Data released by the Central Securities Depository of Iran put the number of active trading codes at 36.8 million by the end of last calendar month to July 21.
The CSDI website said about 2 million codes were issued in the first four months of the current fiscal year that began in March. The past year and a half saw a flurry of new investors into the stock market unheard of in the 53-year history of Iran’s bourse.
In March the number of trading codes stood at 36.7 million -- 257% higher compared to the 10.2 million codes issued by March 2020.
The unusual upsurge in investors in a relatively short period was apparently due to the growing traction of the share market among the public following historic gains up until August of last year.
Data has it that retail investors are a majority in the stock market. Trading codes owned by institutional investors was 120,254. Codes owned by foreign investors was 3,628 by the end of the previous calendar month.
A total of 58 million codes were registered with the stock market clearing house in this period, 22 million of which remain dormant.
Sharp upsurge in the number of trading codes in the relatively short period could be explained by the government decision last year to remove ban on trade of the so-called Justice Shares.
These are shares of big government-owned companies given to the six lowest income deciles 15 years ago. The shares were not tradable until May 2020.
Shareholders need trading codes to sell Justice Shares and close to 49 million Iranians own them. The CSDI says it plans to issue trading codes for all owners of such shares. That would expand the total codes to more than 60 million.
In other words, almost 80% of the population will have trading codes, placing Iran among the top in terms of percentage of stock ownership.
Observers say such an unusual number of investors, mostly those lacking financial acumen, is a bane for the market, arguing that the share market is the function of expertise and newcomers should abstain from direct investment in stocks and investment funds or asset managers should handle trade on their behalf.
