TEHRAN: An international sanction notwithstanding, the Teheran Stock Exchange (TSE) has reached its highest record, crossing the 16000 point mark, according to Iranian media reports. The Stock Exchange Index gained 188 points in early Monday trade, manifesting a steady growth over the past two years, reported Press TV, an Iranian news channel. The market has jumped 28 percent since March 20, the report said. The Iranian report attributed the rise to a government decision to sell off 18 percent of its equity in two automobile companies - Iran Khodro and Saipa Automotive Manufacturing as well as by low bank interest rates and declining investment in housing sector. The report came as somewhat of a surprise in the wake of UN Security Council sanctions imposed on Iran on June 9 and subsequent EU and US sanctions. European sanctions prohibit the sale of equipment, technology and services to Iran's energy sector. “The success of the stock exchange is not taking place despite the sanctions, but partly because of them,” said David Butter, regional director of Middle East and North Africa in the Economist Intelligence Unit. He explained that Iran had a market largely driven by local investors, who are currently transferring their funds, formerly invested abroad, back to Iran. These funds were mainly brought from the United Arab Emirates and Dubai, which has made it difficult for Iranians to continue to invest there. Butter cited the crash in the Dubai real-estate market as another reason for heightened investor tension. “Iranians feel their money is safer back home,” Butter said. Dr. Seyed Mohammad Marandi, an associate professor in the University of Teheran, said the flourishing of the Teheran Stock Exchange was a sign “sanctions have not had the affect Western countries had wished for.” “Many in Iran believe the country should have decreased trade with Europe earlier, because the future is in Asia,” Marandi added that the sanctions also diverted Iranian businesses to new markets in Latin America, Africa and the Far East which maintain better relations with Teheran. He added that sanctions also instigated Iranian self-reliance and boosted Iranian research in fields of nano and satellite technologies, stem cells, and military industries. “Without the sanctions, Iran would probably never have developed a high-tech market,” he said. Vanessa Rossi, an expert in International Economics in Chatham House attributed the success of the Iranian stock exchange to high oil prices, as well as a sense of a diminished chance of a military strike on Iran's nuclear apparatus. Rossi said that a ban on purchasing Iranian exports would likely be an ineffective sanction, as was the case in similar attempts in the past. “It is hard to enforce sanctions on countries like Iran that import a homogenous, easy-to-sell product like oil,” she told The Media Line. Rossi agreed that the strength of the Iranian economy was influenced more by local government's management of the economy than by external factors. “The recent criticism of Iran's internal economic policy hasn't seemed to affect the economy's performance,” Rossi added.
