The impact of new US sanctions on the economy and the capital market is the talk of town. Experts and market observers say the restrictions have no significant effects on stocks.
Analysts and stakeholders believe the economy has been dealing with sanctions for close to four decades and the term “new sanctions taking effect on November 4” is something very close to a misnomer, Securities & Exchange News Agency reported.
Behrooz Khodarahmi, a capital market expert believes that interaction with European countries has neutralized the risks caused by US sanctions to a considerable extent. "The media should inform the people of the advantages of the capital market because all the components of the bourse indicate the profitability of this market," he said.
Fardin Aghabozorgi, head of Bank Day Brokerage says a political event awaits the country on Nov. 4 but it should be accepted that sanctions are not a new phenomenon and we’ve been dealing with sanctions of different degrees for decades. The equity market has witnessed 100% growth since the beginning of the year (March) so far but it has still room to grow compared to other parallel markets, he said.
Mehdi Asima, international financial manager at Sepehr Investment Bank, noted that currently most players in the market are exercising caution because of past experience. "Investors have taken into consideration part of corporate sales that could be affected by sanctions and the impact on different shares," he said. "Therefore, the new sanctions will not disturb the trend of basic indices and shares because investors will proceed by assessing the P/E trend of shares."
According to Mostafa Safari, managing director of Sarmayeh Iranian Asset Management Company, as the capital market is normally affected by long term economic trends, it seems that the sanctions have already had their effect in the past three months and there will not be any considerable shock in the near future. At their fastest pace, the new sanctions could show their effects after one year.
"Political shock turns into economic shock when business earnings are in real danger. It seems the sanctions will produce less significant effects than most people imagine because Iran has good relations with its neighbors. Moreover, the Europeans are not following the US,” he said.
"Iran has been dealing with sanctions for years. No other country in the world has dealt with sanctions as long as Iran; our country is the most resilient nation against sanctions. Hence, we know the way to cope with and manage ways to fight the sanctions. Although the sanctions will have short-term effects, it would be incorrect to say that the capital market will face problems in the long- run."
Asgari Marani, a capital market analyst opined that in the present situation investors would do better to enter the capital market with a long-term vision and take all systematic risks into account. The impact of fluctuations in the currency market and the sanctions were evident during the first half of the year (March 21-Sept. 22).
Stabilizing the major part of forex policies during recent weeks and Iran’s interaction with Europe for economic cooperation have decreased systematic risks, he noted, adding that the sanctions were imposed on Iran in the past and corporate managers know how to bypass the unjust restrictions. "However, one must note that the effects of sanctions vary from one industry to another."
Abolfazl Shahrabadi, Finance deputy at Parsian Lotus Investment Bank said the capital market has been immunized against sanctions but the risks are stronger in periods such as present conditions. "The sanctions might make things difficult for the capital market for a while but the effects will be rather short-lived. The market indeed has experience of past sanctions."
