An Insider’s Guided Tour of the Iranian Stock Market

Iranian stock market

The Iranian stock market is an enigma to most Western investors. Relatively few people are familiar with the fundamentals of this dynamic country. Yet the Iranian economy is the second-largest in the Middle East after Saudi Arabia – and far more diversified. It is also the region’s second most-populous country after Egypt.

Did you know that Iran’s automotive industry generates over 10% of its GDP? Or that the country has long fostered a culture that rewards – and expects – high dividend payouts from listed companies. Of course this is rational when one considers the country’s volatile rate of inflation. But, when coupled with its market’s almost absurdly low price/earnings ratios – lower than any country except Russia – this market’s fundamentals are certainly raising eyebrows amongst those ‘in the know’.

The decades-long standoff between Iran and the West appears to be drawing to a close now, after an agreement was reached between Iran and the so-called ‘P5 + 1 group’ last month in Vienna. Speculation is now rife with potential opportunities to invest in the Iranian capital markets – we know of at least ten hedge fund managers who have travelled to Tehran in the past several weeks, and we are sure that many more are crowding business-class cabins to and from the Iranian capital.

Recently Frontera sat down with Eddie Kerman of Turquoise Partners, an Iran-based financial services group, to find their answers to these questions. Turquoise has been active in the Iranian economy for over a decade, and claims to manage more than 90% of all foreign portfolio investments on the Tehran Stock Exchange.

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Tune into the below podcast for your roadmap to Iranian equities investing.

This is the first in a series of podcasts that Frontera will be conducting with some of the leading Iranian-focused asset managers, brokers, and investment funds. Count on Frontera to provide your masterclass on one of the largest economies in the Middle East today

Podcast Index

1:18 – What does Turquoise Partners do?

4:28 – What is the process to becoming an active investor in the Iranian capital markets? Is a local presence required?

8:52 – Equities forecast for the next 3-5 years? As the market opens up and foreign capital comes in, what is the outlook for P/E ratios?

11:15 What are the biggest impediments to investing in Iran right now?

13:35 Is it true that there is a culture of very high dividend payouts in Iran? Which particular sectors typically pay an outsized dividend relative to others?

15:18 What has been the impact of 2013 currency devaluation?

17:35 What else do interested foreign investors need to consider while researching a potential entry into the market?

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