The Securities and Exchange Organization extended the underwriting of Ganjineh Ayandeh Roshan Exchange-Traded Fund for three days, Bourse Press reported on Tuesday, as the sale of the fund’s units was poor.
The investment fund’s underwriting will end next Monday.
ETFs are portfolios of stocks that track a market – Ganjineh will deposit 90 percent of its money in banks and invest the rest in other fixed-income securities. Since they involve low management costs and trade on exchanges, ETFs can give foreign investors a cheap, convenient route into frontier markets.
Sanctions imposed on Iran over its nuclear energy program have blocked most flows of foreign money into the Iranian markets. This has left Tehran’s bourse with a capitalization of $84.4 billion, making it an unexploited opportunity for global portfolio investors. But for now international sanctions have hindered the money transfer process and deterred institutional funds.
During its lengthy negotiations with the six world powers (the US, Britain, France, Germany, Russia and China) to resolve the nuclear dispute, Iran reached an interim deal with the other side in late 2013. The agreement was extended twice and now both sides hope they would reach a final deal by the self-imposed June 30 deadline, an accord that can end all nuclear-related sanctions.
As negotiators are hammering out a deal, the SEO is helping expand its portfolio of ETFs to offer investors new and easy ways of investment in the Iranian financial markets. There are currently seven ETFs listed on Iran Fara Bourse or the over-the-counter market. There are an additional three ETFs offered on Tehran Stock Exchange, including Turquoise TSE 30 Iran Index ETF, which mimics the TSE’s 30 biggest blue chips and was specially pitched at foreign investors.
The new ETF started to offer its 10,000-rial investment units for underwriting on June 6. The underwriting period was set to be three days.
Ganjineh Ayandeh Roshan is the second fixed-income ETF to be offered in Iran Fara Bourse. The fund’s units are being sold through the market’s brokerage network.
According to the report, the minimum compounded daily interest of the fund is set at 23 percent, though the fund’s managers are trying to raise the returns to 26.5 percent.
A minimum of 10 and a maximum of 49 million investment units can be purchased by each investor. Most of the units have apparently been bid for. Secondary trading of the units will start in Iran Fara Bourse’s new financial instruments market.
The $15-million investment fund is managed by Ayandeh Bank’s brokerage, and Arman Investment Bank is offering the market for it.
