless efforts are due to mistrust that has been formed over the years and has not yet disappeared from the market.”

Market Analyst Ahmad Eshtiaqi believes that the Iranian stock exchange market can grow by 30 percent by the end of the current Iranian calendar year (March 20, 2023).

In an interview with IRNA in early May, Eshtiaqi pointed to the growth of the stock market index and the factors affecting it and said: “It seems that the shares of companies still have room for growth and according to the forecasts, the stock market can grow by about 30 percent by the end of the year, but this growth will be gradual and slow.”

The analyst noted that the shareholders’ interest in the capital market over the past few years has been due to the value of companies’ stock, so when the shares still have room to grow, the market index will grow as well.

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The unveiling ceremony of the mentioned systems, held on Tuesday, was attended by Finance and Economic Affairs Minister Farhad Dejpasand and the SEO Head Mohammad-Ali Dehqan Dehnavi.

According to Dehnavi, these systems are going to offer various services to the companies and people active in the market.

“Companies or financial institutions had to go through many processes which took a long time for their activities in the stock market; this issue was considered as one of the concerns of the traders and people active in this market,” the official said.

Dehnavi noted that launching these single window systems would accelerate and facilitate many affairs and hopefully services would be provided more quickly and easily to the clients and companies.

Through the mentioned systems, the SEO, in collaboration with the Real Estate Registration Organization of Iran, the Iranian National Tax Administration (INTA), official newspapers, and the Iran Post, will provide all the necessary services in the shortest possible time, he explained.

According to the official, the single window services will be accessible at the SEO’s new building, and by launching these windows, services that need frequent commute will be provided more easily and in shorter times.

SEO had launched another single-window system, on June 30 2020 to accelerate the process of private companies’ acceptance to the stock market.

Iran Chamber of Commerce, Industries, Mines, and Agriculture (ICCIMA), Iranian Association of Internal Audits (IAIA), Tehran Stock Exchange (TSE), and Iran’s over-the-counter (OTC) market, known as Iran Fara Bourse (IFB), signed a memorandum of understanding (MOU) on June 30, 2020, for launching the mentioned single-window system.

The mentioned system was aimed at creating a single portal for evaluating, assessing and monitoring the financial and technical situation of private sector companies for approving their entrance into the capital market.

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Mohammad-Ali Dehqan Dehnavi made the remarks in a ceremony for signing a memorandum of understanding on cooperation between SEO and the Ministry of Industry, Mining and Trade aimed at financing the production activities through the micro capitals of the people, with emphasis on strengthening the country’s production resources as a capital market priority.

The official said: “Efforts have been made to use all the capacities and facilities of the capital market to boost production, because we believe that the final benefit of this support will return to the capital market.”

New methods of financing should be introduced and new ideas such as crowdfunding should be considered alongside the previous methods, he added.

Elaborating on crowdfunding, the SEO head said that it is a platform and base for connecting micro-savers to small and medium-sized producers, which in fact can be a manifestation of people’s inclusive participation in the economy.

At the end, the official emphasized, “With the special support of the Ministry of Industry, Mining, and Trade from the production companies listed on the stock exchange, we will undoubtedly witness the further improvement of the country’s industrial development indicators.”

Materializing motto of year

Making these remarks by the head of Securities and Exchange Organization clearly indicates that this organization is determined to support domestic production in the present Iranian calendar year (began on March 21), which is named the year of “Production: support and the elimination of obstacles”.

In fact, the SEO considers itself a serious supporter of this motto, as the two keywords of “Production” and “Capital” together consist the base for the national development, and each step to facilitate production will be resulted in expediting the country’s movement toward development.

According to the organization’s head, the capital market, with its inherent potential in the field of financial exchanges, organizing parallel markets, and creating balance in the economic system, pursues the mission of supporting production; and in spite of all domestic restrictions and international sanctions, prevents production stop through leading the liquidity toward productive enterprises.

