Iran’s Markets Scour Globe for Expansion

Tehran's financial markets are novel by global standards. That means lots of firsts, from debt securities to derivatives, new Sharia-compliant securities get introduced constantly.

Equity listings have swelled on the back of government attempts to privatize its vast industrial holdings in the past decade. But the greatest milestone for the future of Iran's markets was the nuclear deal with world powers, as it opened the way for foreign investment.

Iran emerged from a decade of isolation last January, and now, Tehran is looking east and west for partners and capital to fuel growth in securities trading. The executives at the Securities and Exchange Organization are reviewing the possibility of increasing their cooperation with South Korean, Japanese and Taiwanese securities markets. In the meantime, an Iranian company is trying to get listed on the London Stock Exchange, Boursepress reports.

If these efforts bear fruit, they will be firsts in a long list, as Iran works to integrate its markets into the global economy.

According to Motahareh Moravej, an executive with the Central Securities Depository of Iran, the SEO, Iran's financial markets regulator, and the CSDI are "reviewing the possibility of securities trading between Iran's capital markets and South Korea's".

CSDI is Iran's financial securities custodian.

"South Korean investors have shown interest in Iranian government debt securities," Moravej added.

But that's not all. CSDI's executive, Mohammad Reza Mohseni, is to sign memorandums of understanding with Japanese and Taiwanese market officials.

The company wants to link Iranian exchanges with their foreign counterparts and facilitate cross-border investments.

Behgozin Brokerage Company is creating an investment fund in London with £50 million in initial capital to invest in Iranian securities.

"In negotiations with Behgozin's executives, CSDI agreed to help the brokerage in its interactions with international banks," Moravej said.

> Listing on LSE

A more surprising development is Ghadir Investment Company's bid to get listed on the LSE. The holding company's chief executive, Gholamreza Soleimani, unveiled his plan to list Ghadir on London Stock Exchange by the end of 2016 and sell a 20% stake on that market last February.

Given the disappointing rate of reconnection with global markets due to hurdles in processing dollars, that plan might be pushed to next year.

CSDI's head of international affairs, Mohammad Sajjad Siyahkarzade, confirmed knowledge of the issue to reporters on Wednesday.

"I know about this, but Ghadir's investment managers have not come to us. So it seems that they want to get listed on LSE directly."

Ghadir Investment Company focuses on construction, petrochemical and cement industries through its seven holdings and 140 subsidiaries. The Tehran-headquartered company was founded in 1991 and went public in 1996.

The company is dominantly (56%) owned by pension and insurance funds of the armed forces. It also has operations in petroleum, mining, transportation, power and energy, financial and commercial activities as well as information technology.