ANNUAL REPORT JUNE 2010
FEDERATION OF EURO-ASIAN STOCK EXCHANGES
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
Iranian capital market experienced a flourishing
year 2009 in the 41st anniversary of Tehran
Stock Exchange (TSE)’s operation, and the
trend is expected to continue in 2010.
Ratification of the securities market law in 2005
was a step to develop the Iranian capital
market, and the subsequent measures
supported the idea. Tehran Stock Exchange
Corporation was established in 2006 as a
demutualised exchange, aiming to set up a
regulated, transparent, efficient and fair market,
and to promote investment in securities and
increase liquidity.
During the previous years, as stated in the law,
the country’s capital market has followed the
establishing of structures for development and
has attempted to provide the required
cooperative grounds among all market’s
participants to create value for direct and
indirect stakeholders.
In this fashion, TSE feels committed to grant fair
mechanism and enough access for the
members and participants to trade securities.
Accordingly, escalating market’s liquidity was
set as one of the main ambitions of TSE.
HISTORY AND DEVELOPMENT
Tehran Stock Exchange (TSE) 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, three years after its
demutualization, which took place on 6
December 2006, TSE has gradually
demonstrated its potentiality as a leading
Exchange in the region and developed into an
ever-growing marketplace, including more than
three hundred listed companies with a market
capitalization of above US$ 60 billion.
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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Great efforts were made during 2009 to
increase liquidity. As a result of some studies at
the Exchange, price daily fluctuation range was
increased for all listed shares and the bigger
issuers’ base trading volume was cut.
Also, final auction mechanism was proposed to
discover the closing price, and single-price
auction was introduced as a means to avoid
market’s fluctuations. Besides, some executive
solutions were suggested to the Exchange and
Securities High Council, the premier body of the
Iranian capital market for approval. Market
making directive was reviewed and more
incentives were added for more participation.
Primary studies have been accomplished on
diversification of trading products. Stock futures
and options are expected to emerge shortly in
the Exchange after the software selection is
finalized. Moreover, launching stock ETFs, as
well as gold-backed ETFs was fully surveyed
and the proposed rulings were sent to SEO for
approval, the market’s regulatory body.
TSE has planned to keep on its growing trend
to build the required foundations and change
trading rules for more facilitated access to a
transparent and fair market, and also will try to
benefit the international bodies’ technical
supports.
TSE welcomed new issuers in 2009. Insurance
companies and oil and gas extraction industry
increased TSE’s sectors to 39 and turned the
Exchange into one of the most diversified ones.
IPOs of three big public banks and insurance
companies increased our market capitalization
to above US$ 58 billion at the end of 2009, a 20
percent rise comparing 2008. Trading value,
with ten percent increase than 2008, reached
the new record of plus US$ 16.8 billion last
year.
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.
insurance companies were traded for the first
time in the Exchange.
For the coming year, introducing derivatives is
in the agenda.
FUTURE OUTLOOK
TSE is planning 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
2009, shares of some state-owned banks and
• Continuation of privatization plan and IPOs of
state-owned companies
• Increasing liquidity in securities market with a
review on trading regulations
• Launching derivatives market and
introducing stock futures and options
• Establishing Islamic bonds and products,
based on market development act and tax
exemption
• Introducing new indices
• Setting up required mechanisms for tracking
frauds and claiming against breach of market
law
• Creating efficient corporate governance and
investor relations frameworks
• Facilitating and expanding market access
by means of developing brokerage network,
e-trading and DMA