The Securities and Exchange Organization (SEO) is gearing up to facilitate the process of attracting foreign investment in a bid to bolster the capital market, Ali Salehabadi, head of the SEO said at the inauguration ceremony of the first international exhibition of exchanges, banks, insurance, capital markets and privatization (EBEX 2014) held on the Persian Gulf island of Kish.
"As direct foreign investment is a top priority for the SEO, we have started tackling the banking challenges and limitations."
Salehabadi also added that as soon as the banking restrictions are lifted, future foreign investors would be able to conveniently pour their money into the country's capital market.
Due to the financial sanctions imposed by Western countries against Iran's nuclear energy program, money transferring to/from other countries cannot be done by Iranian banks.
By strengthening the electronic infrastructure of the equity market, foreign investors would be able to engage in Iran's equity market, irrespective of their geographical positioning.
Salehabadi added that the exchanges structure in Iran aims to be in compliance with international regulations, and that relevant plans are already underway.
"The process of absorbing foreign portfolio managers and foreign investment flows will be transparent in the near future, which will pave the way for a more dynamic and international equity market, Salehabadi said.
He stressed that providing cash flow to the industries in the capital market is a top priority for the SEO, adding that the capital market should be reinvigorated as it is poised to play a key role in the overall economy.
The SEO is collaborating in full with parliament and the administration to set next year's budget (March 21, 2015). The most crucial target of this comprehensive collaboration is to make industries throughout the country more profitable.
There are around 500 companies listed at the Tehran Stock Exchange (TSE) from close to 40 different industries, creating the most diversified market throughout the Middle East.
More than 7.6 million people are officially registered to trade in the stock market. The figure does not include the so-called 'justice shares' holders, which could push the number of active people to 50 million.
Salehabadi also announced that deepening and strengthening the secondary market is a long term strategy of the SEO.
Reinforcing the capital market infrastructures, upgrading the knowledge and culture of traders, developing the trading tools, and boosting stock-future-trading are among the SEO's priorities to help give a boost to the capital market.
The SEO head also said that various trading tools are available for both domestic and foreign investors, including rental bonds.
Moreover, the total market value at the TSE and over-the-counter (OTC) stands at 4,000 trillion rials. Meanwhile, the Iran Mercantile Exchange (IME) as well as the country's Energy Exchange have a significant share in the market cap and the position of the exchanges makes them advantageous platforms for all investors to enjoy the market which has great future potential.
The SEO is also planning to develop international activities at the IME, with the aim of turning the IME's export trading hall into a reference in the region and even in the world for setting prices of commodities.
Salehabadi stressed that the establishment of an export trading hall on Kish Island could help the IME become a regional hub in commodity price discovery and also help develop the capital market.
The EBEX 2014 is being held alongside the 6th Invest Show, which introduces investment opportunities in Iran. Iran’s financial sector and other participants are present at EBEX 2014, along with brokerage and insurance companies.
More than 150 Iranian and 15 foreign exhibitors from the European Union have attended the event, which was inaugurated on Tuesday.
