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“Currently, in order to deal with destructive violations such as unauthorized transactions, we are considering a bill to amend the capital market law for the independence of Stock Exchange Organization (SEO) and to add new restrictive regulations,” Pour-Ebrahimi said.

According to the official, the details of the mentioned bill have been reviewed by the committee’s specialized working groups, and it is now being reviewed by capital market experts and specialized institutions to be passed by the end of summer (September 22).

He pointed to the enhancement of transparency in the capital market as one of the main axes of this bill and said: “In order to prevent violations and problems due to unprofessional behavior and illegal activities, the capital market needs to increase transparency.”

Unprecedented fluctuations in the Iranian stock market over the past few months have led shareholders, experts, and scholars to call for the government to increase its support for the market.

Following the rising concerns over the market conditions, in early April, the Government Economic Coordination Headquarters, in its 216th meeting, approved some new directives for regulating the stock market.

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Reducing taxes on production units active in the stock market, strengthening the Capital Market Development and Stabilization Fund, eliminating subsidized foreign currency allocations, and stabilizing the ownership interest of the mines are some of the measures considered in the budget bill to support the capital market.

Allocating a 20-percent tax on legal entities is considered in next year’s budget bill which is less than the previous years. Reducing the taxes imposed on production units will make them more profitable and therefore their performance in the stock market will improve.

Also, the direct taxes collected from production nits is expected to be injected into the Capital Market Development and Stabilization Fund in order to be used to improve and develop the market.

Based on the next year’s budget bill, no subsidized foreign currency will be allocated to special entities to import certain goods. Experts and analysts believe that this decision is going to have a very positive impact on the stock market since it will prevent rent and unrealistic pricing.

The draft of the national budget bill also indicates that the government will be less reliant on the stock market to compensate deficits and fund various development projects which is another positive aspect of the mentioned bill since the stock market will be less affected by the politics and will follow a normal trend created by supply and demand.

Earlier this month, Market Analyst Peyman Hadadi had said that the national budget bill for the next Iranian calendar year indicates that the government has a more positive view of the market for the upcoming year.

According to Hadadi, the allocation of a separate budget for the Capital Market Development and Stabilization Fund shows that the government is taking the necessary measures to provide stronger support for the market and to ensure its growth in the future.

“The allocation of a budget line for the Capital Market Development and Stabilization Fund is considered one of the most important points of the [Iranian calendar year] 1401 budget bill,” Hadadi said.

The expert also pointed to the imposition of tax on rival markets including the housing market as another important and influential change in the next budget bill and said: “Taxation of luxury cars and expensive housing, along with taxation of bank deposits of legal entities, is also one of the important issues that should be appreciated about the budget bill.”

He also mentioned the elimination of subsidized foreign currency allocations and noted that this would create huge changes in the market and will be the starting point for some positive progress in some industries active in the market.

The elimination of subsidies on foreign currency is not only beneficial for the country’s macro-economy but also has a positive effect on the capital market transactions, the analyst said.

He further pointed to the reduction of taxes on manufacturing companies and added: “The important action of the government in reducing the tax on production units from 25 percent to 20 percent will largely offset the increase in energy costs.”

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“The 10-article package for supporting the capital market has been approved by the Government Economic Coordination Headquarters and the details of the proposals will be announced by Minister of Finance and Economic Affairs,” Eshqi said.

Based on the mentioned package, the government is going to prevent a sharp rise in the costs of the industrial production sectors and will also help Capital Market Development and Stabilization Fund, according to the official.

In addition to the specific budget line provided in the next fiscal year budget bill, the fund is expected to be provided a much bigger funding, approximately 10 times the allocated figure in the national budget bill, through the transfer of shares and other financing methods so that it can do its job, Eshqi explained.

Market analysts and experts believe that the allocation of a separate budget for the Capital Market Development and Stabilization Fund in the national budget bill shows that the government is taking the necessary measures to provide stronger support for the market and to ensure its growth in the future.

“The allocation of a budget line for Capital Market Development and Stabilization Fund is considered one of the most important points of the [Iranian calendar year] 1401 budget bill,” market Analyst Peyman Hadadi said earlier this week.

Over the past 15 months, continuous fluctuations in the Iranian stock market have led shareholders, experts, and scholars to believe that the government should not interfere in the stock market, saying the government’s pre-ordered and unrealistic pricing of some state-owned shares is the main reason for the capital market’s current downward trend.

