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8.3 Stock market
Iran plans $19bn stock market boost with release of “Justice Shares”
Doubling in value
Tehran Stock Exchange booming into stratosphere. And that’s not too much of an exaggeration
Stock market trading permission has been granted for “Justice Shares” held by low-income Iranian families and worth up to Iranian rial (IRR) 3,000 trillion ($18.75bn at the free market rate), the head of the Iranian Privatization Organization has said.
Alireza Saleh said Iran’s stock market stood to grow exponentially following the permission issued in a decree by Iranian Supreme Leader Ayatollah Ali Khamenei.
Dividend-paying Justice Shares in state entities and companies owned by 49mn Iranians are now eligible for trading on bourses including the Tehran Stock Exchange (TSE) and the Iran Fara Bourse. The move to enable the listing of the equity follows the emergence of a bull market on the TSE. Its leading index, the TEDPIX, reached 878,122.7 points on April 29, up 3.80% m/m.
The Justice Shares were issued in 2006 under a policy of former president Mahmoud Ahmadinejad on the basis of Article 44 of the Iranian Constitution on assisting economic privatisation efforts and supporting low-income deciles of the country’s population.
A first round of sales will see Justice Shares in 49 companies placed on sale on the TSE and other capital markets in coming weeks.
Some analysts in Tehran are forecasting a doubling in value of the overall worth of held Justice Shares should there be enough buyers.
Tehran’s Financial Tribune quoted Saleh as saying holders of the shares have one month to decide on future ownership. He referred shareholders to special electronic platforms to determine share ownership status. More than 50,000 applicants had registered by noon, local time, on April 29, Saleh added.
Khamenei said in a statement that “holders of Justice Shares are allowed to choose the direct ownership of the shares in terms of venture capital firms within a specified time frame and to play their managerial role in proportioning”.
He added: “In relation to remaining stocks in provincial investment companies, the High Council of the Stock Exchange is obliged to encourage the owners of the stocks in the mentioned companies and to provide the grounds for the entry of those companies in the stock exchange as soon as possible through the relevant bases.”
You might say that Tehran Stock Exchange (TSE) is booming into the stratosphere. Its main index, the TEDPIX, soared 28,543 points, or 3.71% d/d, to hit 798,105 on April 26, the second trading day of the Iranian working week. The gain came on top a general skyrocketing of stock market indices in Iran of late, building on previous big momentum seen in the past couple of years. In fact growth since 2017 has doubled the market’s value in dollar terms, and it’s taken place against the backdrop of the run on the Iranian rial (IRR) in 2018 and 2019 triggered by the return of heavy US sanctions targeted at swathes of Iran’s economy. Iranians have looked high and low for secure places to invest their money and the stock market has grown in
34 IRAN Country Report May 2020 www.intellinews.com
