Iran comes in from the cold

After 12 years of crippling sanctions, Iran has lots of catching up to do.

751-iran-634
Investors are eyeing Iran's attractions

"Global investors are never going to see a country of this size and sophistication open up again," says Charles Roberts of Renaissance Capital. The nuclear deal between Iran and the West promises to give investors access to an economy bigger than Thailand's and with oil reserves rivalling Canada's. And after 12 years out in the cold, thanks to crippling sanctions, it will have lots of catching up to do.

"The impact on domestic consumption, investment and trade in Iran would be enormous," say economists Khatija Haque and Jean Paul Pigat on Bloomberg. Emirates NBD reckons that annual growth could reach 8% after 2016.

There is far more to this story thanoil, says Andrew Critchlow in TheDaily Telegraph. Iran has developed a broad industrial base, with a car industry that produces over a million vehicles a year, while investors are also eyeing up petrochemicals and engineering.

The population numbers around 80 million and half of university students are female. The stockmarket, meanwhile, is one of the region's largest, with a market capitalisation of $100bn and around 300 listed companies. The market is now worth just 28% of GDP, a far lower figure than in most other countries.

"If Iran transitions from a fringe market to an open one with a size commensurate with its economy, the upside could be huge," says Asa Fitch in The Wall Street Journal. Charlemagne Capital plans to set up a fund providing access to Iran with Turquoise Partners, a Tehran-based investment group, in the near future.

Recommended

I wish I knew what an emerging market was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what an emerging market was, but I’m too embarrassed to ask

This week's “too embarrassed to ask” explains what emerging markets are, and why you might want to invest in them.
9 Sep 2020
Bullish investors return to emerging markets
Stockmarkets

Bullish investors return to emerging markets

The ink had barely dried on the US-China trade deal before the bulls began pouring into emerging markets.
27 Jan 2020
Beware the hidden risks when investing in emerging markets
Investment strategy

Beware the hidden risks when investing in emerging markets

Emerging markets look cheap compared with developed countries, but earnings may be less trustworthy.
23 Dec 2019
Emerging markets: buy when the news is bad
Emerging markets

Emerging markets: buy when the news is bad

Emerging markets are being squeezed by local turmoil and by more general factors. But bad news can spell opportunity for investors.
5 Nov 2019

Most Popular

The rising dollar is proving bad news for most other assets – will it last?
Investment strategy

The rising dollar is proving bad news for most other assets – will it last?

Precious metals, stocks and pretty much every other asset has taken a tumble as the US dollar strengthens. Dominic Frisby looks at how long this trend…
23 Sep 2020
The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020
Why you should stuff your end-of-pandemic portfolio with Chinese stocks
China stockmarkets

Why you should stuff your end-of-pandemic portfolio with Chinese stocks

For an end-of-pandemic portfolio, you need assets that can cope with today’s volatility. And that, says Merryn Somerset Webb, means Chinese stocks.
14 Sep 2020