Iran allows foreigners to buy 10 percent of bourse
Move opens up $4.6 billion in assets
Foreigners will be able to directly buy up to 10 percent of shares of the companies listed on Tehran stock exchange (TSE), waiving case-by-case permits required in the past, the bourse chairman told state radio on Sunday.
Tehran bourse lists 422 companies valued at $46 billion. The new directive opens $4.6 billion worth of assets to foreign investors.
"Foreign investors can buy up to 10 percent of shares of the companies listed in the bourse," Tehran bourse board chairman Haydar Mostakhdemin-Hosseini told the state radio.
It was not immediately clear when the new rules would come into effect.
Investors could in the past buy up to 49 percent of Iranian companies' shares, but were required to seek permits from the government, a process analysts described as painstaking.
Mostakhdemin-Hosseini added that foreign investors would still only be allowed to repatriate their dividends after three years, in line with Iran's foreign investment law.
Iran has followed on the heels of other Middle Eastern bourses by allowing foreigners to purchase limited amount of shares. Foreigners are allowed to purchases shares in Tunisia, Bahrain, Kuwait and Qatar.
Iran's Intelligence Minister Ali Younesi was quoted earlier in the year as saying the TSE needs fundamental structural reforms to attract over investment from Iranian expatriates. Younesi estimated that expatriates held up to $800 billion in capital, adding that the government has not done enough to attract potential investment to develop economic development and growth in Iran.
According to research published in Mehr News Agency, Iranian expatriated living in the U.S, U.K, Germany and the U.A.E have well over $500 billion in assets.
Experts have said that due to Iran's small capital market any minor developments could drastically sway the value of shares.
Iran's bourse more than doubled in value last year. - Reuters