SEO targets raising 50% of economy from capital market in 5 years

The head of Iran’s Securities and Exchange Organization (SEO) has laid out ambitious plans to exponentially increase the capital market’s share in the national financing system to 50 percent in the next five years. This move aims to establish the capital market as a critical driver of economic activity, industrial growth, and employment opportunities in the country.

In an interview with Bourse News, Hojjatollah Seyyedi revealed that the organization’s 14th development plan outlines targeted measures to ramp up production. These initiatives kick off with fiscal incentives deeply integrated into the national budget. Furthermore, he highlighted two key components of the government’s production strategy, including the enforcement of the Law on Supporting Production and the formulation of a comprehensive five-part economic development plan by the Planning and Budget Organization (PBO).

Seyyedi also announced the establishment of innovative investment funds within the capital market to bolster production activities. Notably, Murabaha bonds have been introduced to specifically provide essential financing support to small and medium-sized enterprises. The SEO is looking to balance bank loans and capital market resources through a “50-50” financing model within the next four to five years, signaling a significant shift in investment strategies. The launch of initial public offerings for project-based companies and the robust infrastructure for Murabaha bond issuance underscore the capital market’s growing potency.

Investor interest in the Tehran Stock Exchange has been steadily increasing, with daily trade volumes exceeding 20 trillion rials, equivalent to around $4.0 billion, and still on an upward trajectory. Highlighting the pivotal role of the capital market in Iran’s economic landscape, Seyyedi emphasized its crucial contribution to future development endeavors.

In terms of fostering innovation and embracing tech-based entrepreneurship, Seyyedi noted that five knowledge-based and startup companies have already been enlisted on the exchanges, with an additional 25 entities seeking approval. Many of these enterprises have already garnered permits from the Vice Presidency for Science and Technology, signaling a robust influx of new ventures into the capital market.

The ambitious plans set forth by the SEO head underscore the organization’s commitment to transforming Iran’s financial landscape and positioning the capital market as a prominent contributor to economic growth, industrial output, and employment opportunities. With a strategic focus on stimulating production, fostering innovation, and diversifying financing models, Iran’s capital market is poised to play a pivotal role in shaping the country’s economic future.