The Securities and Exchange Organization (SEO) is slated to slightly loosen the equity market's limit up-limit down price band and enhance transparency through monthly reports of the listed companies in a bid to eradicate the prevailing ambiguities in collaboration with governmental bodies, SENA quoted head of the SEO, Mohammad Fetanat as saying on Monday, addressing his first press conference since the beginning of the current Iranian year on March 21.
Commenting on the measures recently adopted by the SEO's, including the introduction of a trade volume volatility cap, Fetanat declared that the current 4-percent limit up-limit down price band will be raised to 5 percent as of from May 22, "in a bid to boost the TSE' dented sentiment."
"As of May 22, all listed companies will be mandated to directly file their information via the CODAL system (comprehensive database of all listed companies) without involvement of any intermediary agent," said Fetanat, adding that the companies will be responsible for any incorrect or misleading information in the report.
> Building Up Transparency
Referring to the measures aimed at increasing transparency at the equity market, Fetanat said that apart from mandatory quarterly reports, the companies can also release monthly reports.
"Iran's two leading car manufacturers, Iran Khodro and Saipa, have already welcomed the idea," said Fetanat, adding that compliance on the part of other companies could help improve the equity market's transparency.
> IPOs Postponed
Meanwhile, launching the initial public offerings (IPOs) at both the TSE and the Iran Fara Bourse has been postponed to June amid the gloomy atmosphere of the stock market.
"While it is an indisputable right of the public limited companies to be listed and publicly traded at stock market, launching the IPOs could disturb the market by causing massive lineups aimed at garnering the lucrative shares," Fetanat observed.
Fetanat noted that the SEO is gearing up to launch the IPOs of holding companies' subsidiaries in the near future, adding that it can help increase the market's transparency.
> Preparing for Foreign Investors
With Iran and the P5+1 (the five permanent members of UN Security Council plus Germany) moving closer to a June 30 deadline for reaching a comprehensive nuclear accord, foreign investors are expected to flock to Iran when the western sanctions over Iran's nuclear program are lifted, said Fetanat, adding that the SEO is preparing the proper platform to host the numerous investors who are expected to directly and indirectly embark on investing at the equity market.
On direct investment, access to raw material and state-of-the-art technologies facilitated by the removal of sanctions is expected to help elevate Iran's production and export, said Fetanat, adding: "However, the bureaucratic maze may hinder the procedure."
Regarding indirect investment, Fetanat predicted that the equity market will be host to international inflows –the easiest way of foreign direct investment by international fund managers preparing to invest in Iran's fast emerging market. "However complying with international standards in financial statements and balance sheets and having bilingual databases including CODAL are essential," he noted.
Fetanat further mentioned opening a bank account in Iran as the most crucial impediment for foreign investors, adding that a taskforce has been appointed to pave the way for cash transfers to Iran.
