The capitalisation of the Tehran Stock Exchange fell below $100 billion for the first time in two years in May, as doubts were raised of a successful deal with the US and its allies.
As if confirming the fears, negotiators are set to miss today’s deadline for concluding a deal, outlined in Lausanne at the start of April, to limit Iran’s nuclear programme in exchange for sanctions relief.
American officials are reportedly hoping to conclude a deal by July 9 so it can be submitted to Congress to review.
“Analysts believe that the progress in negotiations has been insufficient,” writes Turqoise Partners, a Tehran-based asset manager, in explaining the falling stock market.
There are other factors behind the stock market drop. Turqoise Partners reports that the common message from the more than 50 annual general meetings that happened in May was that Iranian companies are facing difficulties with full warehouses, problems in selling products and cash flow difficulties.
“This shows the short-lived recovery of 2014 and the struggle for the Iranian economy to keep the positive momentum in 2015,” says the firm. “This is again linked to the impact of uncertainties coming from the nuclear negotiations which, with no definitive outcome, have, to some extent, limited economic activity.”
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