Economy, Business And Markets

Capital Market Development Fund Shaking Off Bad Image

Capital Market Development Fund Shaking Off Bad ImageCapital Market Development Fund Shaking Off Bad Image

After two years of shady operations, the Capital Market Development Mutual Fund’s (CMDMF) website has started its test run in a bid to change its image, the chief executive of Iran Financial Center (IFC) said on Tuesday. The website was created to show the fund’s performance.

The mutual fund was initially created by the Securities and Exchange Organization to increase market liquidity by investing and offering market for stocks in the Tehran Stock Exchange. The fund was managed by Amin Investment Bank since its inception in February 2013 until Jan. 5, 2015, when the fund’s management was given to IFC, an educational organization.

The fund has been criticized for shady investment practices, using inside information and market manipulation. “Its investments are based on orders from the SEO,” sources close to the matter have told Financial Tribune, but did not want to be identified. “Now, it is trying to shake off that image.”

Stockholders have protested against insider trading and market manipulation, especially as the market downturn has left them with huge losses. Shares on the TSE have dropped 18.1 percent in the past year. They have lost a third of their value since their peak in January 2014. Recently, stockholders gathered in front of the TSE’s building protesting against insider trading and the regulator’s leniency on “corruption and [special treatment of] special traders,” Tabnak reported.

“To increase the transparency of CMDMF’s performance, a pilot website was created to give information about the fund’s performance,” Ali Taghavi told Securities and Exchange News Agency.

 The information published on the fund’s website is based on the same reporting rules applied to other mutual funds, said the chief executive. Consequently the website will publish the fund’s net asset value, portfolio makeup among others.

 The current market value of the fund’s holdings stands at 6.09 trillion rials ($184.2 million at market exchange rate), according to Taghavi, though this was not put on the fund’s website, unlike other mutual funds. The fund’s NAV was 859,765 rials by Tuesday’s close.

Two new institutional investors have joined the first 24 investors in the fund, since its management was taken over by IFC.