Baku, Azerbaijan, Nov. 8
By Farhad Daneshvar – Trend:
Capital market firms in Iran are not in a proper situation in terms of profitability due to international and domestic crises, an Iranian economic expert told Trend.
Alireza Kadivar, a financial analyst and deputy head of Iran’s Novin Investment Bank, says the country has been hit by recession and the demand for commodities in the domestic market has dropped over the recent months.
In the meantime, the amount of government budget allocated to development projects has decreased in the current year.
On the other hand, the global prices of commodities have shrunk, he added.
As a result of the aforementioned factors most of Iranian capital market firms have failed to demonstrate a proper performance in terms of profitability forecast.
Iranian financial experts have suggested that the country’s capital market is currently experiencing its longest period of recession as the profitability forecast for the capital market firms has continuously plunged over the past three years.
The profitability forecast was set at 65 trillion rials ($1 makes 31,865 rials according to official rate on Nov. 8) in the Iranian calendar year of 1393 (March 2013-2014), 58 trillion rials in 1394 (March 2014-2015) and 46 trillion rials in 1395 (March 2015-2016).
According to official announcements, while banks attract 90 percent of investment at Iran’s financial market, 2 percent goes to capital market and the insurance market lures in 8 percent.