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EghtesadOnline: As soon as Iran’s nuclear deal with world powers took effect, Majid Zamani and his partners set up an investment boutique with the aim of tapping into the flood of foreign business they hoped would flow into the Islamic Republic.

Progress was initially sluggish as overseas investors took a cautious approach to Iran, yet Zamani, a US-educated former World Bank consultant, remained confident about Kian Capital Management’s prospects, reads an article published by The Financial Times. Excerpts follow:

But the election of Donald Trump and his bellicose rhetoric toward Iran has triggered a surge of uncertainty and forced him and other Iranian businessmen to recalibrate their plans. They no longer expect foreign investment to flow easily and instead are refocusing on their domestic market.

“The victory of Trump was like a sudden brake on the wheels of a car that had started moving slowly,” Zamani, Kian’s chief executive, said.

Trump, who has described the nuclear deal as one of the “worst ever,” launched a string of verbal attacks on Iran last week, saying it was “on notice” and “playing with fire”.

According to Financial Tribune, his administration also imposed new sanctions on Iranian entities and individuals, and Iran was included in Washington’s travel ban on seven predominantly Muslim countries. Many Iranians worry that more punitive actions will follow.

Tehran-based Kian has already felt the impact. When it was set up a year ago, it hoped to attract a foreign partner. But a Middle Eastern investor who was on the cusp of buying a stake in the boutique pulled out, as Trump’s chances of winning the November election became clearer. 

The firm has also been advising a foreign client on a deal to buy shares worth hundreds of millions of dollars in an Iranian company that is now in the balance.

The chief executive of a households goods company says his firm was hoping to set up a joint venture with a European and an Asian company that had agreed to invest $70 million. But that deal has also been put on hold, the chief executive says.

“We are going to go ahead by curbing our ambitions and relying on domestic resources,” he said.

Executives are encouraged by the fact that Iran’s political leaders have so far been cautious in their responses to the US president’s fiery outbursts. 

Business leaders also take solace from the fact that Iran’s $16.6 billion deal for Boeing jets remains on track. Five days before Trump’s inauguration, Iran was celebrating the arrival of Iran Air’s first new aircraft—an Airbus jet—in 23 years, a symbolic moment in a country desperately in need of investment.

There are no signs that French companies such as Airbus and Peugeot are under pressure to reconsider deals they reached with Iran in the wake of the nuclear agreement. However, it emerged last night that the oil giant Total made its decision to invest in Iran conditional on the Trump administration’s renewal of US sanctions waivers by the summer.

Steven Daines, chief executive of new businesses at Accor Hotels, says the French group is not altering its plans to operate hotels in Iran. But on a visit to Tehran this week, he acknowledged that “we are finding it more difficult than anticipated because of concerns of instability both domestically and internationally [about investing in Iran]”.

Zamani is confident that the domestic market is big enough to continue driving Kian’s growth and has plans to raise €100 million of funds for an Iranian petrochemical company from domestic resources. 

The removal of sanctions has already enabled Iran to double its oil output and Iranian companies have survived much tougher times in the past.

“Today, we realize more than ever that the nuclear deal is a massive achievement, much bigger than what we thought before the victory of Trump,” Zamani says. 

“There is hope in the future, as long as Europe remains committed to the nuclear accord.”

Donald Trump Iran sanctions Iran deal Iran Businesses Iran-US relationship