Close to 3.58 million trading codes were issued for new investors in the share market since the beginning of the current fiscal year (March 20) up until July end.
This puts the total number to 15.25 million, Fars News Agency reported citing data from Central Securities Depository of Iran (CSDI).
The figure is staggering given that on average 600,000 codes were issued annually in the past eight years. According to CSDI data, in the entire past fiscal year (March 2019-20) 822,000 trading codes were issued.
Upsurge in investors in the relatively short period is largely due to the growing traction of the bourse and high returns on investments in the unusually swelling market that has its own protagonists and opponents.
The boom is seen by many as both cause and effect of the unusual rise in the number of investors. Higher number of investors joining the market means more liquidity flows that is further pushing up market indicators.
Investors in swarms have been lining up in recent months tempted by the lucrative gains and reassurances by the government about the safety and prospects of putting money in shares.
Investor interest is whetted by major government plans, such as a divestment scheme ceding government shares via exchange-traded funds, and a plan to remove the ban on trading the so-called ‘Justice Shares’.
Justice Shares are shares of big government-owned companies given to the six lowest income deciles a decade ago. The shares were given free and were not tradable until May.
Close to 49 million Iranians own the shares and need trading codes to sell them in the stock market. The CSDI says it plans to issue trading codes for all owners of such shares to put the total trading codes to around 65 million.
Among the Top
This means almost 78% of the population will have trading codes, making Iran among the top in the world in terms of percentage of stock ownership.
As per a recent Gallup poll, 55% of Americans reported that they own stocks, based on polls conducted in March and April. This is identical to the average 55% recorded in 2019 and similar to the average of 54% Gallup measured since 2010.
ETF-Based Divestment
The Tehran government launched divesture schemes in May. The schemes involves offering shares in state-companies via ETFs in three phases. The first phase began in May with shares in three banks and two insurance companies.
A total of 58.86 trillion rials ($255 million) worth of ETF units were bought by 3.5 million people, the Ministry of Economy said.
The government has planned the second phase in September with shares in four refineries via the second ETF.
To attract more people to the bourse, the stock exchange regulator eased conditions for issuing trading codes for new investors.
CSDI has made it possible to issue codes without the physical presence of applicants, allowing investors to apply via electronic platforms.
After the unprecedented 200% gain in the last fiscal year (March 2019-20), the Tehran Stock Exchange rallied higher from the beginning of the year gaining 280%.
