Mining, Oil & Gas News & Blog
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The Central Asian and New Silk Road markets form an important geo-strategic and economic trade hub and transit corridor, linking Asia with Europe, Africa the Middle East and India. Iran Stock Exchange is growing and learning to become an important element in the this frontier for investors.

These markets are home to vast natural resource deposits, but most importantly to a young and well-educated workforce capable of converting this raw metal, mineral and energy wealth into long-term sustainable economic growth and regional prosperity.

Driven by the winds of favourable geography, geology and demography Central Asia and the New Silk Road promise to be a key source of growth for investors over the medium-to-long term, with regional listed equity markets currently some of the cheapest in the world.

Last months on FT.com, quoted; “We have worked intensely on the exchange infrastructure during the past four or five years,” says Ali Saeedi, deputy head of supervision of financial institutions at the Securities and Exchange Organisation of Iran, the country’s supervisory authority.

“Sanctions gave us time to prepare for the day a nuclear deal is signed.”

Finity Asset team is working to build networks of relationships with key organisations and individuals in Iran as well as across Central Asia and the wide region. This includes strategic partnerships with leading brokerage and research houses in major market capital hubs along the New Silk Road.

Coupled with our deep knowledge of Iran in particular feeding into a clear investment process these networks give our clients the information edge needed in a frontier market to continue to add value for portfolio investors.

  • Iran as a key market along the New Silk Road, together with other Central Asian economies are a natural trade hub between MENA, Europe and Emerging Asia
  • Iran in particular is awash with natural resources, enjoying much lower costs of production and rising output versus global commodity exporting peers
  • The regions potentials are among some of the best in the Emerging Markets
  • Iran as well as other New Silk Road countries have attractive demographics, with a young, well-educated consumer-driven workforce

As financial sanctions are easing against Iran, foreigners can enter a BOURSE in Tehran with almost as many listed companies as Istanbul. Inflows may reach as much as $1 billion after six to eight months, estimated Reza Soltanzadeh, a founding partner at ACL Assets Management, an investment firm that focuses on Iran.

As of January 2016, the market cap of Iran’s stock market was the fifth-largest in the Middle East and about $90 billion,. The lifting of sanctions allows the country to compete for investor attention with Saudi Arabia, which opened the region’s biggest stock market to direct foreign ownership seven months ago.

Investing on Tehran’s bourse has always been legal for many international investors, but the financial sanctions placed on the banking system made it almost impossible to transfer money in and out of the country. The majority of those sanctions have been removed after an international deal over Iran’s nuclear ambitions, allowing the nation’s banks to reconnect to the Swift system for international financial transactions.

Many Europeans and Americans living in Europe have been able to go on organized investor tours to Iran over the past year, assessing the opportunities and visiting some of the large, listed manufacturers. Many obtained the necessary trading codes and licenses to prepare for the removal of sanctions.

Initially family offices, fund managers with appetite for risk in Emerging Markets have been evaluating the market and rely on their experience in investing in the high risk markets and use their knowledge to evaluate the risks associated with the opportunities.

Today, sanctions remain in place on about 200 businesses and individuals, some of them connected to listed companies. They also apply to firms owned by certain institutions, such as the Iranian Revolutionary Guards.

A list is being developed for companies around 10 percent of those traded on the Tehran Stock Exchange, that were sanctions-compliant and not exposed to any entities previously. Once the list is fully developed and published it will become far easier to engage with them or collaborate as necessary.

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