Units of 2nd ETF to be offered likely in next March

December 29, 2020 - 11:42

TEHRAN- Finance and Economic Affairs Minister Farhad Dejpasand said that the units of the second exchange-traded fund (ETF) will be offered by the end of the current Iranian calendar year (March 20, 2021), if the condition is prepared.

“We are trying to accelerate the transfer of ownership and management of state-owned companies to the private sector”, the minister emphasized.

The secondary trades of the units of the second ETF had finally begun in Tehran Stock Exchange (TSE) on December one.

In May, the Iranian government sold shares in three banks and two insurance companies via the first exchange-traded fund (dubbed Dara First).

Dara First, listed on Tehran Stock Exchange, which is Iran’s major stock exchange, was the first fund from a series of three ETFs, through them shares of some state-owned organizations and companies are planned to be offered.

The shares to be offered via the mentioned Iranian ETFs belong to those governmental bodies defined in Iran’s privatization program, a comprehensive plan seriously followed up by the government to downsize and reduce its role in the economy.

The second ETF (dubbed First Refinery, or Dara Second), which holds government shares in four major oil refining companies, namely Tehran Oil Refining Company, Isfahan Oil Refining Company, Tabriz Oil Refining Company and Bandar Abbas Oil Refining Company, was offered on August 26.

The government owns 20 percent of shares in each refinery. 

It has also a plan to divest shares in giant auto and metal companies through a third ETF (dubbed Dara Third). The third fund is expected to hold 12.05 percent of government stakes in the National Iranian Copper Industry Company, 17.2 percent in Mobarakeh Steel Company, 14.04 percent in Iran Khodro, and 23 percent in SAIPA (the two main domestic carmakers).

Meanwhile, Dejpasand said on September 7 that the government’s remaining shares in three aforementioned banks will be offered via the third ETF.

An ETF is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occasionally occur.


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