Removal of sanctions: a chance to invest in Iran Mercantile Exchange

Baku, Azerbaijan, Jan. 7

By Farhad Daneshvar - Trend:

Iran has entered the 2016 with the good news of the removal of banking sanctions on exporting petrochemical products - a gift to Iranian banking sector, petrochemical industry and its Capital Market in particular the Mercantile Exchange.

On the second day of the New Year, Iranian sources reported that after five years of sanctions on the Islamic Republic's banking system, Tehran finally received payments for exports of its petrochemical products through an international bank in Spain, a breakthrough for both Tehran's petrochemical industry and the financial system as well.

Petrochemicals and oil based products alongside with a range of agricultural products as well as metal and minerals are traded in Iran's Mercantile Exchange (IME). The recent removal of sanctions on Iran's banking system can be considered as a green light for foreigners to think of investing in the IME.

Iran's Foreign Minister Mohammad Javad Zarif has also vowed the removal of rest of the sanctions in the coming days which is expected to pave the way for foreigners to invest in the country and its commodities exchange of the IME.

Iran Mercantile Exchange was established in September 2007, following the merger of the agricultural and metal exchanges of Tehran. Trades in the IME are carried out in the spot, derivatives and secondary markets.

According to the Regulations Governing the Foreign Investment in the Exchanges and Over-The-Counter (OTC) Markets, foreigners wishing to invest in Iran's capital market have to obtain a trading License from the Securities and Exchange Organization (SEO).

The IME announced that about $124 million worth of various commodities weighting over 0.292 million tons were traded in its domestic trading and exports halls between Dec. 26-31.

IME Total Market Data Dec.26.2015 - Jan. 6.2016

Meanwhile, in December 2015, 1.42 million tons of different commodities were traded on domestic and export trading floors, including 0.814 million tons of various commodities worth more than $357 million in oil and petrochemical trading floor, 0.594 million tons of different products worth approximately $226 million in metals and minerals trading floor, and approximately 0.109 million tons of agricultural products worth $23 million in agricultural trading floor in the spot market.


Officially, products and commodities are listed and traded in the IME in three classifications: Industrial Products and Commodities, Oil Products and Petrochemicals as well as agricultural products.

Ferrous and non-ferrous metals such as steel, different types of cement, coke, precious metals concentrate, and other basic products are traded in the industrial products and commodities classification in the industrial trading session from 10:30 to 12:00 (GMT+3.5 hours), in metals and minerals trading floor through semi electronic open outcry. Gold bullions are traded from 12:00 to 12:30 (local time) in the same trading floor.

The trades of oil products and petrochemicals are carried out from 13:30 to 16:00.

Products such as cereals, oilseeds, oilcakes, wheat, feed wheat, feed barley, yellow corn, maize, raisin, lentil, chick peas, sugar, meat, eggs, saffron and pistachio are traded in Agricultural classification in the fully electronic multi-commodity trading system.

Offerings and orders

Offerings of the commodities in the spot market are announced and notified 24 hours, before the trading takes place, through the exchange website so the sellers and clients would be able to place their orders with the brokers and rest assured for trading to be matched and cleared.

In the derivatives market the clients order their trades as per specifications of the futures contract and in accordance to the order types specified in terms of order validity and the price.

Tradable contracts in IME:

Seven types of contracts including cash, forward, credit and futures facilitated trade in the IME based on the settlement and clearing terms as well as conditions mentioned in the offering notice of the traded commodities.

1-Cash Contract

In this type of contracts, the buyer is obliged to pay in cash the total contract value in addition to broker's commission fees, and the seller is required to deliver the commodity within 3 days.

2-Forwards Contract

In this type of contract, the whole contract value is paid by the buyer and the seller is committed to deliver the product in specified date and time. This type of contract is considered as a financing instrument for sellers.

3-Credit contract

In this kind of contract, the product is delivered to buyer immediately, and its value will be paid to seller in maturity date. This type of contract is considered as a financing instrument for buyers.

4-Futures contract

Futures contract is a kind of contract in which the seller is committed to sell a certain amount of product at a given price in maturity date and in contrast, the other party undertakes to buy the product with the same characteristics in maturity date. In order to have both sides fulfill their obligations, they shall deposit a certain contract value as collateral to clearing house and in accordance with futures price fluctuations shall adjust the initial collateral. On their behalf, the clearing house can give the possession of a part of collateral to the other party as "concession of the occupation". The juridical meaning is that both parties permit clearing house to tenure the collateral.