In mid-November, Eshqi had said the government was following new strategies to improve the capital market in the long term.

“The government’s policy, in the long run, is to avoid pre-ordered pricing. This policy has been repeatedly stressed by the president and the government’s economic team and has been placed on the government’s agenda,” he said.

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“The Securities and Exchange Organization will formulate, implement and monitor its policies and programs including supporting investors, creating a transparent, efficient and equitable market, and reducing inclusive risk based on the market’s broad objectives” Eshqi said.

Referring to the SEO’s seven main strategies in the new management period, Eshqi said: “The first strategy is to use modern mechanisms to increase public monitoring of the entities offering shares in the market; the second strategy will be to develop regulatory tools in a preventive manner and in line with market development.”

According to the SEO head, the third strategy is to amend the market’s rules and regulations to increase justice and accountability, while the fourth strategy will be strengthening the medium- and small-scale level financing through new mechanisms.

Facilitating the processes and developing the infrastructure for attracting and managing foreign capital in the market, along with engineering the media mechanism to provide the shareholders with up-to-date information are the fifth and sixth strategies, the official said.

The last strategy will be to re-engineering the new generation of technical infrastructure with the aim of increasing security, sustainability, and ease of access, he added.

Eshqi further noted that based on the strategies mentioned above, which have been developed taking into account the most important challenges of the capital market, various programs have been prepared in three areas.

The first program is to focus on the main mission of the organization which is the development of the capital market, he emphasized.

“Diversification and promotion of the capital market (in terms of market, tools, and institutions), increasing the transparency and quality of information published in the capital market, reforming business processes and increasing the efficiency of financial markets, development of financial institutions and de-monopolization, development and strengthening of technical infrastructure, facilitating and clarifying the issuance of licenses in the capital market and the development of the debt market and increasing its liquidity will be pursued in this regard,” Eshqi explained.

Intelligent monitoring and regulating information access in the capital market are also among the major programs of the new SEO board.

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“When people’s resources are directed into the capital market, enterprises and companies listed on the stock exchange can have stronger financing from this market, and consequently have more investment and increases production and employment,” Mohammad-Ali Dehqan Dehnavi told IRNA on Monday.

Referring to the government’s performance in directing people’s capital to the stock market, Dehnavi said: “SEO believes the government has a great role to play in the country’s economy, the government is the macro policy-maker and the main regulator of the country’s economy, therefore in countries like Iran where the government is directly involved in the economic decisions, it should also be present in the production sector. “

Dehqan Dehnavi further emphasized that the government’s duty is to invite people into the capital market, adding: “The stock market is a platform that provides financing for production.”

According to the official, his organization has considered several incentive programs for supporting the shareholders and for protecting the newly joined members.

Following the supportive measures taken by the government, the Iranian stock market has been gradually getting back on track and experts believe that the market is regaining people’s trust.

Analysts and scholars believe that trades in the Iranian stock market will be much better and more reasonable in the second half of the current Iranian calendar year (started on March 21) compared to the first half of the year.

According to them, reaching a possible agreement on the nuclear deal will have a positive impact on the capital market and pave the way for significant growth in the market.

“Reaching such an agreement will result in the reduction of the costs in major companies and will certainly have a positive impact on the market as a whole, especially on the shares of export-oriented companies,” stock market Expert Mostafa Safari said in late July.

“Reducing costs will eventually increase the profits of corporate stocks; Therefore, we hope that the lifting of sanctions will be implemented as soon as possible so that we can see the positive impact of this event in the market,” the analyst added.

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As reported, over 6.966 billion securities worth 47.296 trillion rials (about $1.126 billion) were traded at the TSE on Tuesday.

The first market’s index gained 9,725 points, and the second market’s index rose 45,844 points.

TEDPIX had risen 5,000 points in the past Iranian calendar week.

During the past week, the indices of Civil Servants Pension Fund (CSPF), Social Security Investment Company, and Barekat Pharmaceutical Group were the most widely followed indices.

A capital market analyst says that TEDPIX is going to improve in the second half of the current Iranian calendar month (ends on August 22).

Mehdi Bayat-Manesh noted that considering the current trend of capital inflow into the market TEDPIX is expected to rise in the current month.

