Growth in Capital Market: Necessary but not Sufficient
“When the new Government got the office, Tehran Stock Exchange size was $79 billion, this figure today is $184 billion” said Dr. Fetanat, Head of Securities and Exchange Organisation of Iran, during the inauguration of FINEX2016.
The number of retail traders has also been increased significantly during the last three years: there are more than 10 million retail traders in Iranian capital market: 40% more than 2013.
Although the capital market in Iran with risk-free Governmental bonds, yielding more than 30%, where inflation rate is 18% sounds very exciting, if Iran is determined to attract foreign investors, she has to work hard on accessibility and certainty of her capital market.
Foreign Investors in The Iranian Capital Market
With 25 new foreign investors registered during the last month, the total number of active foreign investors in the Iranian capital market has reached 636 where 82 of them are investing companies.
Statistics show that the investors are from all five continents and the value of their trade during the last month was $23 million.
Online Trading becomes more and more popular among the investors, making nearly 40% of the total trade, worth $4.2 billion, within the last three months.
The share of the top three brokerages in Online Trading in this period was: Mofid Brokerage Co, 21%, Farabi Brokerage Co, 4%, Agah Brokerage Firm, 3%.
Source: Stock Exchange Organization of Iran
Industrial Sector Suffers
The economy over the last Iranian fiscal year, i.e. 21 March 2015 to 20 March 2016, experienced a growth of 0.9%, just to be above zero.
The still suffering industrial sector has grown negatively: -2.2%. Agricultural and Services sector had a growth of 5.4% and 0.2% respectively.
Over the first quarter of the new year, Import has reduced by -13% and export by -5%.
Since Iran imports mainly intermediate goods, the decrease in import would affect the production directly.
For the current year, GDP is expected to grow 4% -already half of what was mentioned earlier- even though it may happen but it seems improbable that the industrial sector would have a positive contribution.
Source: Statistical Centre of Iran