Baku, Azerbaijan, Sept. 10
By Khalid Kazimov – Trend:
Considering the risk and return concept, Iranian capital market offers chances for higher returns compared to international markets, a market analyst believes.
"If we divide the markets in the world into the three categories of developed, emerging and frontier markets, Iran would be in the third group," Mehrdad Seyyed Asgari, a Norway-based analyst, told Trend.
Investors normally are interested in such markets due to the potential returns and existing growth chances, he added.
He suggests that the relatively inexpensive prices in the Iranian market, has a crucial role in attracting foreign investors.
"In general, the prices of stocks of a particular company in the US markets value about 18 times more than the possible return of those stocks. The average returns in the markets outside the US total about 13 times more than the estimated return of the stocks. This figure for stock markets in Iran is about 7.5 which is below the global standards," he said.
"This means that the stocks of a particular company in Iran are priced below the half of the prices of the stocks of a similar company in the US with the same level of return," he explained.
"Even when the international sanctions against Iran were still on, the return of stocks in Iran’s equity market was two times more than the return of stocks in the US markets," he concluded.
The volume of foreign investment in the Iranian capital market experienced a huge surge, reaching $391.5 million over the last fiscal year ending March 20. The figure in 2013 when President Hassan Rouhani came to office stood at about $35 million.
Although at a slower pace, Tehran Stock Exchange (TSE) extended its positive run over the past Iranian week to September 8. The main index of TSE edged up 0.5 percent, resting at 83,675 on the last day of the trade week.