Iran stock market tanks..gold will go up

[ARCHIVED THREAD] - Iran stock market tanks..gold will go up

Posted: 10/8/2005 6:25:44 PM EDT

How long before the ballon goes up over there?

Traders shun Iran bourse as atomic crisis deepens

TEHRAN, Oct 2 (Reuters) - Investors are bailing out of Iran's stock market, preferring gold and foreign bourses while international pressure ratchets up against Tehran's disputed atomic programme, traders said on Sunday.
The total bourse capitalisation had dropped to $38.2 billion dollars on Sunday, down from $45 billion in late June when conservative Mahmoud Ahmadinejad won a landslide presidential election victory.

The TEPIX all-share index stood at 10,151 points on Sunday, down 27 percent in the 14 months from August 2004, when it stood at 13,880.

"Everything depends on the nuclear negotiations, and the market really craves good news," said Akbar Zarganinejad, the head of a leading brokerage.

Iran stands on the brink of referral to the U.N. Security Council for possible sanctions after failing to convince the world its atomic ambitions are peaceful. Iran insists it needs atomic technology to fuel power stations.

"Unfortunately, the small stockholders' fears can affect the share indices dramatically," Zarganinejad said.

He added the market had taken some solace from the appointment of former Economy Minister Tahmasb Mazaheri as a deputy minister charged with arresting the falls on the Tehran exchange.

Mazaheri held meetings with Tehran bourse officials on Saturday and is due to report to the cabinet on Sunday.

Traders noted Iranians were forsaking investment in housing and stocks for more liquid assets like gold and foreign currencies.

When asked whether there was a particular flight to Gulf-neighbour Dubai, which has recently opened to its bourse to foreign investors, Tehran stock exchange spokeswoman Soheila Mostofi replied: "People could go anywhere else."

"Due to the problems in Iran's markets, people could be attracted to other markets, gold or elsewhere," she added.

The flight of capital is a big set-back for a bourse that soared 116 percent in 2003, making it a haven for investors looking to beat inflation running at about 12 percent.

Tortuous investment legislation means Tehran's bourse is not played much by foreigners, who until recently could not invest directly.

Market authorities announced plans in April to allow foreigners to buy up to 10 percent of firms listed in Iran. However, they would only be able to repatriate their capital gains and profits after three years.

[ARCHIVED THREAD] - Iran stock market tanks..gold will go up

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