Tehran Stock Exchange
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The Tehran Stock Exchange (TSE) (Persian: بورس اوراق بهادار تهران) is Iran's largest stock exchange, which first opened in April 1968. The TSE is based in Tehran. As of December 4, 2005, a total of 419 companies with a market capitalization of 327,417 billion Iranian rial were listed in TSE .
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[edit] History
The idea of having a stock exchange to speed up the process of industrialization in Iran dates back to 1936, when Bank Melli Iran completed a report working out the details for the formation of a stock market and laid down the preliminary foundations. The outbreak of the World War II and subsequent economic and political events delayed the establishment of the stock exchange until 1967 when the Stock Exchange Act was ratified. The Tehran Stock Exchange (TSE) opened in April 1968. Initially only Government bonds and certain State-backed certificates were traded in the market. During 1970's the demand for capital increased the demand for stocks. At the same time institutional changes like the transfer of shares of public companies and large private firms owned by families, to the employees and the private sector led to the expansion of the stock market activity. The restructuring of the economy following the Islamic Revolution in 1979 expanded public sector control over the economy and reduced the need for private capital. At the same time the abolishment of interest-bearing bonds terminated their presence in the stock market. As a result of these events, the TSE started a period of standstill. This came to an end in 1989 with the revitalization of the private sector through privatization of state-owned enterprises and promotion of private sector economic activity based on the First Five-year Development Plan of the country. Since then the Stock Exchange has expanded continuously.
[edit] Structure
The TSE Council is the highest authority in the stock exchange. State officials as well as the private sector representatives and specialists are members of the Council. The Governor of the Central Bank, Bank Markazi Iran, presides over the Council. Other constituent organs of TSE are Acceptance Committee, Arbitration Board and Brokers Organization. The Board of Directors of the latter is the highest policy-making authority in TSE and appoints the secretary general as the chief executive officer for a period of two years. Re-appointment is permitted without any restriction. There are two Senior Deputies acting under the Secretary General who are responsible for economic and technical affairs and administration and finance respectively.
[edit] Operations
Trading in TSE is based on orders sent by the brokers. Trading hours are 9:00 a.m. to 12:30 p.m. Saturday through Wednesday. A CDS is operating in TSE and the clearing process is automated. Based on the new Capital Market Law, the post-trade activities including clearing settlement, depository, and registry activities would be performed by an independent company named Iran CSD Company.
The Tehran Stock Exchange Services Company (TSESC) is in charge of computerized site and supplies computer services. Presently, TSE trades mainly in securities offered by listed companies. Equities and Corporate Bonds are being traded at TSE at the moment. The plan is to introduce other financial instruments in the near future.
The introduction of project-based participation certificates that bear a fixed annual return during the period of the project and promise the final settlement of the profit at the date of its completion, has diversified the market.
TSE is a full member of the World Federation of Exchanges (the former Federation Internationale des Bourses de Valeurs or FIBV) and a founding member of Federation of Euro-Asian Stock Exchanges (FEAS). TSESC is also an affiliated member of FEAS and also a member of Association of National Numbering Agency (ANNA).
[edit] Performance
As of December 4, 2005, a total of 419 companies with a market capitalization of IRR 327417 billion were listed in TSE. With its stunning performance in the last five years, the TSE has astonished and fascinated global financial analysts. While the overall indices of the world’s five major exchanges – New York, London, Paris, Frankfurt and Tokyo plunged by 40 to 70% between March 2001 and April 2003, the TSE index (Tepix) bucked the trend by going up nearly 80%. Given this eye-popping record, some seasoned market gurus have been tempted to suggest that the TSE is really a place to be.[1]
[edit] See also
[edit] References
- ^ The Tehran Stock Exchange: A Maverick Performer?, Middle East Economic Survey, May 23, 2005
