Tehran Stock Exchange

Tehran Stock Exchange
Name	Tehran Stock Exchange
Native name	بورس اوراق بهادار تهران
Type	Stock exchange
City	Tehran
Country	Iran
Founded	23 April 1967
Currency	Iranian rial (IRR)
Indices	TEDPIX

Tehran Stock Exchange. The Tehran Stock Exchange is the largest stock exchange in Iran and a principal component of the nation's financial market. Established in the 1960s, it facilitates the trading of equities, corporate bonds, and government securities. The exchange plays a critical role in capital formation for Iranian industries and is a key barometer for the country's economic conditions.

History

The establishment was formally approved by the Iranian Parliament in 1967, with initial operations commencing in 1968 under the guidance of the Ministry of Economy. Its early growth was slow, with only a handful of companies like the Iranian Tobacco Company and Iranian Cement Company listed. Activity surged following the Iran–Iraq War as the government of Akbar Hashemi Rafsanjani initiated a privatization program, transferring state-owned enterprises to the public. Major developments continued under the presidency of Mahmoud Ahmadinejad, who promoted the exchange as an alternative to a banking system constrained by international sanctions. The market experienced significant volatility during the administrations of Hassan Rouhani and Ebrahim Raisi, influenced by factors such as the Joint Comprehensive Plan of Action and renewed U.S. Treasury sanctions.

Operations and structure

Trading occurs through an automated system from Saturday to Wednesday, aligning with the Iranian calendar. The market is divided into several boards, including the First Market for large-cap firms, the Second Market for mid-sized companies, and the Fara Bourse for smaller ventures and over-the-counter trading. Key operational entities include the Securities and Exchange Organization, which acts as the main regulator, and the Central Securities Depository of Iran, which handles clearing and settlement. The exchange's infrastructure has evolved to include electronic trading platforms, though it remains influenced by foreign exchange policies set by the Central Bank of Iran.

Indices

The primary benchmark is TEDPIX, a capitalization-weighted index that tracks the performance of all listed companies. Sector-specific indices monitor industries such as petrochemicals, automobiles, and banks, providing insights into key segments of the Iranian economy. Other important indicators include the TSE 50 Index, which focuses on the top fifty firms by liquidity and market capitalization, and the Overall Index, which has historically been used to gauge market trends. These indices are calculated and disseminated by the exchange's management.

Listed companies

Major listings include conglomerates like the Iran Khodro and SAIPA automotive giants, as well as leaders in the petrochemical sector. Key financial institutions such as Bank Mellat, Bank Tejarat, and Bank Saderat Iran are also prominent constituents. The mining and metallurgy sector is represented by entities like the National Iranian Copper Industries Company, while telecommunications is dominated by the Mobile Telecommunications Company of Iran. The composition reflects the state-led privatization efforts that transferred assets from the Iranian government to public shareholders.

Market performance and milestones

The market witnessed a dramatic bull market in the early 2020s, with TEDPIX reaching record highs amid high inflation and a weak Iranian rial, which drove investors from real estate and foreign currency into equities. Significant milestones include the massive initial public offering of Social Security Investment Company holdings. Performance has been heavily impacted by geopolitical events, including the assassination of Qasem Soleimani, the COVID-19 pandemic, and periodic negotiations over the Iran nuclear deal. Periods of sharp decline have often coincided with new sanctions from the European Union or the United States Congress.

Regulation and oversight

The primary regulator is the Securities and Exchange Organization of Iran, which operates under the authority of the Ministry of Economy. This body is responsible for drafting securities law, approving public offerings, and monitoring for insider trading and market manipulation. Governance of listed companies is guided by the Iranian Corporate Governance code, while auditing standards are set by the Iranian Association of Certified Public Accountants. The regulatory framework interacts with broader economic reform policies and must navigate the complexities of the international financial system due to sanctions against Iran.

Category:Stock exchanges in Iran Category:Economy of Iran Category:1967 establishments in Iran Category:Financial services companies established in 1967