TEHRAN (Reuters) - In the busy foyer of the Tehran Stock Exchange an old woman in a black chador clutches her shopping bag and gazes up hopefully at the electronic display showing the latest share prices.

Like the other Iranians bustling past her, she is betting on a market that has soared to record highs despite ever-tightening international sanctions and lackluster oil prices.
While U.S. diplomats were busy upping Iran's economic punishment over nuclear activities, Iranian shares, which might have been expected to fall, have, instead, gone through the roof.
Tehran's Tepix index has risen 65 percent to all-time highs this year. Its latest record was set on Sept. 18, when it hit 18,658, up from 11,295 at the start of the year. By comparison, New York's S&P 500 Index has made no major gains this year as the U.S. economy struggles to recover from the financial crisis.
Officials say privatization, cheap valuations and moves to cut red tape and encourage private investors have lured Iranians away from the once-booming property market, the traditional home of the Iranian nest egg, which stagnated in late 2008.
The world's fifth-largest oil exporter hopes to raise $12.5 billion by privatizing over 500 state firms during the 2010-11 year, and plans to sell all of its refineries and petrochemicals units, promising potential investors a solid pipeline of IPOs.
Iranians are also increasingly reluctant to park their spare cash in the bank, where interest on instant access savings has fallen from about 12.5 percent three years ago to 6 percent now. Those rates seem healthy compared to Western economies, where central bank rates are near zero, but are no match for the rewards promised by a bourse which already boasts more than 330 listed firms and a market capitalization above $70 billion.
Speaking in his office on the upper floors of the stock exchange, bourse chief Hassan Qalibaf-Asl summed up the logic: ""The opportunities and good factors affecting the growth of the capital market and attracting investors are more important, and the weight of them is more, than bad factors.""
Foreign investment on the Tehran bourse accounts for just 0.5 percent of the shares, according to the bourse chief.
""We don't even look at the Iranian market. There is just too much political risk involved,"" Robert McKinnon of ASAS Capital, an asset management company in Dubai, said in June, when bourse officials travelled to the city to drum up foreign interest.
In an effort to attract cash from abroad, Iran revoked a rule this year that had forced foreign investors to hold their initial capital in the Islamic Republic for three years.
So far, Tehran's bourse has lured only a handful of smaller institutions willing to gamble on the world's riskier markets.
Fund management company Castlestone calls Iran stocks ""a jaw-dropping opportunity"" and plans to include them in a new high-growth emerging markets fund.
Turquoise Partners, an investment firm with offices in Tehran and London, manages a $100 million fund on behalf of foreign investors wanting a piece of the Iranian action.
""We've had a flood of money coming into the market in the last one and a half years,"" Ali Mashayekhi, head of investment research at Turquoise, said.