IME to start residential units preselling via salaf bonds by next month

August 21, 2020 - 14:0

TEHRAN- Iran Mercantile Exchange (IME) will start preselling trades of residential units via standard parallel salaf bonds by the next month, the IME director of economic studies announced.

Javad Fallah said, “IME is seeking attraction of liquidity by the capital market to provide financing for the construction of houses; so, we are intending to offer slaf bonds to achieve this goal”, Tasnim news agency reported on Friday.

The official said that the IME have received the salaf bonds from Housing Investment Company, which is affiliated to Bank Maskan (Housing Bank).

These bonds enable the people to pre-purchase the residential units based on the amount of their money.

A standard parallel salaf is an Islamic contract similar to futures, with the difference being that the contract’s total price must be paid in advance. 

It also should be mentioned that a commercial property has been offered at the IME for the first time on Wednesday.

As reported by the IME International Affairs and Public Relations Department, the side market of the IME hosted the offering at the base price of 10.639 billion rials (about $253.3 million).

On July 25, a member of Iran’s Securities and Exchange High Council announced that the country’s real estate stock exchange would be established by the next four-six months.

The establishment of such exchange is in line with the government’s policy of providing housing units for the underprivileged, and many efforts have been already made to prepare the required infrastructure in this due.

The head of Tehran Stock Exchange (TSE) had previously announced that the exchange was due to be established in the middle of the previous Iranian calendar month (early July).

When established, it will be the country’s fifth major stock exchange. The four other ones are TSE, Iran’s over-the-counter (OTC) market, known as Iran Fara Bourse (IFB), Iran Energy Exchange (IRENEX), and Iran Mercantile Exchange (IME).

Deputy Head of Iran Chamber of Commerce, Industries, Mines, and Agriculture (ICCIMA) says the establishment of the country’s real estate stock exchange is going to promote transparency in this market.

According to Hossein Selahvarzi, establishing this stock exchange is going to be an opportunity for making the transactions in the housing market more competitive and transparent, and will gain people's trust for participation in mass construction projects.

Earlier this month, speaking in a meeting with the officials from Iran's Mercantile Exchange, which is in charge of the establishment of the real estate exchange, Selahvarzi said: “We are studying various aspects of the project.”

The official noted that the Real Estate Exchange Company is going to be established with an initial capital of 50 trillion rials (about $1.2 billion), of which 50 percent will be offered to people in the form of underwriting, while 25 percent will be shared among government agencies and another 25 percent is given to private sector companies.

“Companies wishing to participate must submit their initial application; these companies will be allocated up to 2.5 percent of the total capital which would be 1.25 trillion rials (equal to nearly $29 million)”, he added.

Underlining the great capacities of this exchange, Selahvarzi said the capital market has the ability to define practical tools for financing the real estate market and large construction projects, and it will make people more confident in participating in the implementation of such projects.

I late June, Finance and Economic Affairs Minister Farhad Dejpasand announced the establishment of the country’s real estate stock exchange.

The minister had stated that the Economy Ministry was finalizing the issue with the Securities and Exchange Organization (SEO).

MA/MA

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