Economy, Business And Markets

Russian Interest in Iran’s Financial Markets

Russian Interest in  Iran’s Financial Markets
Russian Interest in  Iran’s Financial Markets

The chief executive officer of the leading Russian investment bank, Renaissance Capital, visited the Tehran Stock Exchange’s trading floor on Monday for business talks, SENA reported.   

RenCap is looking for avenues to invest in Iran’s financial markets, especially in its equity market.

“The lifting of sanctions will multiply TSE’s turnover,” said Igor Vayn, adding that the TSE “will then see an influx of foreign companies and investors.”

Vayn said that with the easing of sanctions against Iran, Tehran’s stock market could compete with major regional exchanges, such as Moscow Exchange, Borsa Istanbul and Saudi Arabia’s Tadawul.

The RenCap CEO described TSE’s trading floor as vibrant and said that the equal access of traders to price quotes on stocks and other financial tools on the trading floor is one of the equity market’s strong suits.

RenCap is seeking to gather first-hand information on Iran’s financial markets, its investment climate, and the level of the market’s interest for foreign investors.

Renaissance Capital operates in high-opportunity emerging markets. It is a top-ranked investment bank for mergers and acquisitions, securities sales and trading in equity and debt capital markets.

The Russian firm focuses exclusively on markets in Russia, the Commonwealth of Independent States and the frontier markets of Middle East, North Africa and sub-Saharan Africa.

“Latest statistics show that Iran is one of the largest, if not the first, economy in the Middle East with a gross domestic product (GDP) of $987 billion, while Saudi Arabia’s GDP stands at $928 billion, Egypt’s at $551 billion, UAE’s at $270 billion, and Iraq’s at $249 billion,” said Vayn to reporters.

Iran has recently seen some of the sanctions imposed by the West over its nuclear program eased. However, the restrictions resulted by sanctions have practically shut off Iran’s market to outside businesses, as the sanctions encompass most industries including petroleum, aviation, autos as well as banking.

During the recent Iran-P5+1 talks, US and European negotiators argued that without a swift nuclear deal, Iran’s economy will be even harder hit. However, Iranian officials are making fiscal and financial policies in case sanctions remain in place, even though they express hope that the restrictions will be removed.

The P5+1 signed an interim deal with Iran last November, agreeing to a limited ease of international sanctions in exchange for Iran halting some aspects of its nuclear energy program.

Market reaction to this news has been mixed so far. Some investors found hope in it while most curbed their enthusiasm citing the gap between the negotiating parties over Iran’s uranium enrichment capacity and the timing for lifting of sanctions as reasons for doubt.

The next round of talks is expected to begin this week in New York in the hope of reaching a final nuclear agreement.

Many foreign companies hope a deal will be struck soon, so they can enter the Iranian market, which is considered one of the largest untapped markets worldwide.