SEO unveils new stabilization package amidst market recovery in Tehran

Iran’s Securities and Exchange Organization (SEO) has introduced a fresh stabilization initiative to enhance liquidity and rebuild investor confidence after recent market fluctuations, according to the Tehran Stock Exchange (TSE) chief, Mahamoud Goudarzi. Goudarzi announced that collaborative efforts among regulators, stakeholders, and capital market entities have set the stage for a gradual market recovery. The updated plan entails ongoing direct assistance for listed stocks, improved fund and portfolio management, the adoption of derivatives like put options and futures, and regulatory adjustments.

Goudarzi emphasized that this initiative aims to transition the market away from volatility towards stability and eventual growth. Following a tumultuous period characterized by geopolitical tensions and a 12-day erratic phase, the market exhibited signs of stabilization in recent sessions. Initially concentrating on asset protection during the crisis, the market shifted its focus to enhancing liquidity last week and is now emphasizing fortifying price stability.

Engagement among regulators, market entities, and experts over the past four days has been consistent, laying the groundwork for restoring equilibrium and enhancing tradability. Goudarzi expressed confidence that if this pattern persists, the market will be primed to experience sustainable recovery shortly.

According to Hamid Mirmoayeni, a capital markets analyst, the long-term sentiment of investors is contingent upon broader political advancements, despite the effective support roles played by government bodies and major listed companies. The inflow of capital back into the stock market is less reliant on technical factors and more on the alleviation of political tensions. Mirmoayeni noted that the recent interventions by key government institutions and state-owned enterprises have allayed liquidity concerns, especially for large-cap stocks.

He asserted that at this stage, no new measures are deemed necessary as the current supportive framework has been well-received by investors. With decreased geopolitical uncertainty, there is a possibility of witnessing a resurgence in investment inflows. Market observers highlighted a more positive market sentiment in recent trading sessions, reflecting revived institutional confidence. The TSE’s stabilization strategy, coupled with derivatives instruments and liquidity support, is expected to enhance risk management and shield the market from potential shocks.

Following disruptions caused by regional unrest and significant capital outflows, Iranian authorities now look towards policy consistency and heightened transparency to navigate the path towards recovery. Mohammad Shirijian, the Deputy Governor of the Central Bank of Iran (CBI) for monetary policy, emphasized the banking network’s commitment to supporting the capital market and shareholders through stock market management, in addition to monetary and credit policy tools.

The collaboration between the Central Bank, the Stock Exchange Organization (SEO), and key government figures has resulted in the implementation of crucial decisions to bolster the capital market during continuous consultations. Direct support for the market and the management of banking institutions’ shares like banks under Article 44 of the Constitution constitute a significant part of the banking network’s contribution to capital market empowerment. Shirijian also highlighted indirect support provided by the banking system as part of their commitment to market stability and investor confidence.