A delegation of 10 fund managers from top investment companies in the United Kingdom, Switzerland, France and Russia concluded their three-day visit to Iran on Wednesday after holding a meeting with Iranian economist and advisor Abolqasem Hashemi in Boursiran's office in Tehran, on condition of anonymity.
The visit, aimed at identifying the leading Iranian industries, was organized by the Swiss-based ACL Asset Management Company in collaboration with Renaissance Capital and Boursiran Public Securities Brokerage Company–Iran's largest asset management company and a subsidiary of Iran Industries Investment Company. ACL is expected to manage the assets heading toward Iran once the sanctions imposed by the West against Iran's nuclear program are lifted.
Expressing his astonishment at "the best corporate access" in Tehran, one of the fund managers said: "The overall impression was super positive, some sectors more than others. We are bullish on consumer and domestic demand-related industries,” he added.
Another representative, introducing his company as pioneers in emerging markets and frontier markets, said: “We have been in Russian a long time before Goldman Sachs and Merrill Lynch were there. We have been in Nigeria almost years before any other global investment banks, and we hope to be the first in Iran before anybody else.”
He said he was impressed by the operations and efficiency of the factories he visited, adding: “Iran is the most interesting emerging market on earth, with massive investment potential. The young people are educated and very welcoming."
"This is my first time in Iran and this place is much more liberal than perceived from the outside," said another member of the delegation. “I see key differences between Iran and other Persian Gulf countries," he added.
> Surveying Challenges
Restrictions on conducting transactions with Iranian banks as a result of western sanctions and the banks' expulsion from the SWIFT system were also highlighted as the most crucial challenge for foreign investors.
SWIFT, or Society for Worldwide Interbank Financial Telecommunication, has been described as the glue of the global banking system, handling daily payments estimated at more than $6 trillion. SWIFT was ordered by the European Union to disconnect the Iranian banks from its network in March 2012.
The fund managers also touched upon the challenges surrounding Iran's economy including banking interest rates and the Iranian government's fiscal policies for the coming years.
A variety of factors are involved in setting the interest rates, said Hashemi. "For example, it is not reasonable to lower the interest rates without considering the foreign exchange market," he added.
He said the government is expected to pursue a contractionary monetary policy in the coming years to tackle inflation.
"The government will not stop fighting inflation whether or not a final nuclear accord is reached with the P5+1 (the five permanent members of the UN Security Council plus Germany)," he said
"Mismatch between skills and jobs in the labor market is a prevailing issue in most developing countries. Improving the industrial sector is a practical remedy.
> Lucrative Sectors
Asked about the most lucrative sectors for investment over the next three to five years, Hashemi said investment in the petrochemical, oil and gas sectors would be economically viable considering the sectors' competitive advantages and high growth rate. He also referred to the steel sector as an interesting option for investment.
As part of their three-day trip to Iran, the fund managers visited a number of leading Iranian companies listed at Tehran Stock Exchange, including Persian Gulf Petrochemical Industry Company, Mobile Telecommunications Company of Iran, Daroupakhsh Holding Company, Iran Khodro and Golgohar Mining and Industrial Company.
"They have committed to invest €300 million on the listed companies with the highest market cap after the western sanctions against Iran are lifted," Reza Soltanzadeh, head of Iran Industries Investment Company and member of Foreign Investment Committee at Securities and Exchange Organization, told the Financial Tribune in a telephone conversation.
"Investors who visited TSE represent some of the largest European investment companies, managing a portfolio worth up to $1,500 billion," said head of TSE, Hassan Qalibaf.
"Diversification was indicated by the fund managers as one of the most important advantages of Iran's capital market in comparison with other regional markets," he added.
ACL's Chairman Barthelemy Helg also held a meeting with head of the Securities and Exchange Organization, Mohammd Fetanat, and head of Central Securities Depository of Iran Hamed Soltaninejad to discuss obstacles to foreign direct investment in Iran as well as post-trade operations at the equity market.
