TEHRAN – Iran’s Securities and Exchange Organization (SEO) has unveiled a complete support package to encourage actions in the capital market as shareholders are getting reluctant to make investments in the market.
As introduced by the SEO Office of Public Relations, one of many main measures thought of in this package is the insurance coverage of shareholders’ capital and dividends over the following yr, IRNA reported.
The complete support package of the capital market, which was designed final week and has been reviewed by the nation’s financial authorities, was put in impact as of Saturday morning.
Insuring the shares of actual entities up to one billion rials (about $3,450) per particular person, issuing subordinated warrants on shares of mounted earnings funds up to 400 trillion rials (about $1.38 billion), injecting new assets into the market by sovereign funds to purchase shares, depositing up to 50 trillion rials (about $172 million) of the assets permitted in the nationwide funds invoice for the Capital Market Development and Stabilization Fund as of Saturday, in addition to direct and steady coordination, supervision and monitoring of the authorized entities lively in the capital market, together with firms and semi-governmental monetary establishments, pension funds and army establishments are among the many measures thought of in the talked about support package.
The package additionally stresses cooperation between the Central Bank of Iran (CBI) and the Ministry of Finance and Economic Affairs to handle the rates of interest.
Increasing SEO’s direct investment in Capital Market Development and Stabilization Fund, limiting the actions of entrepreneurs, and suspending the underwriting of securities and preliminary choices till additional discover, are additionally among the many points thought of in SEO’s support package.
After falling about 40 p.c from its peak in July 2020, TEDPIX, the principle index of the Tehran Stock Exchange (TSE), continues to be going through a steady decline and now the market is in a extra fragile state of affairs than earlier than because the index has fallen under 1.3 million factors.
A report printed by the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) has not too long ago acknowledged that the capital market is going through distrust and uncertainty and with the continuation of the downward pattern in the market’s index, shareholders are getting extra inclined in direction of promoting their shares.
Back in February, the federal government’s financial coordination headquarters had additionally unveiled a support package for the capital market, which included measures reminiscent of decreasing the worth of petrochemical feed, decreasing taxes on manufacturing firms, defining new laws for the mining sector, rising the capital of the Stock Market Stabilization Fund, controlling the discharge of presidency bonds, and figuring out the change charge of the banks; however this package, regardless of the short-term optimistic results, was not ready to change the final pattern of the market and forestall the continual fall of the stock costs.