“It is expected that the upward trend of the market in the last one month, when the stock index rose from 1.4 million points to 1.8 million points, will continue, and it is also likely that according to the forecasts, the stock index will once again enter the 1.4 million-point channel by the end of the current month,” he said.

According to Bayat-Manesh, the government policies for supporting the upward trend of the market should continue in the coming months in order to ensure this upward trend.

“It is also better for the managers of Iran’s Securities and Exchange Organization (SEO) to also take the necessary measures for supporting the market so that the stock market index can once again reach more than two million points, which takes at least a few months to happen.”

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Speaking to the press on the sidelines of a cabinet meeting on Sunday, Dejpasand said: “The Economy Ministry plays a major role in formulating the country’s economic policy.”

“This ministry should take measures to facilitate business and remove barriers so that investors can enter the market, and as a result, new job opportunities will be created,” he added.

Over the past few years and especially since the re-imposition of the U.S. sanctions, the Iranian government has been implementing new strategies to cut reliance on oil and promote domestic production using internal capacities.

The capital market was one of the major areas in which these new strategies manifested. As part of the mentioned strategies, the government defined a holistic program to encourage the country’s production sector to enter the capital market and use its huge capacities for funding development projects and boost production.

Back in February, Dejpasand had said that the capital market provided five quadrillion rials (over $119 billion) of financing in the first 10 months of the previous Iranian calendar year (March 20, 2020-January 19, 2021).

The official had stressed that in order to realize the government programs for the capital market, it is necessary to plan in such a way that the currency market and the capital market go forward side by side and act in harmony.

“Today, Iran is free from absolute dependence on oil, and the volume of non-oil exports is more than the oil exports. The share of non-oil exports in total exports has increased significantly and this trend is expected to continue after the sanctions are removed,” the minister said..

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Over 10.375 billion securities worth 67.805 trillion rials (about $1.614 billion) were traded at the TSE on Wednesday.

The first market’s index rose 24,090 points, and the second market’s index rose 35,716 points.

Mohammad-Ali Dehqan Dehnavi, the head of Iran’s Securities and Exchange Organization (SEO), has announced that the organization’s advisory council has proposed two new programs for supporting the stock market in the current Iranian calendar year (started on March 21).

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.

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Some, on the other hand, believe that the government should not interfere in the stock market, saying the government’s pre-ordered and unrealistic pricing of some state-owned shares is the main reason for the capital market’s current downward trend.

Now the question is how the government can really support the stock market to help it get back on its trail?

So far, the government has repeatedly stated that the activities carried out in this market are not aimed at interfering in stock exchange transactions or directing the market, but are efforts for reducing the bubble created in the market and to prevent further decline of the stock market index.

Last week, in the 216th meeting of the Government Economic Coordination Headquarters, President Rouhani presented a report on the government’s supportive measures for the stock market, saying: “This year, which has been named the year of supporting production and eliminating obstacles, the government is trying to remove obstacles to the growth of the capital market and will try to encourage people to enter this market with the necessary training and arrangements.”

The government supports the capital market to direct liquidity into productive sectors and, in general, to de-centralize the economy and to help economic transparency, he said, adding that the government will continue to offer shares in state-owned enterprises and institutions in the capital market.

In its latest supportive decision, the government has approved to inject 240 trillion rials (about $5.7 billion) of resources into the market in the form of bonds which most experts evaluate as a positive measure. It is said that these funds are gradually injected into the market and help increase the liquidity until new resources enter the market.

It has been said that these resources that enter the market will also motivate shareholders, and therefore real investors will be encouraged to invest in the market.

In response to Rouhani’s remarks, stock market expert Amirali Amirbaqeri, believes that letting the supply and demand to determine the prices in the market is the most important support that the government can have for the capital market.

“The situation must develop in such a way that the country’s economy can continue to live in real life based on the real forces of supply and demand,” Amirbaqeri stressed.

Stating that the government as a regulatory body is obligated to intervene in the market in certain circumstances, the expert said: these interventions should only be regarding the general issues and long-term outlook of the capital market.

In a healthy market, stock prices converge to the shares’ real value, and for this reason, the government should only facilitate this process and stop pre-ordered pricing for the shares related to some products such as steel.

“It should not be forgotten that the country is now in an economic war, and naturally various bodies such as the government and other institutions should act based on the country’s current situation,” Amirbaqeri said.

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