Iran Fara Bourse Posted
FEAS Secretariat spoke with the CEO of Iran Fara Bourse Mr. Amir Hamooni about the key strategic initiatives of Iran Fara Bourse, traded instruments, crowdfunding campaign, COVID-19 impact, and more.
1. What are the key strategic initiatives IFB is working on at the moment?
Hello everyone, First of all, I also would like to offer my sincere condolences for the coincidence of time with Arbaeen to all human being who love and follow Imam Hossein (peace be upon him), the 40th day since the martyrdom anniversary of him and his 72 apostles. Also, I took the opportunity to extend my warmest congratulations to all market participants around the world especially our dear friends at FEAS for the fourth World Investor Week. WIW stands for Financial Literacy and investor protection, 2 areas which FEAS team focuses the most.
Let’s get back to your question, IFB’s key strategic projects.
IFB’s strategic approach is to concentrate on 3 areas: 1- increase the level of market penetration 2- financial literacy promotion 3- Deploying new technology to facilitate first 2 objectives.
To do so, We have planned and executed lots of projects in last 11 years while gathering sustained, long-term public and legislative support.
Nowadays Deepening our debt market is one of main topics which requires orchestrating a large number of parameters. In sukuk market we are designing structured instruments based on sharia and in compliance with Islamic financial principals. We are pursuing to launch Open Market Operation together with Central Bank. Other Instruments are on their way to launch such as REPO.
Furthermore, as an emerging market it is difficult to raise funds for new ventures and to grow or innovate except as part of existing large companies or conglomerates but we are persistently spelling out a vision with clear and measurable objectives then Translating this vision into concrete economic and social outcomes and crafting specific messages targeted at different stakeholders to realize economic growth. We have now 5 VCs, 2 PEs and 20 ETFs. We still try to absorb more and more application for establishing funds in all sectors. We believe in funds helping mutually its investors and businesses of all sectors.
Also, we are expanding our derivatives market, we are giving license to Equity and reward base crowd funding platform, we are running a hub for FinTechs to get mentoring and financial supports they need, we are launching a Sandbox for FinTechs together with Smart Economy Center of Ministry of Finance, We have eagerness to initiate a dedicated Board for charity and benevolent products and activities, and a lot more.
We believe capital market needs to be further developed, we need to ensure that public faith in the capital market is not eroded due to frauds and scams.
FinTechs can, however, seed important initiatives and debottleneck the development of market-critical infrastructure.
2.What are the most active instruments traded in IFB, have they changed during the last months?
Last week debt securities market trades recorded a value of 183945 billion IRR. It grows from 186405 billion IRR in last month (August). It increased 1.33%. Our debt market value grows 404% just in one year.
Based on September market report trade value of ETFs surged the number of 107528 billion IRR compared to the previous month at a figure of 71686 billion IRR. 50% soared.
In august stock market trades value were 1044030.2 billion IRR. in September recorded value trade at number of 600054 billion IRR. value of trades dropped 42% Stock market grow 300% compare with last year. This month’s statistics displays funds and sukuks are outperforming stocks.
Figures are showing that the markets environment are risk-off as stocks are selling off and investors run for shelter to sukuks or gold.
3. International media keeps reporting that Iran’s stock market begins to fall after an astronomical rise in four months. What is happening in Iran’s market today and what is IFB’s role in recovering, or, helping with the situation?
Coincident with Covid-19 outbreak almost all exchange market faced with a lot of people surrounding brokerages to register for trading accounts. Iranian Market wasn’t not an exception and faced huge number of people in queues for trading. According to statistics 10 million individuals were added to the market participant just in few months. For one of our recent IPOs number of over 3.5 million individual investors participated. In comparison with same time frame in 2019, number of 300,000, it skyrocketed. This kind of sudden spikes in demand and participation drags down qualification and eligibility of desiring participants. Quality of knowledge and sentiment of the market transforms into an emotional unknown atmosphere. In the inflammation of market vulnerability crawls and any event faces exacerbated reaction.
Furthermore, we must be aware of our true role. We provide foundation for pricing and re-pricing of assets and assessment of risk which access is non-discriminatory, prices are transparent and market abuse is penalized. We enforce strong disclosure standards and support high levels of investor protection.
A well-functioning exchange is one that facilitates continuous trading in securities and derivatives, and which provides for the transfer of risk and maximizes the incorporation of new information in the value of financial instruments. This foundation allows market participants to make informed choices placing their orders; confident that executed trades will then be cleared and settled.
The purpose of these markets remains to serve the real economy – to raise capital for businesses, to facilitate the investment of savings, and to transfer risk to the parties willing and able to bear it.
4. Having sustainable and transparent markets is one of the Iran Fara Bourse’s main objectives. What is done and what should be done to ensure that this objective is fully achieved?
It was 7 years ago when we designed our first strategic plan and we set “facilitating a Sustainable Transparent market” as one of our main goal. We developed numbers of strategies and projects to achieve this goal. An integrated Surveillance System, Educating Market Participants, introducing various instrument for every risk appetite, Having ETFs for the first time to support indirect investments, Supporting Start Ups and SMEs to raise fund and boost corporate governance.
And beside all these, we follow sharia rules to set the market. Sharia rules leads Muslims to Invest, To participate in Economic activity with a good intention and it teaches us to put society first when it comes to self-benefit.
In the other hand, we are in cooperation with Iran Financial center, Iranian Association of Islamic Finance and other institution to promote and preach financial literacy for variety of stakeholders, from individuals to listed companies, from start ups to government.
5. In the midst of the COVD-19 outbreak the crowdfunding campaign has been designed to be used to help the Ministry of Health and Medical Education prevent, detect and respond to COVID-19. This was a unique initiative by Iran Fara Bourse. How did you come to the decision to organize this campaign and afterwards was the initiative successful in Iran?
We held many meetings with Ministry of Health and Medical Education officials and asked them for their requirements. At those dire days funding adequate bailout delegated to us.
We deem that an exchange is far more than a market provider. We are made in and grow in society. One hand has no sound. Our social role, we owe to people is to accumulate supports and deliver them to different sectors of the economy, mostly in areas which is out of individuals reach but benefits them the most.
6. Today’s world is facing several challenges and how we all come together as a community will make a difference in moving forward. How are you encouraging your employees to stay positive and to avoid negativity in the workplace?
It wasn’t easy for any company. No one of us could imagine how it is going to impact our business, our people. Back then, we started with reducing and flowing working time for personnel, they could use paid leave if a family member or themselves got the disease, we implement remote work plan since Feb, and we held PCR test for all personnel periodically.
For boosting the spirit, we have online gathering time to time. But we are considering more programs to do.
7. In your personal opinion, what will life look like after COVID-19 pandemic? What are the major challenges that humanity will face in the near future?
A wise man said in every crisis there are lessons to be learnt and opportunities to be discovered. In the midst of COVID, there were businesses who suffered but there were businesses which progressed. It reminds us another time how important is to be resilient, smart and innovative and most importantly “United”.
Our main challenge is environment and ecosystem. And the next is social responsibility.
We have outlined our main goals on this to develop green instrument, and green indices.