A series of initiatives by the leading Iranian financial group, the Agah Group, and the London-based boutique investment bank, First Frontier Capital (FFCL), is demonstrating the growing international enthusiasm for investing in Iran.
They are working together to set up a sanctions-compliant investment opportunity. This will enable international investors to become involved in the equity market even before the boost that is expected to come from a final deal to remove economic sanctions.
And the Agah Group is to host a visit by a group of European institutional investors put together by FFCL – this will be the first trip of its kind since the recent framework nuclear deal between Iran and the major western powers.
“The visit and the positive response that we have had to our plans for the investment opportunity send an important signal that Iran is now ready for business; and that international investors are keen to participate in what is arguably the world’s final untapped developing market,” says Nicholas Banszky, First Frontier’s chairman.
Once the they have seen what is actually happening in the country, Omid Q. Rose, the Agah Group’s chief marketing and strategy officer (CMO) believes investors will be keen to establish a long and fruitful involvement in Iran. “This is something we are very committed to and we see it as a huge opportunity,” he says.
The Agah Group and FFCL, which are also preparing to publish research on quoted Iranian companies, have devoted considerable time and resources into creating a way in which Europeans can invest even while sanctions remain in place.
They are convinced that their investment vehicle, which effectively excludes stocks that have had sanctions imposed on them by western governments, is 100 per cent legal under European Union law. Among the companies being considered are Iran Khodro Industrial Group, Mellat Bank and National Iranian Copper Industries.
According to Rose, “Iran’s stock market is thriving and the end of sanctions will give it a further boost. It already has market capitalisation of more than $100 billion, there are at least 500 listed companies and daily trading of $80-100 million.
“The strongest evidence of its potential is that the main index is trading at about 5.5 times earnings, compared with 11.2 for the MSCI Frontier Markets Index.”
Rose and Banszky believe that, once the visiting group has met the senior managers of the Iranian during their trip and seen what is actually happening on the ground, they will be convinced by the underlying strength of the economy, the government’s commitment to modernisation and the potential for further growth.
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