Trade of the so-called Justice Shares will start officially on May 26, with shareholders allowed to place sale orders for 30% of shares in their portfolio at the initial stage.
Justice Shares are shares of big government-owned companies that were given to the six lowest income deciles a decade ago. The shares until now were not tradable and owners received a small amount of dividends in the last two years.
According to a notice posted on the Economy Ministry website, Shada.ir, shareholders seemingly are not to place orders directly – a task delegated to agent banks on their behalf.
Accordingly, shareholders should fill special forms at the banks to state their willingness to sell a portion of shares. They can place order for maximum 30% of their shares.
After collecting the orders, the banks will start selling shares collectively or on a gradual basis, subject to stock market conditions on May 30.
Last month the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei approved a government request to transfer ownership of shares to the people themselves and ease restrictions on trading Justice Shares in the stock market.
As per reports, the initiative will allow Justice Shares worth 3,000 trillion rails ($18 billion) to become tradable.
Soon after the Leader’s approval, holders of the shares were given one month to decide whether they want to directly manage their shares or let the investment companies do so, as in the past.
Shareholders are referred to a special electronic platform to determine the status of their shares.
Out of a total of 49 million Iranians who own Justice Shares, 10 million so far have said that they want to maintain ownership of the shares and sell it in the bourse, according to Shada.ir.
Citing recent decisions by the High Council of Securities and Exchange, Hossein Fahimi, managing director of Central Securities Depository of Iran, said banks consider stock market conditions when selling the Justice Shares.
This is to avoid hurting share prices and prevent burdening the stock market from oversupply.
Earlier in the month, Economy Minister Farhad Dejpasand urged people under economic distress due to the coronavirus and other ills, not to sell their shares in haste.
The Justice Share portfolio includes 49 state-owned companies in the auto, metal, mining, and agriculture, petrochemical and banking sectors.
A total of 35 companies are already listed on the stock market and 14 more are planning an initial public offering.
The Justice Share scheme goes back to 2007, when former president Mahmoud Ahmadinejad decided to speed up the privatization of government firms by offering shares to low-income families.
The scheme was launched in line with amendments to Article 44 of the Islamic Republic Constitution that requires the government to downsize and create space for private enterprise.
