European and Asian investments are moving fast into Iran, leaving the US in the dust as some sanctions continue to keep American money out despite keen interest, CNBC quoted an investor as saying.
Broad western sanctions against Iran were lifted in January this year after the government agreed to limit its nuclear program, spurring investment into the country with Airbus announcing a large $25 billion order of 118 airplanes while automaker Peugeot returned to the country with a €400 million ($435 million) deal.
Japan and Singapore have also signed bilateral trade deals with Iran recently.
The US, however, is “nowhere in terms of trade” due to the remaining sanctions, says David Grayson, chief executive of New York-based brokerage Auerbach Grayson.
“Basically, the Iranians can sell carpets, rugs and caviar to the US but beyond that, the US is being left at the station and the train is pulling out.”
Grayson, who visited Iran as a tourist last May, said he has received interest from American clients to invest in Tehran Stock Exchange but sanctions aside, there is no recognized custodial service to hold securities on behalf of international investors yet.
Iran offers potential to investors despite recent economic wobbles and a far from clement political backdrop in the region. The country has a population of 80 million with a median age of approximately 29 years and a tertiary education enrollment rate that is higher than many developing nations.
The exchange has a market capitalization of $100 billion and processes $100 million worth of trades daily.
Gains by reformist candidates in last weekend’s Iranian elections may pave the way for changes to economic policies that will boost foreign investment and trade with the West.
However, “there will still likely not be action from the world’s largest economy for months until the new president takes office after the election in November”, said Grayson.
