Page 7 - Iran OUTLOOK 2024

year.
According to the recent findings, 33.3% of Iranians expressed a preference for investing in housing and real estate, despite the ongoing recession in this market. However, this percentage has slightly decreased compared to two years ago, when 37% of respondents indicated interest in real estate investments during March 2021-22.
The study also revealed a notable shift in preferences toward gold-related investments. The percentage of Iranians opting to buy and sell gold and gold coins in the open market rose from 10% in March 2021-22 to 20% in the recent survey. Gold's appeal is attributed to factors such as higher returns compared to inflation, ease of buying and selling in comparison to real estate and foreign currencies such as dollars, and the potential for investment with minimal capital.
Interestingly, the desire to invest in jobs and entrepreneurship has experienced a decline, with 15% of respondents expressing interest in this category compared with 23% in March 2021-22. The report suggested that Iranians have shifted focus from entrepreneurship to asset-based investments due to significant growth in the assets market, macroeconomic instability and perceived risks associated with employment.
Among other investment options, 15% of respondents favoured saving in the bank, 2.7% expressed interest in the car market, 2.7% intended to invest in buying and selling USD and currency markets, 1.3% preferred cryptocurrency investments and another 1.3% wanted to invest in the stock market.
Eroded trust in stock market
The Iranian stock market faces two main obstacles, namely a lack of trust and insufficient profitability. Insider trading is rife in the Tehran Stock Exchange (TSE), the main stock market in Iran. There are few laws in place to prevent this, but they are rarely enforced. Government officials and other powerful individuals often have access to inside information about companies, which they use to profit from the stock market. The TSE is relatively small and illiquid, which makes it easier for insiders to manipulate the market. For example, insiders can easily buy up large blocks of shares in a company before releasing positive news about the company, which will drive up the price of the shares. The corrupt practices undermine investor confidence, make it difficult for companies to raise capital, and lead to price distortions in the market. Corruption also harms ordinary investors, who are often the victims of insider trading.
The ISPA survey also highlighted gender and age-related disparities in investment preferences. More women than men expressed a desire to buy gold and gold coins or invest in a bank with savings, while a higher percentage of men (39.9%) leaned towards land and housing investments compared to women (32.1%).
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