5-Call Option Contract

A call option contract is a contract giving the holder the right, but not the obligation, to buy a specified amount of a commodity or a commodity-based security at a specified price within a specified time from the owner. The owner will be committed to sell the commodity or the commodity based security on holder's request.

6-Put Option Contract

A put option contract is a contract giving the owner the right, but not the obligation, to sell a specified amount of a commodity or a commodity based security at a specified price within a specified time to holder. The holder will be committed to buy the commodity or the commodity based security on owner's request.

7-Standard Parallel Forwards Contract

It is a kind of contract in which a given amount of commodity will be sold based on standard parallel forwards contract features. The contract value shall be paid in accordance with contract in settlement deadline and the commodity shall be delivered in maturity date. The buyer can sell the equivalent amount of purchased commodity via standard parallel forwards contract.


According to Iranian law ten percent (10%) of income tax gained from sale of the commodities listed on the commodity exchanges and ten percent (10%) of the income tax of the companies whose shares have been listed for trading on the domestic or foreign exchanges and five percent (5%) of the income tax of the companies whose shares have been listed for trading on the domestic or foreign OTC markets shall be exempted with the approval of the SEO as of the listing year to the year during which they have not been de-listed from the listed companies on such exchanges or markets.

The companies whose shares are listed for trading on the domestic or foreign exchanges or on the domestic or foreign OTC markets shall enjoy a tax exemption for doubling the afore-mentioned exemptions provided that they have at least twenty percent (20%) free-floating shares at the end of their fiscal year as confirmed by the SEO.

