The Forum for Partners in Iran's Marketplace
 
 
 
 
 
 
 
 
 
 
 
     

August 2011, No. 60


Stock Exchange

Tehran Stock Exchange Accounts
for 5% of National Economy


They have also priorities to raise funds which include internal resources or aggregate profits, handing out bonds and increasing total capital


Managing director of Tehran Stock Exchange says that the stock market is not just a secondary market for stock exchange, adding, "Stock markets in other countries account for a 15-20-percent share of national economy while Tehran Stock Exchange's share of the national economy stands at 5 percent which should be increased."

Hassan Ghalibaf-Asl added that transactions on Tehran Stock Exchange in 2010 reached the record figure of 21,000 billion tomans with an average output of 75 percent for the market and very good companies entered the market.

"At the same time, during the first month of the current Iranian calendar year (started March 21, 2011), a total of 2,500 billion tomans worth of transactions have been carried out, up by 2.5 times compared to the corresponding period of the preceding year. This signals a golden time at the market and an opportunity which should be taken advantage of in the best possible manner," he added.

The official stated that the stock market was not just a secondary market for stock exchange, but its more important role is to finance various companies and projects.

He noted that total increase in capital of companies on the stock market was 4,000 billion tomans last year, which was 1,000 billion tomans in 2009.

Ghalibaf-Asl further noted that although funding the capital market has been satisfactory, but it still lags behind international figures.

"Stock markets in other countries account for 15-20 percent of their respective national economies, but the share of Tehran Stock Exchange from the Iranian national economy stands at 5 percent," he said.

The official noted that funding projects and companies, competitiveness, high transparency, low rate of funding costs, and possibility of the general public to avail themselves of the benefits of the markets as the main features of Tehran Stock Exchange.

Qalibaf-Asl stated that elsewhere in the world funding companies are only limited to small enterprises, while big enterprises use general methods to fund their operations.

"They have also priorities to raise funds which include internal resources or aggregate profits, handing out bonds and increasing total capital," he said.

The official added that Iranian companies rarely use domestic resources and aggregate profits for long-term investments, so that, among stock exchanges which are members of the International Federation of Stock Exchanges, companies on Tehran Stock Exchange enjoys the highest rate of dividend.

"This has prevented their growth. Therefore, managers should use internal resources and consider lower profits for division," he added.

Spokesman of Tehran Stock Exchange also stated that the government can extend tax discounts to companies that use internal resources to develop their activities.

"Managers of companies, on the other hand, should make precise plans for economically viable investments using the money that they earn so hard," he concluded.

 

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  August 2011
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