Iran comes in from the cold

published 17 July 2015

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.

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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.

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.