Subscribe to Trend in Google News! Subscribe
Cavushoglu and Israel's Lapid hold phone call
Cavushoglu and Israel's Lapid hold phone call
Israel signs $3.4 bln submarines deal with Germany's Thyssenkrupp
Israel signs $3.4 bln submarines deal with Germany's Thyssenkrupp
Israel sticks with 4th vaccine shot, sees Omicron wave waning in a week
Israel sticks with 4th vaccine shot, sees Omicron wave waning in a week
Loading Bars
MFA of Kazakhstan issues statement on European Parliament resolution on situation in country
Japan approves Pfizer's COVID-19 vaccine for children aged 5-11
2022 can be called the year of investments in Karabakh - Country Managing Partner of PwC (Interview) (PHOTO/VIDEO)
16,284 more COVID-19 cases reported in Kazakhstan
China, Russia delay U.S. bid to sanction North Koreans at U.N.
Turkey confirms 71,843 daily COVID-19 cases
New vaccine passport rules in France to come into power from next week
U.S. FAA approves 78% of planes for low-visibility landings near 5G airports
Gloomy Netflix forecast erases much of stock's pandemic gains
Turkey, El Salvador sign 6 agreements during Bukele visit
Austria becomes first country in Europe to mandate COVID-19 vaccination for all adults
Google launches fresh appeal to overturn $2.8 bln fine at top EU court
Russian, Iranian top diplomats confirm commitment to Vienna talks to restore JCPOA - MFA
Gas prices in Europe above $900 per 1,000 cubic meters
Tehran offers swap of Russian gas from Azerbaijan to southern Iran
Czech Development Agency eyes launching new projects in Georgia in 2022
Sudan military chief Burhan announces ministerial appointments: Sovereign council
Azerbaijani FM discusses issues of bilateral cooperation with Austrian minister
Azerbaijani FM meets with OPEC Secretary General (PHOTO)
UN General Assembly adopts resolution condemning Holocaust denial
Cavushoglu and Israel's Lapid hold phone call
Iran, Russia reach agreements in oil and gas sector, says minister
Children over 5 years old allowed to be vaccinated against coronavirus in Uzbekistan
Ankara expects to host Putin-Zelensky meeting - Erdogan
Turkey, Qatar agree on ensuring security at Kabul airport
Turkish Parliament speaker pays tribute to memory of martyrs of Azerbaijan's January 20 tragedy
Georgia slightly decreases imports of petroleum gases from Azerbaijan
US will keep probing diplomats’ health incidents: Blinken
Georgia shares data on cement imports from Azerbaijan
Kazakhstan Railways opens tender to buy spare parts
Azerbaijan's metallurgical production increases
Cost of manufactured computers up in Azerbaijan
Central Bank of Turkey makes decision on key rate
President Ilham Aliyev receives Advisor to French President's Cabinet and EU Special Representative for South Caucasus (VIDEO)
January 20 tragedy laid foundation for Azerbaijanis' struggle to restore their statehood and independence
Azerbaijan shares data on number of vaccinated citizens
Price indexes of industrial, trade sectors at Uzbek stock exchange rise
Azerbaijan confirms 1,186 more COVID-19 cases, 582 recoveries
Turkish VP tweets about anniversary of Azerbaijan's January 20 tragedy
Kazakhstan talks persons not eligible for support on loan deferrals, write-offs
Uzbekistan’s Bukhara oil refinery discloses volume of its production in 2021
Turkmen enterprise releases its first tablets and smartphones
Azerbaijan is beneficiary of recovery trend in hydrocarbon market - Gazprombank
Technical specifications of Azerbaijan’s Khizi-Absheron power plant revealed
Uzbek Central Bank makes decision on its main rate
Azerbaijan boosts oil exports to Georgia
State Statistics Committee discloses cost of machinery, equipment produced in Azerbaijan
Cars re-export from Georgia to Azerbaijan increases
Uzbekistan’s gas chemical complex reveals volume of its products for 2021
Kazakhstan unveils value of vehicles insurance over 11M2021
Kazakhstan reports increase in monetary base value
Kazakhstan's first president to retain right to speak at parliament and government
Azerbaijani Executive Power in Baku opens tender for purchase of truck spare parts
Tesla Berlin factory to elect works council on Feb 28
Kazakhstan to introduce two alternative ways to repay deferred payments
Introducing hydrogen as energy carrier can raise energy security risks
Impact of large-scale protests in Kazakhstan yet to play out - WoodMac
Azerbaijan's State Agency for Use of Mineral Resources opens tender on survey services
India’s cumulative COVID-19 vaccination coverage exceeds 158.88 Cr
PM Modi to host first ever India-Central Asia Summit in virtual format on Jan 27
Indian NSE world’s largest derivatives exchange for 3rd straight year
Artel launches Innovative Educational Center in Tashkent
Uzbekistan shares data on industrial production in 2021
Events held in Azerbaijani army, dedicated to January 20 tragedy (PHOTO)
Guides to accompany passengers of bus trips to Azerbaijan’s liberated Aghdam, Shusha cities
Can hydrogen market be cartelized?
Azerbaijani NBCO eyes boosting car loan portfolio
Memory of January 20 tragedy victims honored in Azerbaijan's Shusha (VIDEO)
Indian economic recovery yet to attain durability: Icra
Russia records another 38,850 coronavirus cases, highest daily number since Nov 13
PM to launch India-assisted projects with Mauritius counterpart Jugnauth today
Rapid growth of hydrogen to underpin rising demand for nickel, zirconium
Azerbaijani State Border Service to purchase building materials via tender
Iran’s CBI discloses data on balance of bank loans
Uzbek Statistics Committee reveals amount of construction work done in 2021
Azerbaijan's minister of health talks quarantine regime
Turkmen garment factory ramps up production
Iran reveals COVID-19 data for January 20
IEA expects Azerbaijan to increase oil output in 2022
Turkish MoD shares publication on anniversary of January 20 tragedy in Azerbaijan
Work related to Armenia's environmental crimes in Azerbaijan's Karabakh in progress - ministry
Iran’s Bahar Azadi gold coin price continues to rise
Turkish, Armenian special reps to discuss confidence-building measures - FM
IEA evaluates Azerbaijan’s OPEC+ compliance
Kazakhstan crude and condensate production estimated to go up in 2022
European Hydrogen Backbone joined by six more companies
Swiss Expo inks solar power purchase agreement in Poland
Кazakh Electricity Grid Operating Company opens tender to buy spares for vehicles
Turkmenbashi refinery opens tender to purchase necessary equipment
EBRD to allocate loan for Turkey’s renewable energy sector
Azerbaijan develops action plan to provide liberated areas with internet
Georgia shares data on trade turnover with Azerbaijan
Russian MFA talks about expansion of transport corridors within GUAM
Recognise ‘Hinduphobia’ and violence against Buddhists, Sikhs too: Indian envoy to U.N.
Work related to Armenian crimes against Azerbaijanis continues - Prosecutor General
Momentum in India's favour, need to prevail over COVID-19: Deloitte CEO on economic development
Central Bank of Iran shares data on exchange of bank checks countrywide
Proud to hold TEKNOFEST int'l aviation, space, technology festival in Azerbaijan - Turkish Baykar Makina
EU special rep for South Caucasus to visit Azerbaijan
Iran boasts potential to vastly increase exports to Russia
All news