Sanctions Easing Boosts Foreigners in Iran Stock Market 10-Fold

  • Bourse CEO: 500 trading codes given to overseas investors
  • Exchange, central bank to introduce new debt instruments

Iranian stocks have seen a surge in trading by foreign investors since the implementation of a nuclear deal eased international sanctions against the country, the chief executive officer of the Tehran Stock Exchange said.

The value of transactions by overseas investors, mostly European, increased to about 500 billion rials ($16.6 million) in the 10 days through Jan. 26, according to Hassan Ghalibaf Asl. That compares with about 50 billion rials in the 10 days prior to the nuclear deal implementation on Jan. 16.

“It hasn’t been very long since implementation, but its impact in this short period of time has been very positive” Ghalibaf Asl said in an interview at his office in Tehran. “It’s also psychological. It has generated optimism about the future because the picture is clearer for investors.”

The benchmark TEDPIX Index of stocks has rallied about 15 percent since the implementation of the nuclear deal, which lifts or suspends many sanctions on Iran’s economy in exchange for limits on the nation’s atomic activities. Inflows to the country may reach as much as $1 billion after six to eight months, according to ACL Assets Management, an investment firm that focuses on Iran.

About 500 trading codes have been issued to foreigners by Iranian authorities, Ghalibaf Asl said, enabling them to actively buy and sell shares. Around 100 of the codes belong to institutional investors and 400 to individual investors, he said.

Meanwhile the nation’s debt market has “good potential for development,” according to Ghalibaf Asl. The bourse is planning to introduce new debt instruments with the help of the Central Bank of Iran that would help foreign investors manage the risk of their equity investments, he said.

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