“Without the safe “supports”, production is usually slow, so the capital market seeks to provide a safe and secure environment for those active in the production sector by constantly injecting liquidity and designing support institutions such as financing companies and planning to avoid wasting resources in unproductive sectors”, the official has stated.

SEO’s main strategies to support production

The SEO head has also expounded upon this organization’s main strategies to support the motto of this year, which is supporting production and eliminating related obstacles, as follows:

Supporting knowledge-based companies along with strengthening the traditional market is one of the tasks that the slogan of the year implies, and any move that shortens the path of producers and consumers depends on the strong support of related organizations, which should have more overlap this year.

Removing obstacles in the path of development is one of the inherent tasks of organizations, and in this regard, the SEO will put the acceleration and simplification of the licensing process at the top of its policies.

Encouraging investors to have a wider presence in the capital market is possible only by removing unnecessary regulations and administrative barriers.

The capital market will emerge as one of the most serious supporters of this year’s motto with strong strategy, identification of obstacles, and offering solutions and operational action to eliminate them.

The SEO hopes to materialize this motto through adhering to the principles of strengthening professional supervision, continuing to improve public confidence, and trying to achieve the goal of “economic development” by relying on the strength of all capital market beneficiaries, including shareholders, investors, financial institutions, publishers, experts and media.

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The fall in oil prices and the reimposition of the U.S. unilateral sanctions on Iran’s economy led the Iranian government to turn to the capital market for funding.

On one hand, the government tried to prevent liquidity from going to the markets such as gold and foreign currency, and on the other hand, considering the recent events in the Iranian economy, it also looks at this market with a view of financing, which resulted in the prosperity of this market.

The rising rate of inflation and also that of foreign currency exchange have been also mentioned as two major factors led to the flourishment of the capital market.

In addition to inflation, which has been one of the main drivers of capital market growth in the past two years, another market driver is changing the attitude of government officials towards the capital market and trying to transfer the shares of 18 large state-owned companies through exchange-traded funds (ETFs).

 Establishment of ETFs

In May, 2020, the government sold shares in three banks and two insurance companies via the first exchange-traded fund (dubbed Dara First).

Dara First, listed on Tehran Stock Exchange, which is Iran’s major stock exchange, was the first fund from a series of three ETFs, through them shares of some state-owned organizations and companies are planned to be offered.

The shares to be offered via the mentioned Iranian ETFs belong to those governmental bodies defined in Iran’s privatization program, a comprehensive plan seriously followed up by the government to downsize and reduce its role in the economy.

The second ETF (dubbed First Refinery, or Dara Second), which holds government shares in four major oil refining companies, was offered on August 26.

The government also plans to divest shares in giant auto and metal companies through a third ETF (dubbed Dara Third).

More initial public offerings

In line with the thriving status of the capital market, TSE held more initial public offerings (IPOs), some of them were related to some major entities.

On April 15, Iran’s stock market witnessed its largest-ever initial public offering, as Social Security Investment Company (SSIC, also known by its Persian acronym Shasta) offered eight billion shares, which account for 10 percent of its stakes, for sales in Tehran Stock Exchange.

In fact, the market is trying to attract the liquidity existing in the society toward production and development projects, so, many ministries and organizations including the Ministry of Transport and Urban Development announced that they are planning to fund their development projects through the stock market.

Public knowledge of capital market improved

While some economic factors such as reduced banking interest rate, and less profit-making status of the parallel markets including the markets of gold coin, forex, and housing led people to make investment in the capital market, their improved knowledge of this market was also a prominent factor contributing to the capital market’s flourishment.

Securities and Exchange Organization (SEO) have been taking some major steps in this regard to make people acquainted with the capital market and investment making in this market.

On Wednesday, SEO Head Mohammad-Ali Dehqan Dehnavi said that the capital market has witnessed many changes in the last two years, and in terms of size, volume of activity and presence of people, there has been a significant growth and these rapid changes have changed some equations.

