Iran stock fever reaches London
Uk firms rush to put together funds to allow investors to buy Iranian equities
Afinal deal that removes international sanctions against Iran may still be months away, but foreign investors aren’t waiting to pile into the market.
London-based money managers including Charlemagne Capital Ltd and First Frontier Capital Ltd are putting together sanctions-compliant funds to allow investors to buy Iranian equities ahead of the buzz that they expect a final agreement would generate.
While there’s the possibility, of course, that the preliminary pact Iran carved out with global powers doesn’t lead to a full-fledged deal, the money managers are in essence saying they’d rather run the risk of arriving too early than miss a rally in Tehran’s $110 billion (Dh403.7 billion) equity market. Relief from economic sanctions may triple growth by removing barriers to the nation’s oil exports and ending the isolation of its banks from the global financial system, according to Dominic BokorIngram, a portfolio Charlemagne.
“We want to make sure our portfolio is exposed to companies that take advantage of that economic growth,” Bokor-Ingram said by phone on Monday. “We hope to have a product in
adviser
at the next few weeks.”
Initial signs of a rally have already begun to emerge.
The benchmark index of Tehran-listed stocks has gained 3.6 per cent this month as negotiators agreed to seek a final deal by June 30. The rebound comes after a 17 per cent slump in the 12 months through March as the talks stalled repeatedly, undermining confidence that President Hassan Rouhani could end decade-long sanctions. Even amid the standoff, the gauge jumped 300 per cent in dollar terms in the five years through 2013.
Charlemagne projects that Iran’s economy could grow between 6 and 8 per cent without the burden of sanctions, compared with estimates of between 1 and 3 per cent in 2014.
Templeton Emerging Markets Group Chairman Mark Mobius said in an interview on Bloomberg TV this month the “thriving” stock market in Tehran offers many opportunities, including consumer stocks.