Exchange & Stocks
The head of Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA) called on the government to increase the number of initial public offerings (IPOs) in the country’s stock exchange, IRNA reported on Tuesday.
Making the remarks during the first meeting of TCCIMA’s board of representatives in the current Iranian calendar year (began on March 20), Masoud Khansari also said, “We anticipate more realistic prices as well.”
He further noted that if the government transfers just the shares of state-owned organizations and companies, but the management will still remain in its own hands, it will create some problems in the long-term.
Khansari mentioned Shasta as an example in this regard, and said, “In terms of Shasta, we saw transferring of shares, but not the management.”
Iran’s stock market witnessed its largest-ever initial public offering on April 15, when Social Security Investment Company (SSIC, also known by its Persian acronym Shasta) offered eight billion shares, which account for 10 percent of its stakes, for sales in Tehran Stock Exchange.
Shasta is the investment arm of the Social Security Organization, which provides healthcare entitlement and pension benefits for a large proportion of Iran’s middle and working-class members of the labor force.
On Saturday, the managing director of the Tehran Stock Exchange (TSE), which is Iran’s major stock market, told ILNA that the country’s stock market has attracted 350 trillion rials (about $8.33 billion) of liquidity since the beginning of current Iranian calendar year.
Highlighting that the stock market is welcoming the initial public offering of the companies, Ali Sahraei said, “We held the IPO of Shasta although it was a very complicated process.”
Answering to a question about the number of IPOs planned for the current year, Sahraei said, “We try that more IPOs will be held this year compared to the previous year, while it is important that the large and strong companies will offer their shares.”
The law on the implementation of the general policies of Article 44 of Iran's Constitution on privatizing state-owned companies was declared in 2006 in a bid to downsize the government and promote the private sector’s role in the national economy.
The government envisioned a large privatization program in the Fifth Five-Year National Development Plan (2010-2015), aiming to privatize about 20 percent of the state-owned firms each year. Under the present interpretation of Article 44, some state-owned companies have been privatized to reduce their financial burden on the country’s budget and also increase their productivity.