The official also announced that the SEO’s Advisory Council has proposed two new programs for supporting the stock market in the current Iranian calendar year (started on March 21).

The mentioned programs dubbed “capital market policy package to support production and eliminate obstacles” and “the plan to improve the position and performance of the capital market” are supposed to expand investment making in the stock market, which can lead to the economic prosperity of society, through controlling liquidity, and even the optimal use of micro-savings.

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The details of the mentioned programs dubbed “capital market policy package to support production and eliminate obstacles” and “the plan to improve the position and performance of the capital market” were presented in a meeting between Dehqan Dehnavi and the members of the SEO Advisory Council.

“The capital market has witnessed great changes in the past two years and has grown significantly in terms of size, the volume of activity, and presence of people. These rapid developments have changed some of the equations [in the market],” Dehnavi said following the mentioned meeting.

He emphasized that the structure and facilities of the stock market should be reviewed and modified based on the size and volume of today’s market and the issues it faces.

“New capacities should be created not only in the structure of the stock exchange organization [SEO] but also in all sectors of the market in order to adequately respond to the existing needs,” the official said.

According to the official, the first of the above-mentioned programs, namely “capital market policy package to support production and eliminate obstacles” has been prepared by the SEO Research Center to tackle the issues that the stock market is facing in supporting domestic production.

“It provides solutions to more than 40 to 50 capital market challenges and issues in this regard,” he noted.

In the second program, the necessity and ways of improving the position and performance of the capital market are discussed and the raised issues and problems will be addressed through specialized working groups with the presence of experts, analysts, capital market activists and managers from different sectors.

Unprecedented fluctuations in the Iranian stock market over the past few months have raised concerns among shareholders, experts, and scholars leading them to call for the government to increase support for the market.

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And this issue also influences the decision-making process of the next president, Seyed Mehdi Sadidi told Tasnim news agency on Saturday.

This year, following what happened in the first half of last year, the stock market was in a volatile situation, and accordingly, investors are still waiting for the market to return to a stable period, he explained.

Referring to this year’s presidential election, Sadidi said: “In this situation, we should use top managers with perceptual skills in the basics of politics and decision-making, and then look for technical skills, but it is while the words of some presidential candidates are being reduced to the microstructures of the stock exchange instead of the macroeconomy and the capital market, so we must focus on the candidates who are careful enough in this regard.”

“On the other hand, instability of laws is another issue that should be considered in the field of stock market; as in the capital market, we always recommend that we should be present in this market with a long-term vision. This is while momentary decisions are in conflict with this issue”, the SEO board member further stated.

Iran is on the verge of yet another political turning point as the current government incumbency gets closer to its end and seven new presidential candidates line up to try their luck for leading the next government.

Iran’s thirteenth presidential election is scheduled to be held on June 18 and this round, the current incumbent president Hassan Rouhani would be ineligible to run for re-election as he was limited to two terms or eight years in office.

Since the last presidential election in 2017, a series of events have drastically changed the Iranian political and economic landscape, on top of which the re-imposition of the U.S. sanctions and the outbreak of the coronavirus pandemic can be mentioned.

The economy, among other factors, has always played a key role in the Iranian elections and it has been high on the agenda of every candidate years after years. Due to the country’s current economic situation, this year, however, the issue is more significant in comparison to the previous rounds.

The impact of sanctions, exacerbated by the pandemic, has caused one of the toughest economic situations in the country’s history, imposing a huge burden on people’s livelihood and business activities, so the majority of people and businesses are closely monitoring the new candidates’ programs for addressing the current economic issues.

It can be said that economic programs will be the determining factor for the success of the presidential candidates in the current round of elections.

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Speaking in the SEO’s second industry expert desk on Sunday, Mohammad-Ali Dehqan Dehnavi said: “In recent years, the capital market has found a special place in the country’s economy due to the large presence of shareholders. The significance of the capital market is such that today even in political issues, such as presidential election, a large volume of content is related to the stock market, and this shows the important position of this market in the country.”

