SEO suggests government form a financial stability council

June 1, 2022 - 11:48

TEHRAN - Iran’s Securities and Exchange Organization (SEO) has suggested the establishment of a financial stability council to the Government Economic Committee, a deputy with the organization said.

Mohsen Khodabakhsh, the SEO deputy head for supervision on exchanges and issuers, said the formation of a financial stability council in the country can become the basis for fundamental decisions in the capital market. Accordingly, Securities and Exchange Organization proposed the formation of this council to the government.

As reported by IRIB, Khodabakhsh stressed the need to establish the financial stability council and monitoring of investment markets, saying that at this time the money market, capital market, as well as insurance and pension funds can stabilize the country's economy together.

Stating that the global markets are facing many risks related to changes in laws and regulations, he added: "Predictability of major decisions is a very important issue in the face of risks regarding laws and regulations.”

If a decision is made on a grand scale for a certain period of time, under no circumstances this decision should change during that period, the official emphasized.

Emphasizing that the investor needs predictability and stability, not support, Khodabakhsh said: "Lack of trust as the highest asset in the capital market causes people to choose other options for investment, and this leads to capital outflow from the market."

The SEO deputy head also referred to the measures taken by the government to support the capital market and added: "The government took important measures to improve the market and to make it more predictable, but there was no serious change in the market path. These fruitless efforts are due to mistrust that has been formed over the years and has not yet disappeared from the market.”

Market Analyst Ahmad Eshtiaqi believes that the Iranian stock exchange market can grow by 30 percent by the end of the current Iranian calendar year (March 20, 2023).

In an interview with IRNA in early May, Eshtiaqi pointed to the growth of the stock market index and the factors affecting it and said: “It seems that the shares of companies still have room for growth and according to the forecasts, the stock market can grow by about 30 percent by the end of the year, but this growth will be gradual and slow.”

The analyst noted that the shareholders’ interest in the capital market over the past few years has been due to the value of companies' stock, so when the shares still have room to grow, the market index will grow as well.

EF/MA

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