Attracting Foreign Investment to Iran

Market News

*  Invited by the Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA), PricewaterhouseCoopers Company’s senior officials gathered with senior Iranian officials, discussing how to attract more foreign investment to Iran. Mentioning the establishment of an office to attract foreign investment by this chamber, the head of TCCIMA talked about their attempts to identify and eliminate impediments ahead of foreigners’ presence and participation in the country. Mr. Ronnberg, a senior PwC official, then, stressed on enhancing transparency in companies’ Iranian’s operations along with preparing their IFRS-based financial statements as the major steps to be taken. Focusing on building trust between both Iranian and foreign companies, he also asked Iranian entities to fully understand and implement international business rules and regulations. Referring to the steps taken so far in Iran’s capital market, including attempts to establish credit rating agencies, reforming reporting methods, introducing diversified instruments and deepening the debt market, Mr. Qalibaf-e Asl, the CEO of Tehran Stock Exchange also stated taken measures to list Iranian companies on global exchanges and insisted on turning to international markets for finance, as the best way that can bring the current high finance cost down. As another guest, the CEO of Bank Middle East also explained the way taken so far to open a branch in Germany and concentrated on the issue of corporate governance, which seems to be neglected in the country. Mr. Aqili also talked about the importance of internal auditing, anti-money laundering rules and risk management in banks, in addition to demanding Iranian banks to pay more attention to implementing internationally accepted standards such as Basel Committee’s, which act as pre-requisites to link Iranian banks with their foreign counterparts.

Banks Ratings to be Announced

Market News

* The Governor of the Central Bank of Iran announced that Iranian banks’ ratings will be publicly announced on 22 October 2017; it will be done by Iran Credit Scoring Company, affiliated with both the CBI and the Ministry of Economic Affairs and Finance. The recent failure of uncertified credit institutes in meeting the public needs seems to have encouraged the CBI to release such information. There is, nevertheless, an insider rating done by the CBI itself whose results will remain confidential and will act as a criterion for rewarding or punishing banks.

Central Bank of Iran’s Attempts Continue

Market News

Following the visit paid by the Governor of the Central Bank of Iran accompanied by a delegation made up Iranian state and private banks to China, a finance deal, worth $ 10 bn, was signed between with a Chinese state-owned investment company, CITIC Trust, to fund development projects in Iran, mostly in areas like water management, energy, environment and transportation projects; the 10-12 year construction and repayment periods will be set for each projects proportionate to their size and requirements. The funds will be provided in euro and yuan. Furthermore, an MoU was also signed with the Development Bank of China, worth $ 15bn, on providing funds for construction projects; the expansion of correspondent banking relations between the Iranian lenders and their Chinese counterparts were also another point of discussion. The Iranian delegation is also set to gather with officials at the China Banking Regulatory Commission to discuss banking problems and impediments ahead linking Iranian businesses with their international counterparts.

Hi Web Went Public

Market News

* In today’s session, 10% of Dade Gostar-e Asr-e Novin (AKA as Hi Web) Company’s shares, i.e.  were offered for the first time to investors via the book building method with each share price ranging from IRR 2,715 to IRR 2,850; each investor, individual and institutional, is allowed to purchase 5000 shares. With IRR 4,000 bn in capital, the company has estimated to make IRR 4,060 bn revenue and IRR 1,540 bn net profit, mostly due to the 34% rise in revenue and 14% decline in COGS; it is so while it has made IRR 7,000 bn revenue and IRR 650 bn net profit with IRR 2,000 bn in capital in the previous year. Over the first quarter, the company has realized a 72% growth in its revenue with no increase in COGS over the first quarter compared to the same period last year.

Chodan Went Public

Market News

* Today, 80,000,000 shares, equal to 10%, of Chodansazan Industrial Company were offered, as the 512^th listed company on the Tehran Stock Exchange, via the book building method to investors for the first time with its price ranging from IRR 1,773 to IRR 1,950; each investor was allowed to order up to 2000 shares. With IRR 800 bn in capital, the company has earned IRR 614 bn over 2016/17 out of sales resulting in IRR 173 bn net profit; it has also estimated to make IRR 784 bn out of sales and IRR 201 bn net profit in the current year, 18% of the former and 15% of the latter has been realized in the first quarter of the current year. The company has been listed in “Metal Products” sector.

Linking Iran’s Capital Market with the World

Market News

* Following the signing of an agreement between Iran Financial Center (IFC) and Greece’s Inforex, IFC will provide the Greek company with data on listed companies on Iranian exchanges for 2 years to be accessed by foreigners interested in investing in Iran’s capital market through its platforms. Referring to the consideration of legal and technical issues of the deal in three rounds of negotiations over the past two months, both parties have expressed hopes that the said deal results in more development of Iran’s capital market. In the first phase, countries like Greece, Cyprus, Turkey, Qatar and Balkan will be provided with such information.

Iran’s Banking Relations on Amends

Market News

• Following an Iranian delegation visiting Seoul, a memorandum of understanding was signed between the head of Iran’s Association of Private Banks and the Chairman of Korea Federation of Banks, which is aimed at expanding non-dollar transactions (euro-based trade) between the two countries as well as providing banking assistance to importers and exporters.
• The CEO of Bank Sepah announced the opening of branches in South Korea, China and Iraq in the near future. In addition to the 34% growth in the bank’s resources in the first 4 months of the current year in comparison with that of the previous year, he also announced the 134% rise in the bank’s activities in foreign exchange over this period. Furthermore, he also referred to the 17% increase in the volume of the facilities granted, worth IRR 433,000 bn.

Iran’s Economic Growth on the Rise

Market News

* With 2011 as the base year, the Statistical Center of Iran announced Iran’s economic growth in the first quarter of 2017/18 to reach 6.5%. The details show that the agriculture, industry and services groups have each registered 3.1%, 4.9% and 8.3% growth over the said period.