By Mahnaz Abdi

Outlook positive for investing in stock market this year

April 14, 2023 - 13:53

TEHRAN- The stock market transactions in the past Iranian calendar year 1401 (ended on March 20) went through volatile days, which, according to experts, despite the value of the stock market for investment, the mistrust of shareholders and their fear of entering their capital into this market led to a decrease in liquidity and creating severe fluctuations in the stock market.

This condition caused the government and the Securities and Exchange Organization (SEO) to take effective measures to restore prosperity and investors’ confidence in this market, in a way that many capital market experts believe that the outlook for investing in the stock market is positive in the current year.

Hossein Abdi, a capital market expert said that the government has a supportive approach to the capital market, and it seems to affect market transactions positively.

Analyzing the upward trend of the stock market and breaking the record of the index this year, he said the capital market started its work in the first week of this year with a very positive trend, which promises good days in the capital market for 1402.

TEDPIX, the main index of the Tehran Stock Exchange (TSE), which is Iran’s main stock exchange, jumped to 2.1 million points on April 4, registering a record high.

The forecasts indicate that the stock exchange transactions in the first three months of this year will experience good days and will provide good returns to the shareholders, Abdi further noted.

Meanwhile, as stated by the secretary general of Iran’s Securities Exchange Brokers Association (SEBA), the government and Securities and Exchange Organization worked well to make changes in the stock market during the past Iranian year.

Mohammad-Reza Dehqani Ahmad-Abad added that these measures can bring good returns in the first half of 1402, but measures must be taken to remove the concerns from the stock market in the long term.

Also, in a message on the occasion of the New Year, SEO Head Majid Eshqi mentioned the measures taken by this organization in the past year, and explained the priorities and key plans of SEO in 1402.

In his message, the official wrote:

The Securities and Exchange Organization has always tried to lay the ground for the continuation of sustainable growth and increase the efficiency of the capital market by carrying out structural reforms, and in this regard, five key programs are prioritized:

1- Indirect investment development: In the past year, a good amount of diversity was created in indirect investment instruments, especially investment funds, and we continue to focus on deepening these new and efficient instruments and promoting them for investors.

2- Creating a platform for transparent and diverse financing: By defining technical and legal infrastructures to facilitate micro and macro financing by the private and non-governmental sectors, a new chapter of financing projects and businesses was established, and the government was able to implement its plan to transfer the shares of companies along with the transfer of operational management without harming the capital market. The initial offering of shares of businesses based on new technologies was also a big step towards the financing of knowledge-based companies, which will be followed seriously in the current year in a higher volume and of course according to the market capacities.

3- Smart regulation and monitoring: The organization's new approach in smart and preventive monitoring, along with the launch of systems for speeding up the handling of complaints, promises a new move that will greatly help to reduce violations in this market by formulating the necessary regulations in the amendment of the stock market law.

4- Revision of the regulatory infrastructure: Due to the necessity of implementing professional and uncomplicated principles and rules in the direction of the sustainable development of the capital market, in addition to the measures taken in order to amend the corporate governance guidelines for publishers and the guidelines for identifying and reporting the confidential information holders in the organization, some reforms, which need the changes in the stock market law, have also been considered in cooperation with the legislator, which will definitely ensure the long-term interests of the capital market.

5- Derivative market development: Some basic measures in the field of capital market infrastructure and also in the field of designing derivative instruments with the aim of making the market two-way and providing risk management instruments for market participants were implemented in the past year, and therefore there is full readiness and determination to make these efforts come to fruition with the introduction of new derivative instruments, especially in the stock market, from the beginning of this year.

In 1402, while pursuing the aforementioned long-term plans, the Securities and Exchange Organization intends to provide the basis for the double growth and prosperity of the capital market through facilitating the establishment of project public companies, activating the capacity of credit rating companies, especially in line with the development of the bond market and fixed income funds, and generating government assets through the real estate board, capacity building for the issuance of debt securities that can be converted into shares, the introduction of various commodity funds, and finally the development of the online verification platform of assets.

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