Some $1 billion in foreign money -- equal to 5 percent of all money in frontier markets - may be directed to Iran’s stock market in 2016, according to Renaissance Capital’s chief economist Charles Robertson.
Investors may prefer the car industry, manufacturing, energy and agriculture, the economist said. Renaissance estimates relatively cheap labor costs -- in some sectors lower than in China -- can make Iran’s manufacturers attractive to foreign investors, according to analysts and fund managers who visited Tehran in May.
Low energy costs would benefit cement and steel companies, and mobile-phone penetration of 105 percent makes the telecommunications industry a potentially profitable area, according to Turquoise Partners.
The Tehran Stock Exchange (TSE) is the country’s main equities market. In the 12 months to Aug. 3, its main board of shares declined 11 percent. Market capitalization is about $95 billion. From the start of the final round of nuclear talks on June 26, the market has climbed 3 percent.
Iran’s largest trade partner in the first quarter of the current Iranian year was China, which imported more than $1.9 billion in goods. Iraq followed with $1.5 billion and the United Arab Emirates was No. 3 at about $1.3 billion