Tehran Stock Exchange is in the “late stages” of compiling a new index, ranking companies according to their transparency and governance structures, its CEO said on Wednesday.
It is a rare move for a stock exchange and one intended to boost confidence among foreign investors in Iranian capital markets, according to the UAE-based weekly business magazine Arabian Business.
Iran is ramping up efforts to attract foreign investment now that restrictive sanctions have been lifted.
Speaking during a conference in Muscat this week, Tehran Stock Exchange CEO Hassan Qalibaf-Asl said the Iranian capital market was “one of the most liquid” in the region but mainly comprises local investors at present.
“It would benefit from increased contributions from foreign investors,” he said.
Behzad Golkar, CEO of Iran’s Sina Financial and Investment Holding, one of the biggest conglomerates in the country, reiterated Qalibaf-Asl’s calls.
“The Iranian capital market needs fresh blood,” he said.
However, even if sanctions have not applied to them, foreign investors have historically been shy of investing in Iran and Qalibaf-Asl said greater efforts were needed to secure their trust.
“Transparency is actually very strong in Iranian capital markets,” he said. “But based on [the notion that] it is a company’s own responsibility to ensure this, [Tehran Stock Exchange] has started a new project–not yet finalized but in the late stages–to rate listed companies, according to the corporate governance and transparency structures they have in place.
“We will then publish a new index based on this ranking. We think this will be important in increasing foreign investment in Iran,” he said.
Qalibaf-Asl noted that the exchange also plans to create a market for foreign exchange-dominated securities–not shares–to further incentivize foreign investment.
