FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2009
TEHRAN STOCK EXCHANGE
Despite the widespread financial crisis in the
global market, TSE had the IPO of its largest
ever listed company, Telecommunication
Company of Iran (TCI) in August.
Hassan Ghalibaf
CEO
Based on the new Securities Market Law, ratified in
2005, and in order to found an orderly self
regulated market for trading the securities both by
brokers and traders, Tehran Stock Exchange
Corporation (TSE) was established on 6 December
2006. The shareholders are categorized into three
main groups of brokerage companies, financial
institutes and retail investors – legal and natural
persons. During the past two years of its operation,
the newly demutualized TSE has made great
efforts in launching the necessary entities for
market development. TSE appropriately benefits
the available cooperation grounds with other
participants in the Iranian capital market to thrive
the securities market so that it might fulfill its
principal ideal, which is increasing the share of the
capital market in financing business activities and
creating value for the direct and indirect
stakeholders.
It has been highly endeavored to achieve a
transparent, fair and efficient market. Listed
companies’ reporting improvement, increasing
daily price fluctuation limit and training courses
have contributed market efficiency and pricing,
which considerably lowered the concerns among
market participants. Besides, in the current year
(i.e. 2008), a new listing directive at TSE was
designed and ratified to increase the listing quality.
HISTORY AND DEVELOPMENT
Tehran Stock Exchange Organization was
founded in 1967, by starting with only six listed
companies. Since then, the Exchange has
experienced considerable changes in the path
of development. Today, a quarter before the
second anniversary of its demutualization,
which took place on 6 December 2006, TSE
has gradually demonstrated its potential as a
leading Exchange in the region and developed
into an ever-growing marketplace, including
more than three hundred listed companies.
The mission is setting the agenda for the
change in the Iranian securities markets. TSE
must be more than a mere market facilitator
and ought to be able to guide industries
towards new horizons and greater
opportunities, as it is actually doing through the
strict regulations and listing standards. TSE is
aiming at promoting the Iranian Capital Market
to respond to the socio-economic development
needs of the nation. The Exchange helps and
stimulates industrial, as well as economic
growth and development of the country’s
financial sector. TSE is preparing to maintain a
strong and transparent market in order to give
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To list the state-owned companies, including
issuers in privatization plan, joint workgroups were
formed, which in conclusion, detected the
problems of share offering to the private sector.
Quality and quantity of disseminated information in
this year significantly improved. Securities and
Exchange Organization (SEO) followed
fundamental measures, such as launching Issuer’s
Information Network (Codal), training the senior
financial directors and on-time receiving of
information to improve the Corporations’ Reporting
System. TSE has also introduced two projects:
Investors’ Relationship System and Corporate
Governance System. At the end of December 2008, TSE market
capitalization reached US$ 50 billion, which
includes nearly 10 percent increase, compared
with the same period in 2007. TEPIX, TSE’s all-
shares price index; however, stood at 8,656 units
and dropped about 12 percent on the date,
comparing with its level at the end of the last year.
Establishing Members Department and increasing
the number of trading stations, developing the
Internet trading and revising the structure of
Exchange floors in the provinces have all paved
the way for further public access to the capital
market network. Absorbing foreign investment through launching an
international exchange in Kish Island free zone,
Persian Gulf and revising the existing regulation
are among TSE’s plans. On the whole, it is hoped
that during the year 2009, more liquidity will be
absorbed to the market by establishing market
products and mutual funds and offering further
incentives to the investors.
Statistics and Market Information Department, as
well as Market Surveillance Department provide
required data for the financial analyses and more
efficient monitoring of the trading in order to
prevent price manipulation and abuse of insider
information.
opportunity to the investors to convert their
cash into securities at a fair and honest price
and vice versa, and is developing to become a
highly liquid secondary market for securities to
raise funds and win confidence from all
stakeholders.
TSE is going to operate as a world-class
marketplace for Iranian securities and
derivatives products. It strives to offer issuers
access to a wide national marketplace. It must
make a contribution to Iran’s status as an
economy, which intends to open-up to
international financial centers. By servicing
Iran’s substantial long-term demand for capital
and exchange services in accordance with
international standards and practices, it is
believed that TSE has the potential to become
one of the pre-eminent Exchanges in the
Persian Gulf area.
Privatization, as a priority is both followed by
the State and managed by TSE on the one
hand, to facilitate the economic reforms and on
the other one, to improve and support the
Iranian securities market. In this fashion,
among the floated companies since January
2008, shares of Islamic Republic of Iran
Despite the widespread financial crisis in the
global market, TSE had the IPO of its largest ever
listed company, Telecommunication Company of
Iran (TCI) in August. The value of TCI’s 2.2 billion
shares floating for price discovery in the first day of
trading exceeded US$ 345 million.
TSE has already helped launching OTC (Over the
Counter) Company, which has been established
with a 20 percent ownership of TSE, and is working
for the establishment of Iran Financial Center (IFC),
with the aim of providing appropriate opportunities
and infrastructures in the capital market.
Shipping Lines and Iran Telecommunication
Company (ITC), as two major entities, were
traded for the first time in the Exchange.
Iranian capital market witnessed establishment
of its first OTC stock market during the first half
of 2008. The market will provide facilities for the
smaller or other companies, which are
unqualified to be listed at TSE. Commercial
banks, holding companies, financial
intermediaries, as well as Tehran Stock
Exchange Corporation are among the major
shareholders of the newly established market.
FUTURE OUTLOOK
• Upholding the privatization plan through
state-owned corporations’ IPOs
• Providing shorter settlement cycles and book
entry settlement systems to meet the current
international standards of securities markets
• Providing diverse securities of high quality to
raise funds and liquidate the market (new
products; e.g. Sukuk and ETFs)
• Preparing arrangements to provide new
calculation methods for indices
• Planning to set up Iran Financial Center (IFC)