Justice Shares would be offered on a gradual basis to avoid hurting share prices resulting from oversupply, head of the Iranian Privatization Organization said.
Justice Shares are shares of big government-owned companies that were given to the six lowest income deciles a decade ago.
The shares were until now not tradable and holders of shares received a small amount of dividends in the last two years.
In late April, the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei approved a government request to permit transfer of ownership of the shares to others and allow owners to trade it in the stock market.
Explaining how he government wants to vest ownership of shares, Alireza Saleh said shareholders will be allowed to sell only a “portion” of their portfolio in a given time to prevent burdening the stock market with oversupply.
“Shareholders will be allowed to sell 20% of their shares in the next six months,” he was quoted as saying by the Securities and Exchange News Agency.
“This is to protect the value of shares,” he said, recalling that the market is barely able to accommodate those rushing to the bourse to sell.
As per published reports, the initiative will allow Justice Shares worth 3,000 trillion rails ($18.18 billion) to become tradable.
Minister’s Call
Earlier in the month, the Economy Minister Farhad Dejpasand urged people under economic distress due to the coronavirus and other ills, not to sell their shares in haste.
Head of Principle 44 Commission of the Majlis, a legislative body in charge of overseeing the privatization process as per the Principle 44 of Iran’s Constitution, said the measure will be implemented gradually over five years
"This will help marketability of shares and prevent harm to the stock market,” Hamidreza Fooladgar was quoted as saying.
Justice Share portfolio includes 49 state-owned companies in the auto, metal, mining, and agriculture, petrochemical and banking sectors. So far 35 of these companies are listed with the stock market and another 14 that are planning an initial public offering.
The shares were first offered in 2007, when former president Mahmoud Ahmadinejad decided to speed up his privatization policy by offering shares to low-income hosueholds, starting with those at the lowest end of the economic ladder.
More than 49 million Iranians have Justice Shares. Shareholders were given a month (starting from April 19 ) decide whether they want to retain ownership of the shares and sell it in the stock exchange, or let the investment companies manage their portfolio as in the past.
