EghtesadOnline: The plan to set up an international bourse in the free economic zones is again under discussion after being put on the back burner.
Speaking on the sidelines of a ceremony to unveil government projects in the FEZs, Hamidreza Momeni, the newly appointed secretary of the High Council of Free Trade and Special Economic Zones raised the subject on Monday.
According to Momeni, the bourse will open in Kish Island Free Trade Zone off the Persian Gulf after approval by the High Council of Securities and Exchange, the stock market regulator.
The exchange will seek to attract foreign investment and contribute to economic growth, he was quoted as saying by IRNA.
“The international bourse will pave the way for interaction with the world economy and create a secure venue for exports.”
The SEO earlier announced plans to extend the international scope of the capital market and help boost collaboration with foreign investors.
While the aim is to attract non-rial financial resources, there is skepticism about the practicability of such an enterprise given the tough US economic sanctions on Iran, namely on key banking, insurance and financial sectors.
Despite the major hurdles to foreign investment, economic officials in Tehran have often announced their interest in working with the international community to improve the economy.
The planned bourse will be Iran’s fifth after the Tehran Stock Exchange, Iran Fara Bourse (the junior equity market), Iran Energy Exchange (IRENEX) and the Iran Mercantile Exchange.
Foreigners hardly represent 0.12% of investors in Iran’s capital market, according to an earlier report by the Central Securities Depository of Iran. The number of trading codes issued for foreign legal and natural entity investors is estimated to be around 40,000, according the SEO head Mohammad Ali Dehqan-Dehnavi.
He said most of the foreign trading codes are in the commodity exchange, namely IRENEX and IME and predicted that the number would increase to 200,000 codes with incentives designed to realize the target.
The government recently put into effect a decision to promote foreign investment in the Tehran share market. As per the decision approved in May, foreigners will be eligible for a five-year residence visa if they invest at least €250,000 in the Tehran Stock Market.