Capital market under spotlight as new economy minister takes office

August 28, 2021 - 14:4

TEHRAN – Iran’s new Minister of Finance and Economic Affairs Ehsan Khandouzi has underlined the capital market as one the major priorities of his ministry during his tenure, outlining the programs for improving this market.

As ISNA reported, increasing the role of the capital market in financing production companies and projects, diversifying financial instruments in the capital market, eliminating unnecessary regulations and barriers, facilitating the entry of companies into the stock market, reducing the cost of issuing bonds by facilitating relevant regulations, canceling monopolies and facilitating licensing for stock market-related services such as portfolio management, marketing and brokerage, reforming corporate governance to manage conflict of interest between major and minor stakeholders and finally providing incentives for people to invest indirectly in the capital market have been mentioned as the major programs that the economy ministry is going to pursue in order to improve the capital market.

According to Khandouzi, the stock market is one of the most important pillars of the economy as it will play a significant role in financing government projects and supporting economic growth.

The minister had previously mentioned financing the government and ensuring economic growth as the main priorities of the Economy Ministry during his tenure.

"The main responsibility of the Ministry of Finance and Economic Affairs is to finance the government and ensure economic development using sustainable, safe, and low-risk methods," Khandouzi said on Thursday, the first day of his work as economy minister.

Earlier on Wednesday, the parliament had approved Khandouzi to take office as the new Economy Minister mainly because of his comprehensive plans for improving the capital market.

In a report presented to the parliament on the mentioned day, the parliament’s Economic Committee had stated that Khandouzi’s capital market reform plan was one of the reasons why the committee approved the minister.

The mentioned report also underlined some of the expectations that the parliament and people would have regarding the stock market, including the promotion of information transparency in the market, strengthening commodity exchanges, expanding the energy exchange activities through the supply of crude oil and petroleum products in this exchange, and designing new financial instruments, launching securities market rating agencies and cooperating with the capital markets of other countries.

The report also emphasized the institutional reform of corporate governance for public corporations and financial institutions in order to develop the capital market.

Positive signals in the market

According to market analysts, Khandouzi’s new plans for the stock market have sent positive signals to the market.

“One of the signals that have been received by the capital market is that the new government is strongly opposed to regulatory pricing and believes that supply and demand should determine the stock prices,” Market Analyst Rouzbeh Shariati told ISNA.

The best way for the stock market is for the government not to intervene in the pricing processes and Khandouzi has stressed this fact again and again in his programs, Shariati said.

EF/MA

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