Top Middle East custodian won’t enter Iran

Keep clear signThe Iranian parliament may have approved a nuclear deal that could relieve western sanctions, but that doesn’t mean banks are ready to support investors in buying equities on the Tehran Stock Exchange.

Speaking to Funds Global MENA at the Sibos conference in Singapore, Cian Burke, global head of HSBC Securities Services (HSBC SS), said his firm had no plans to do business in Iran.

“If one of my colleagues suggested it, I suspect it would be a brief conversation,” he said.

It would not feasible for HSBC SS to begin doing business in the country unless HSBC as a group went there, Burke said.

The news came the same day as the Iranian parliament approved a deal on its nuclear programme with 161 votes in favour, 59 against and 13 abstentions, according to the official IRNA news agency.

Some analysts have said the process for Iranian financial institutions to rejoin the Swift network and become investable to international investors is “a question of flicking a switch”.

However, others say it will take time for western institutions to become comfortable with investing in a country that has been the subject of debilitating western sanctions for many years.

In an interview that will be published in the next issue of Funds Global MENA, Burke also said he was not prepared to enter into a price war with competing custody banks seeking to take business away from HSBC, which is the dominant international custodian in much of the MENA region.

“Our competitors are pricing very aggressively,” he said. “What I won’t do is chase the market to the bottom. I’m not going to operate any of the business at a loss.”

©2015 funds global mena

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