Page 35 - IRANRptNov18

Tehran Stock Exchange hits high as ordinary investors struggle to find investment options amid economic difficulties
"Since the Iranian government or NIOC cannot get directly involved in negotiations with smugglers, this will allow a private middle-man ... to go and find buyers and arrange for logistics that could possibly be invisible to the monitoring systems," Nasseri reportedly said.
The move to re-establish the exchange was in line with "resistance economy" policies, state-controlled National Iranian Oil Co (NIOC) said. Resurrecting the trading option should diversify Iran's oil sales and bring the domestic private sector into the trade, it added.
NIOC is this week due to disclose full details, including the mechanism of sale, base price, delivery and payment terms on the first attempted transaction on the reopened bourse.
Private parties who buy through the bourse must attempt to resell the oil to international traders. NIOC typically sells its crude directly to foreign refineries. However, many have already begun to retreat further purchases ahead of the US sanctions.
NIOC says the oil on offer would be eligible for resales to any destination, except for Israel. It will set the base price for the crude by examining the prices it has received for its international consignments. Buyers are obligated to pay 80% in foreign currency and 20% in the Iranian rial.
The rial settlement based on an official rate will be in cash and before cargo delivery. Settlement of the non-rial portion will be on a credit basis, NIOC said. Iran holds the fourth largest oil reserves in the world and is OPEC’s third biggest exporter of crude.
The Tehran Stock Exchange’s (TSE’s) main index, the Tedpix, registered a record high during September 10 trading, with 559bn shares worth IRR8.433tn ($200mn) traded, according to the TSE’s website.
The dollar and other hard currencies have moved beyond the reach of ordinary investors amid the economic turmoil brought about by the snapback of heavy US sanctions. This has meant the diversion of substantial investment capital to the TSE, seen as one of the last resorts for liquidity in search of a potentially profitable home.
Some 205,608 bourse deals took place on September 10. The main index rose to 1,894 while the secondary market hit 5,308.
The IFX, the leading index of Iran's over-the-counter (OTC) market known as the Iran Fara Bourse (IFB), also hit a new record on September 10. It rose 27 points to 1,642, as 814mn securities worth IRR4.313tn ($102.6mn) were traded.
Economic pressure fced by Iran has brought about the collapse of the Iranian rial (IRR) and moves by the government to cool speculative buying by channeling hard currencies into “luxury commodities” territory. The country is again relying far more on its ‘resistance economy’ model whereby those basic goods that can be made domestically are whenever possible. That reduces the amount of foreign exchange that leaves the country through payments for imports.
35 IRAN Country Report November 2018 www.intellinews.com