Why Tehran Stock Exchange and Borsa Istanbul can't strike deal?
Iranian capital market’s lack of transparent regulations and
rules, the improper financial statements of companies, as well as
volatile exchange rates in the Islamic Republic appear to pose
obstacles for materializing a recent agreement between the Tehran
Stock Exchange (TSE) and Borsa Istanbul, an Iranian financial
analyst believes.
“The TSE and Borsa Istanbul have signed a memorandum of
understanding (MoU) on dual listing of Iranian and Turkish
companies in both markets,” Alireza Kadivar, told Trend March
2.
A delegation from the Turkish capital market visited Iran Feb. 29
to explore the opportunities for joint cooperation in Iran’s
capital market. The delegation included the representatives of the
Capital Markets Board of Turkey, Borsa Istanbul and other Turkish
capital market practitioners.
Saying that the MoU cannot be implemented in the near future,
Kadivar added that preparation is required to materialize the
agreement.
Explaining that Iran lacks transparent regulations and rules to
list foreign companies in the stock exchange, the analyst added
that Iranian companies have also failed to meet the international
standards of financial statements.
“The international investors need financial statements to analyze
the market, but Iranian companies cannot provide that,” Kadivar
mentioned. "Volatile exchange rates are another obstacle against
implementing the agreement."
Saying the currency market has slightly improved over the past
couple of years, he added that a stable currency market is an
initial requirement of foreign investment in the country.
While the removal of international sanctions against Iran offers a
new outlook for a large emerging untapped market, the risk of
exchange rate fluctuations remains as a major barrier for drawing
the attention of international investors.
Iranian President Hassan Rouhani’s government has been developing
plans for luring $30 billion worth of foreign investment in the
post-sanctions era to renew the country’s ageing industry and
ailing economy.
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