By Siavosh Ghazi (AFP) – Aug 2, 2010
TEHRAN — Share prices in Iran notched up an all-time high on Monday despite tough economic sanctions world powers imposed on the Islamic republic over its nuclear programme, officials and reports said.
The Tehran Stock Exchange's main TEPIX index gained 1.31 percent to end trading at 16,078 points, on turnover of 172 million shares worth 450 billion rials (almost 45 million dollars), according to the bourse's website.
ISNA news agency said the close represented a record high for the 43-year-old stock market.
The index has now posted a 28 percent jump since March 20, when it reached 12,537 points on the last day of the Iranian year.
The upsurge has come despite sanctions imposed by the UN Security Council on June 9 which were followed by separate punitive measures by the United States and the European Union.
Experts said stocks were boosted by a government decision to sell off 18 percent of its equity in two major automobile companies, Iran Khodro and Saipa Automotive Manufacturing, for 430 million dollars and 1.5 billion dollars respectively.
They said the government's attempts to privatise some top banks and companies have also helped keep market sentiment buoyant.
Tehran Stock Exchange vice president Mohammad Reza Rahbar said an overall lack of investment options was also helping drive share prices higher.
Iranian media reports said the bullish stock market trend is due to prevailing low bank interest rates and investments in the construction sector.
Rahbar also cited some specific measures taken by the bourse which was helping the market, adding that volumes had been buoyant in recent months.
He said the daily volume was worth 45 to 50 million dollars currently.
"The exchange has taken measures to have more transparency in order to boost public confidence. I am optimistic that more investors will enter the market," Rahbar was quoted as saying by Donaye e-Ektesad newspaper.
The market surge comes despite tough economic sanctions imposed by the United Nations and the world powers.
The European Union sanctions are particularly tough as they are designed to strike at Iran's vital energy sector, as well as its banking and transport segments.
They include a ban on the sale of equipment, technology and services to the energy sector, hitting activities in refining, liquefied natural gas, exploration and production.
The Iranian banking sector was also hit by European restrictions, forcing any transactions over 40,000 euros (52,000 dollars) to be authorised by EU governments before they can go ahead.
Some 330 Iranian companies are listed on the Tehran Stock Exchange having a total market capitalisation of more than 75 billion dollars.
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