‘Directives by Govt. Economic Coordination Headquarters could balance stock market’

May 5, 2021 - 15:36

TEHRAN - The vice-chairman of the monetary and capital committee of Tehran Chamber of Commerce has said that the directives issued by the Government Economic Coordination Headquarters can bring calmness and balance to the country’s stock market.

Back in early April, the Government Economic Coordination Headquarters, in its 216th meeting, approved some new directives for regulating the stock market which has been witnessing unprecedented fluctuations over the past few months.

Underlining the significance of the mentioned directives, Mohammad-Ali Dehqan Dehnavi, the head of Iran’s Securities and Exchange Organization (SEO), said: “This [approving the new regulations] shows the support of the government’s three branches for the stock market and can calm the market and the shareholders and help restore its balance.”

Following the meeting of the Government Economic Coordination Headquarters, last week Dehqan Dehnavi unveiled the government’s new directive package dubbed “7+3”. This package includes 10 new directives of which, according to the official, three are already being implemented and the rest will be implemented soon.

The new directives include allocation of one percent of the National Development Fund (NDF) resources to the stock market stabilization fund, lifting the ban on capital market financial institutions to use banking facilities, and granting five-year residency to foreign investors who buy shares in the Iranian capital market.

The above-mentioned directives have been implemented in the capital market as of April 27th, according to Dehqan Dehnavi.

In the 216th meeting of the Government Economic Coordination Headquarters, President Hassan Rouhani presented a report on the government’s supportive measures for the stock market, saying: “This year, which has been named the year of supporting production and eliminating obstacles, the government is trying to remove obstacles to the growth of the capital market and will try to encourage people to enter this market with the necessary training and arrangements.”

The government supports the capital market to direct liquidity into productive sectors and, in general, to de-centralize the economy and to help economic transparency, he said, adding that the government will continue to offer shares in state-owned enterprises and institutions in the capital market.

In its latest supportive decision, the government has approved to inject 240 trillion rials (about $5.7 billion) of resources into the market in the form of bonds which most experts evaluate as a positive measure. It is said that these funds are gradually injected into the market and help increase the liquidity until new resources enter the market.

It has been said that these resources that enter the market will also motivate shareholders, and therefore real investors will be encouraged to invest in the market.

EF/MA

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