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Bank Melli Iran Investment Company |
Innovative Investment Ideas
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Mohammad Mehrzad, Managing Director of Bank Melli Iran Investment Company
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Navigating the stock market can be tricky and risky at times, that is why many
don’t take the chance and miss out on its lucrative opportunities. The better
solution would be to entrust your money to the professionals who have shown
proven results in money management. Amongst these investment companies, Bank
Melli Iran Investment Company stands out from the crowd. The company was
established on 9 February 1992 as a public stock company, with its
headquarters situated in Tehran.
The main
activities of the company can be listed as follows:
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Analyzing, studying, developing, expanding, launching, investing and
participating in a variety of production, commercial, service, engineering
and construction projects in various economic sections and their subsequent
organization.
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Establishing a variety of production, industrial, service, engineering,
commercial and construction companies and partaking in any form of
cooperation with the abovementioned companies.
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Rebuilding, renovating, organizing, maintaining, reforming, suspending,
merging and liquidating a variety of companies and financial institutions in
Iran and abroad.
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Undertaking all share transactions and providing investment services and
participating in all financial and monetary activities going on in the
monetary and capital markets, as well as the sale and purchase of goods and
estates and managing the trust funds of interested costumers.
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The
give and take of permits for any sort of representative company in Iran and
abroad as well as getting agreements and licenses for executing production
and industrial projects and developing, completing and expanding them as
well as establishing legal entities for these purposes.
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Conducting every form of legal activity through direct or indirect means for
the promotion of the covered company’s goals and objectives. These include
brokerage and commissioning and so on.
Bank Melli Iran Investment Company Assets and Capital:
The
Company’s primary capital was 100 billion rials which was increased to 300
billion rials in an extraordinary general assembly in January 1995. This
figure was further boosted to 900 billion rials in August 1995 and in January
2002 its capital was again increased to total 1,400 billion rials and was
registered in the Company Registration Office in February 2002. The latest
capital increasing has occurred in 2004 to total 1610 billion rials and was
registered on 3 February 2004. This capital has been divided into 1610 million
1000 rial shares, all of which have been paid for in full.
At the
beginning of 2004, the company’s investment basket, comprised of 15 different
industrial groups, had cost a total of 3231 billion rials and was worth 10081
billion rials on the market. The market value of the said basket showed a 312%
growth. The company’s investment basket has undergone remarkable
transformations since 2001. The new policies adopted include: having a
profit-based view of all transactions and increasing the profitability of the
investment basket, moving in coordination with the policies adopted by the
capital market, long-term investment in competitive companies in the global
trade arena and lowering the investment risk by diversifying the investment
basket.
To get a
better picture of the company, its activities, and its role and views of the
capital market, we decided to talk with the Managing Director of Bank Melli
Iran Investment Company, Mohammad Mehrzad. The following are extracts from his
interview.
To start off, what can you tell us about the separation of the capital and
monetary markets in Iran?
If this
separation takes place it will be very good for transparency. But if this
separation means these markets will not cooperation or help each other, this
will be something that has never happened anywhere in the world. If by
separation we mean that no interaction should take place between the two
markets, then it is not desirable, or even achievable. What we really want to
is to divide these markets so our financial interactions can become more
transparent, which will in turn be to the benefit of our markets, whether
capital or monetary.
What are the main objectives of Bank Melli Iran Investment Company for an
effective presence in the monetary and capital markets?
We have
established an effective presence in over the past 7 or 8 months, which comes
after a period of relative stagnation over the past several years. We have
taken great leaps and have made several changes that will ultimately lead to a
better presence in the market and subsequently encourage and attract people
and investors to our direction. Over the past few months a major percentage of
the shares of major shareholders have been transferred to regular people and
smalltime shareholders, which shows that this market is connecting ordinary
people to the places where they couldn’t access before.
But in
regards to what we have done to establish a more active presence in the
markets, it is clear that we have tried to achieve this by conducting our
activities in a knowledge-based manner. We have pursued investments that will
receive less of a shock when we enter the World Trade Organization (WTO). When
we receive stock that has been handed down to us or in the industrial sector
or places where we don’t have relative advantages, we pass them on quietly to
other parts in the private sector which have different investment approaches
and may be fit to manage the industrial sector in a more competitive way. We
relinquish some industrial stock and instead, turn our attention to others
that have a lower risk rate in the country and the region. When this stock is
managed properly it will achieve its growth potential and this potential will
cause us to have a more active presence in the capital market.
For example, we have bought shares in Sadra Shipping Company. This was after
considering the role Sadra has had in the Third and Fourth Development Plans
in regards to oil contracts and the constructions of ships, jetties and the
like. On the other hand we have become active in the downstream petrochemical
sector and we are working with foreigners on a couple of petrochemical
projects. We also work as financial mediators and go-betweens and encourage
worthy companies to become part of our investment basket. We also have a large
stake in the cement industry, which we believe to be the bloodline of the
country’s economy and development. We are working in partnership with
foreigners on a couple of projects in this regard. We have now established a
presence in the IT industry as well. Iran has great potentials in the IT
sector, but we must do better in regards to its management. IT is a sector
that will have an unstoppable growth in our country and whoever takes the
right approach in regards to the IT industry will be right on course for the
future.
Why did you buy into Sadra Shipping Company?
We have a
diverse and vast investment basket and in an attempt to stabilize and
diversify this basket a decision to buy Sadra’s shares was put on the
company’s agenda. This decision was taken after the conduct of Sadra was
examined in the field of shipbuilding, sea constructions as well as oil and
gas projects. This examination showed us that Sadra was capable of meeting our
standards and advancing our objectives, which were stabilizing and
diversifying our investment basket.
Does your company intend to cooperate with foreign companies for the execution
of domestic and international projects?
As I have
already mentioned, we are already working with foreigners in the petrochemical
and cement industries and with great success. We are working with them in
other projects as well, in both financial and managerial dimensions. This
cooperation takes on the form of creating funds and attracting foreign capital
into the country.
But in
regards to investing overseas, if an opportunity presents itself in which we
can cooperate with foreigners in overseas projects and take part in a small
project we can handle, we will surely take it. We are currently studying some
projects, including a small power plant and the like, but these have not yet
reached their final conclusion.
The
make-up of industries in Bank Melli Iran's Investment Company's basket, based
on their value at the end of 2003
Bank
Melli Investment Co.
No. 2
Rafiee Alley, Nader Alley, Valiasr Ave., Tehran 15116
P.O.Box:
15875-3898
Tel: +98
21 871 10 93, 871 11 64 / 872 36 09, 871 33 34
Fax: +98
21 872 82 02
E-mail:
BMIT@parsonline.com |
