The Securities and Exchange Organization (SEO) has paved the way to help ease share trading of small and medium-sized enterprises via the Iran Fara Bourse (IFB).
In the past only legal persons or investors from state-owned organizations could buy shares of SMEs. The SEO has now made it possible for professional investors to buy shares of SMEs, SENA reported.
Henceforth all real persons whose portfolio is 50 billion rials (around $136,986) or higher over the past six months, or their trade in Tehran Stock Exchange or IFB, the junior equity exchange, reached at least 20 billion rials ($54,644) in six months, can buy SME shares.
Moreover, the price spread for this market is set at 5%, while hitherto, no price spread was defined as such.
The SEO decisions have been posted on www.cme.seo.ir.
The IFB said earlier that it was reinventing the market for SMEs so that it can host loss-making companies or those not eligible to join the main IFB listings.
As per published data, SMEs account for less than 1% of total trade at IFB.
Companies with 50 workers or less, and 100 workers or less are considered SMEs. According to the Iran Small Industries and Industrial Parks Organization, the country is home to 80,000 registered SMEs.
SMEs play an important role in the domestic economy. They outnumber large firms, employ more people and are generally entrepreneurial and innovative. Reports say SMEs constitute nearly 92% of the 85,000 manufacturing companies.
Policymakers see SMEs as crucial through which knowledge-based sustainable development can be achieved and hope that the funds given to them will help augment their role in boosting production and creating jobs for the army of unemployed.
Many people in emerging economies look for work in small- and medium-sized enterprises. SMEs contribute roughly 45% of total employment and 33% of GDP in these countries, according to the Organization for Economic Cooperation and Development.