SEO has started a program for establishing industry expert desks in which the challenges, issues, and needs of various industrial sectors are discussed separately and solutions are presented to overcome them.

The first desk of the SEO, held in mid-May, was focused on the refining industry, while the second desk has been dedicated to the mining industry with a special focus on cement production units.

Speaking in this meeting, Dehnavi pointed to the goals of establishing the mentioned desks, saying: “This desk has a consulting role in the first step and will examine various issues, challenges, and problems of various industries through the interaction of different elements of the capital market and industry.”

These desks can be attended by all producers, relevant associations, scientific and research bodies, and financial institutions, he stressed.

“The opinions of policy-making institutions such as the Ministry of Industry, Mining and Trade, the Research Center of the Iranian Parliament, and members of parliament can also be used in these meetings,” the official added.

The meetings should lead to the preparation and formulation of specific solutions to solve problems and to determine what laws and regulations are needed to address the existing challenges, so that ultimately, by addressing these challenges and consequently the growth and development of the industry, the capital market could also benefit, Dehnavi stated.

Earlier on May 17, the official had mentioned forming expert desks as a productive way for discussing and resolving the issues of various industrial sectors and noted that SEO is seeking to establish expert desks for all the industrial sectors active in the stock market.

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IRAN NEWS ECONOMIC DESK

TEHRAN – New Head of Iran’s Securities and Exchange Organization (SEO) in his first press conference yesterday said SEO is the custodian of transparency in the stock market and it should increase its responses to those who are involved in the stock market and this can enhance transparency in the stock market trades.

Hassan Qalibaf Asl said some of recent developments and boom in the capital market are indebted to the efforts of  media which have helped the stock market, in cooperation with active bodies in the Bourse, to move towards more development.

He further said that one of the issues which has been seriously considered by the SEO is to avoid parallel work in the capital market and the SEO should do its best to monitor all different bodies in order to remove parallel work.

Qalibaf Asl added that the main task of SEO is to supervise and all executive affairs should be handed over to the related bodies. He said currently SEO has left the admission board and it has handed over all executive affairs to the Bourse and Farabourse.

He added that what is stipulated in the law is that SEO should act as a supervisory body, and determining the border between execution, and supervision is of the major acts of SEO.

Qalibaf Asl noted that boosting international position of Iran’s capital market is of the major goals of the organization, reiterating that boosting the financial knowledge of the public is of the special strategies of the supervisory body.

He also said improving the health of market system is on the agenda and the organization is resolved to boost transparency in operations as well as reforming some regulations and reducing the risks in trade.

The CEO of the organization added that in the first quarter of the year, some 50,000b tomans of liquidity has entered the capital market while last year, the total liquidity entering the market was 30,000b.

Qalibaf Asl added that the organization is working to facilitate entries of companies into the capital market through offering tax incentive.

He also said since 15 years ago, three major missions have been handed over to the national capital market, adding that offering shares of state-run companies, liberating justice shares and boosting the role of Bourse in financing the generative sector of economy were those missions, and completing them is of the major tasks of this supervisory body of the capital market.

Qalibaf Asl said so far 9.5m people registered in SEJAM portal and they have received trade codes while the number of those who had trade codes was 820,000 people last year.

He once again reiterated that the organization will confront with anybody who tries to create disorder and chaos in the capital market, reiterating that all financial reports of the listed companies in the stock market are transparent and authentic and it will minimize any information-rent in the capital market.

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 Head of Securities and Exchange Organization (SEO) Shapour Mohammadi announced Sat. that Iran and Montenegro will set up a joint investment fund.

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“The Securities and Exchange Organization is reviewing Bitcoin’s status for entering the country’s economy and has not yet reached a conclusion, so if any brokerage buys or sells the cryptocurrency, it violates the law, the official said.

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