Page 37 - bne IntelliNews Country Report: Iran Dec17

Mofid Securities, one of Iran’s largest independent brokerage and financial advisory firms, has announced it has entered into a new partnership agreement with Italy’s Azimut Group, according to a press release released by the Tehran firm on October 9. Azimut becomes the first globally recognised financial institution to buy a significant equity stake in an Iranian financial firm. Azimut is to buy a 20% stake in Mofid Securities for an undisclosed sum. Through AZ International Holdings S.A., Azimut will purchase its stake from Mofid Entekhab while Mofid holding group will remain the majority shareholder. Azimut and Mofid will also participate pro rata in a capital increase to finance a business plan to develop a range of investment strategies in local asset classes. The two firms also intend to build a locally trained sales force to provide financial advisory and wealth management services and launch offshore funds for foreign investors. “Today we are making a historical first step for a global player entering the Iranian financial market. We see the Group pioneering untapped opportunities of a frontier market which has, in fact, the full credentials of a large advanced emerging market,” Sergio Albarelli, CEO of Azimut Holding, said in the press release. Mofid Entekhab currently manages $89mn across six mutual funds and managed accounts, and holds an 8% market share of the country’s equity market.
Iran’s Export Guarantee Fund (EGFI) signed a memorandum with Poland’s KUKE Grupa PFR on the sidelines of the Berne Union conference being held in Serbia, the Financial Tribune reported on October 5. The agreement signed between the two parties will allow Polish companies to export their products to Iran with the backing of the Warsaw government, and facilitate further bilateral trade. According to EGFI, both sides "came to an agreement in the fields of banking and insurance cooperation as well as on the exchange of trade rating information and other fields that facilitate trade". Neither party has said how much it intends to lend to businesses or when the deal would commence.
8.2 Central Bank policy
Iranian regulators seem likely to force banks to lower interest rates in coming months in line with the re-elected Rouhani administration’s plan to switch the banking system from savings-based to loan-friendly.
Pressure for such a move is thought to have mounted following a meeting of Central Bank of Iran (CBI), Money and Credit Council (MCC), government and private bank representatives.
At the meeting, a proposal to lower interest rates to 12% and 13% for savers came up, the Financial Tribune reported on June 20. Iranian interest rates currently range from 15-18% for savings accounts, with loans locked at 20% and above. Inflation currently stands at around 10%, meaning the real rate of interest for savers is 5-8%.
No comment was made by the commercial banks that attended the meeting, but the wide consensus is that they will relatively soon face a move from the CBI and MCC to make them cut their rates.
As it is, the banks are struggling with the current rates forced on them by the CBI as their business plans were previously based on high-interest savings accounts.
37 IRAN Country Report November 2017 www.intellinews.com