By Mahdi Goodarzi & Alireza Hojjatnia
Debt Market to play role in banks restructuring!
Iran central bank has recently gave birth to a plan reforming the banking sector structure. There is no doubt that it will be the most effective of Rohani’s administration rulings. A reform that if adequately being executed, it would lead to a paved path through economic growth and make the bed for an international re-entry.
Four angles on ETFs!
An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. ETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like features.
A mutual fund is a collective investment vehicle. It is a pool of investors’ money invested in the financial or money market according to pre-specified investment objectives.
With respect to Iran, the first Iranian mutual funds were introduced to the capital market in 2008 under the supervision of the Securities and Exchange Organization (SEO), exchanges’ regulatory body in Iran.
Indeed, the development of Iranian mutual funds has been among the main concerns of the market regulator, as this provides the means for amateur and early beginners with the capital market of Iran to invest their precious savings with ease of mind and least amount of risk possible.
Trading halt in stock exchanges of Iran and its repercussions
Halting companies’ symbols and lack of necessary transparencies are not welcome events in any type of stock exchange in the capital markets. As such, this could lead to to poor liquidity in the market in general and might bring about stake holders’ disappointment with the market in a way that might incur loss for the interested parties in the long run in particular.
In fact, all beneficiaries of the market such as investors, underwrites, stock exchange companies, Central Securities Depository of Iran (CSDI), and even Securities Exchange Organization (SEO) are among the entities, thought to suffer, due to unwanted pauses, occurring in the wake of such decisions by the regulators. This, in turn, results in the consequent fees lost by the relevant administrative bodies.
As 9th International Exhibition of Bank, Exchange & Insurance of Iran starts tomorrow 10th July, it sounded a wise idea to brief our readers on the structure of capital market of Iran.
Capital Market of Iran
Social and financial changes in the 1960’s caused Iran’s economy to move towards the one being more market-based. This made financing the economy undoubtedly necessary by designing new markets and instruments.
Thus, capital market foundation was put into the agenda and the respective law was passed by the Parliament, leading to establishment of Tehran Stock Exchange (TSE), with the aim of encouragement of private section development across the economy of Iran.
Can Mortgaged-backed Securities (MBS) revive the housing sector in Iran?
Housing sector is thought to be one of the major economic forerunners in increasing total production and curbing unemployment in Iran.
This sector’s interconnection with other ones related to it—albeit, hit by extended recession—such as steel, cement, tiles and the like throughout the economy places real estate market development in the focal attention of policy makers in Iran.
Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel numbers fall below certain limits. The abbreviation “SME” is used in the European Union and by international organizations such as the World Bank, the United Nations and the World Trade Organization (WTO). Small enterprises outnumber large companies by a wide margin and also employ many more people. SMEs are also said to be responsible for driving innovation and competition in many economic sectors.
While the Iranian insurance market is reasonably developed based on regional standards, there is still significant potential for growth, especially in life segment and most non-compulsory non-life lines, according to BMI (Business Monitor International).
Hence, the lifting of trade sanctions should act as a spur to the growth in economy, leading to rise in household disposable income levels and its consequent positive impact on the segment’s growth, considering low insurance penetration of just 1.9%, at home, over 2014/15, when the international average standing at 6.2%.
Corporate Governance in Iran
Corporate governance (CG) is the system of rules, practices and processes by which a company is directed and controlled.
Corporate governance essentially involves balancing the interests of the many stakeholders in a company –these include its shareholders, management, customers, suppliers, financiers, government and the community.
Since corporate governance also provides the framework for attaining a company’s objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.