Security, Profitability, Prosperity
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Ali-Akbar
Amintafreshi |
In a country where the banking
system is yet to practice private ownership, investment banking is largely shouldered by
investment companies affiliated to a few major banks of the country. Mellat Investment
Corporation (PLC) is one of such companies operating under the umbrella of Bank Mellat. To
find out more about the policies and objectives of this corporation, Iran International
interviewed Ali-Akbar Amintafreshi, managing director, and Hassan Mehdi-zadeh, head of
Share Trading Dept. & Foreign Investment Development.
Please brief us with a background of Mellat
Investment Corporation and its activities.
Amintafreshi:
Mellat Investment Corporation (MIC) was founded by Bank Mellat which contributed 60%
of MIC’s capital at the time of establishment. MIC embarked on its activities in 1992
and during the past eight years its capital has risen to 230 billion rials. Its major
activities are focused on the Tehran Stock Exchange (TSE). Nearly 85% of our funds have
been invested in the shares of manufacturing and industrial companies.
We are involved in four major areas of
activity: purchase and sale of shares on the TSE, investment in projects and industries
which are not listed in the TSE, business and commercial activities, and construction
operations.
How
is MIC preparing for the trend of economic globalization?
Amintafreshi: I believe globalization of economy is an inevitable
destiny and countries such as Iran would become isolated if they do not join the WTO. The
WTO will make the situation more competitive for investment companies, and if such
companies fail to equip themselves and adapt to the new situation prior to the emergence
of the new situation, they would undoubtedly face serious problems.
Based
on a global vision, MIC has put international activities on its agenda |
We must definitely change
our strategies in order to be able to adapt ourselves to the new situation. Our outlook of
the future must be a global one. We must go beyond our limited capital market. We all know
that Iran’s only official capital market is the TSE and we quite well know that it
does not measure up to the standards of even the newly developed countries such as
Malaysia or South Korea.
However, there is still hope because Iran has vast potential. I see the Iranian market as
an energy market. As you know investment risk in Iran currently stands at grade 5 which
has moved up from grade 6. Foreign countries have become inclined toward the Iranian
market during the past two years, particularly after the election of President Khatami. I
think the ground will be prepared for globalization of the Iranian market.
An organization like MIC is constantly
dealing with the concept of investment be it in Iran or abroad. How do you explain the
very fundamental factors that foreign investors demand before putting their capital in
Iran?
Mehdi-zadeh: Whether it be in Iran or any other
place across the world, there are a couple of factors which bear greater importance for
the foreign investor. One would be the safety and security of the place of investment.
 |
Hassan
Mehdi-zadeh |
If there is security, first
of all the investor would be assured that he would at least get back his principal
capital. Secondly, if there is security he would know that he’d be able to repatriate
his capital anytime he would desire. And third, there are the dividends he intends to earn
and transfer abroad. Therefore, besides security, capital and returns on capital are
important. Unless these three conditions are provided, investment in any country
whatsoever would face difficulties.
If foreign investors were to compare security in the
Islamic Republic of Iran with that of its neighbors, they would immediately come to the
conclusion that Iran is the safest place for their presence in the region. Many countries
have recently come to believe that Central Asian markets are quite virgin with regard to
investment. If the foreign investor can find a base or a platform in Iran which enjoys the
three conditions I mentioned, Iran would be the best place for foreign investment. Part of
these conditions should be handled by the state authorities through laws. Iran’s
foreign investment laws are old. Of course, it does not matter as long as they fulfill the
three conditions, in which case they only need to be updated. The new legislation then
should include these conditions.
Recently, foreign investors in Iran have been told that if they intend to transfer their
profits, they should do so in the form of goods instead of cash. It seems that this has to
be adjusted in the new legislation in order to enable foreign investors to move the
returns on their capital in cash. |
