FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2013
TEHRAN STOCK EXCHANGE
Hassan Ghalibaf
CEO
In 2011, the global value traded, with little
decrease (0.1), remained relatively stable.
Market capitalization of the global Exchanges,
with significant decrease of 13.6% reached the
figure less than it in 2009. Moreover, according
to the main indices of the Exchanges being
member of the World Federation of Exchanges,
average return of the members had 11.9%
decreases, as compared to the previous year.
The main factors affecting the decrease are
high volatility, global uncertainty created from
sovereign debt crisis. In this year, Exchanges
tried to diversify their financial instruments using
various bonds, exchange traded funds and
other instruments.
Despite of challenges related to implementing
the first phase of targeted subsidies law,
fluctuations in the gold and foreign currency
market and movement of liquidity toward these
two markets and challenges in the international
relations, TSE, against the general trend of the
world market, had a growth of operation indices
last year. Moreover, TSE tried to increase
market transparency and liquidity, diversify
financial instruments, improve surveillance
mechanism and develop the investment culture
within the Iranian society.
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, six 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 and twenty listed companies with
a market capitalization of above US$ 100 billion
(December 2012).
TSE is aiming at promoting the Iranian capital
market to respond to the socio-economic
development requirements 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 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 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.
By servicing Iran’s substantial long-term
demand for capital and exchange services
in accordance with international standards
TSE tried to increase market transparency
and liquidity, diversify financial
instruments, improve surveillance
mechanism and develop the investment
culture within the Iranian society.
In this period, market capitalization and value
traded showed 33.4% and 8.2% growth
respectively. Also, block and retail trades had
34% growth, as compared to the previous year,
which shows liquidity increases in the market.
Listed firms had 82% growth of capital increase,
63% of which was from cash contributions and
receivables. Also, free floats reached from 19%
to 23%. All the above mentioned factors indicate
market transparency, integrity and liquidity.
In order to meet the accountability principles,
have a transparent interaction with
stakeholders, and promote market integrity
and transparency, some effective plans have
been implemented in cooperation with other
responsible institutions, including development
of the calculation directives of corporate
governance index and presentation of it to
Securities and Exchange Organization (SEO),
participation in mechanizing parts of members
oversight and inspection, and enforcement
of discipline regulations of brokers. Other
actions taken by TSE are to revise and update
information rules, to introduce new trading
mechanism, to plan operation of closing
discontinuous auctions and closing trades, and
to plan securities lending mechanism.
and practices, it is believed that TSE has the
potential to become one of the preeminent
Exchanges in the Persian Gulf region and
beyond.
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. Moreover, financing through capital
market is felt as an obligation for the Iranian
economy’s growth and in this fashion, shares of
two banks, two petrochemical companies and
a provider of electronic services were listed and
publically offered in the Exchange in 2011. The
option contracts regulations have been sent to
the Iranian Securities and Exchange Organization
for ratification.
In 2012, TSE held a FEAS event in Tehran. The
second On-site Training Program was held
in Iran, 10-21 November 2012. The two-week
event included different courses and visits at the
Iranian capital market’s entities.
Tehran Stock Exchange was the main host
of the event, and was contributed by Iran’s
Securities and Exchange Organization, Iran
Mercantile Exchange, Iran Farabourse, Central
Securities Depository of Iran, as well as two
investment banks, and three brokerage firms.
As a plan to attract foreign investors, some
conferences have been held including Finance
Opportunities of Listed Firms and Listing
Economic Firms at TSE. During the year 2011
six firms have been listed and offered in TSE.
Also, 4 items of future contracts and 2 items of
participation certificates have been listed in the
Exchange. To develop and support derivatives
market, enhance the trading system and
facilitate the market access, some actions have
been taken, including proposing for mechanism
regulations of credit finance to SEO, seeking
for option trading rules approval, launching
Exchange Traded Funds at TSE and increasing
the number of underlying shares of future
contracts.
Also, some efforts have been made for
development of market awareness and
promotion of financial literacy through targeted
training courses, books, web-sites, seminars
and TV programs in order to help people to
make informed participation in the capital
market.
Five new companies, including two companies
from oil and gas sector, a shipping company,
one insurance company, as well as a banking IT
service provider were listed at the Exchange in
2012. Also, an investment firm was transferred
from Iran Farabourse (SMEs market) to TSE in
the same year.
FUTURE OUTLOOK
• Expanding the country’s capital market
share by increasing the number of listed
companies and improving market liquidity
• Developing new opportunities through
introducing new financial tools
• Continuous evaluation of rules and
regulations in compliance with market
requirements
• Developing financial knowledge and
improving investment and shareholding
culture in Iran by educational programs and
through mass media
• Extending trading infrastructure
• Enhancing market transparency through
upgrading market surveillance and related
IT systems
• Increasing international cooperation and
participation in international associations
• Focusing on development and enhancement
of TSE competitive advantages
The program’s participants were managers
and experts from Oman, Pakistan, Macedonia,
Uzbekistan, Syria, Turkey and Kazakhstan
capital markets.
PAGE 81