Investment Funds Expected to Help Rescue Share Market

Financial resources worth about 3,000 trillion rials ($12.7 billion) are parked in fixed income investment and brokerage firms and should flow into the share market, head of the Securities and Exchange Organization said.
“Market conditions would determine how much will be injected into the stock market, “Mohammad Ali Dehqan-Dehnavi was quoted as saying by ILNA.
Iran’s share market is in dire need for quick money to recover from a bearish trend that has dragged on for almost a year.
With large sums, banks, investment funds and brokerage firms are now seen as possible saviors of the bourse in dire need of help to survive.
With the obvious aim of propping up the sluggish share market and boost demand, fixed income investment funds have been obliged to allocate a bigger portion of their portfolios to stocks and reduce their share in bond investments.
According to SEO rules, fixed income investment funds are obliged to invest at least 15% of their resources to buy stocks, stocks rights, option contracts and commodity-based certificate of deposits.
In a similar decision, the SEO approved regulations that allow banks to acquire stakes in investment banks and market making companies, a move that should increase their role in the stock market.
Similarly, the Central Bank of Iran annulled all previous regulations that banned giving loans by banks to brokerage firms, investment funds and investment holding companies to invest in shares.