How much of the promise of government support for the capital market was fulfilled?

According to Tejarat News, according to a capital market expert, four clauses of the government’s decree on supporting the capital market have been implemented so far. What are these four clauses?

Young Journalist Club Today’s economic table program with the theme of “pursuing government support for the capital market” and attended by capital market expert Homayoun Darabi, Hossein Salahvarzi, member of the Supreme Council of the Stock Exchange and representative of the Chamber of Commerce, Mohsen Ansari, Director of Publishers Supervision of the Stock Exchange and Securities Organization Alireza Mir Mohammad Sadeghi, Member of the Executive Board and Deputy Minister of Banking and Credit of the National Development Fund, was held and the following questions were answered.

How was the capital market trend in the first quarter of this year?

Darabi Capital Market Expert: We have seen a positive trend due to government approvals; The overall index has grown by nearly 15 percent since the beginning of the year, but the capital market could have experienced a much better situation.

This year, we have good conditions in terms of macro variables affecting the market; Because oil trades above $ 100 a barrel, petrochemicals and raw materials also have high prices in world markets. Despite all these big positive variables, contradictory events and news due to some decisions, caused the market to not reach where it should.

Arming a member of the Supreme Council of the Stock Exchange: In the spring of this year, the market has been somewhat balanced, which has been caused by various reasons, including increasing the volatility range from 5 to 6 for companies listed on the stock exchange and OTC market and restoring some public confidence.

Over the last one to two weeks, for reasons that are somewhat justifiable, we have seen a number of fluctuations; Among other things, many symbols have been stopped from holding their meetings or there were ambiguities in the automotive and petrochemical industries.

How much of the previous government’s decree and the new government’s decimation decree were implemented to support the capital market?

‌ Darabi Capital Market Expert: The previous government approvals were not implemented at all; With the holding of the presidential election, the capital market index witnessed a growth, but after that, due to the interest rate situation, this index began to decline until the discussion of the government’s decimation decree, which was almost four paragraphs of this decree. Has been implemented.

The clause on the 5% exemption for manufacturing companies was mentioned in the budget, but on the other hand, the export tax exemption was abolished and export duties were imposed, and there was also a 20% gap between the half exchange rate and the free exchange rate. These events gave companies some relief, but reduced much of the revenue of export companies. Contradictory news about export duties reduced companies’ willingness to export and import foreign currency.

The petrochemical feed section also had a positive impact on the market; Twelve-month reports show that in the winter, some petrochemical companies lost money despite the attractive global markets. Also, the clause on mining rights and the clause on the impact of foreign currency assets of banks have been implemented.

To what extent did the implementation of government decrees have a negative impact on the performance of listed companies?

Arming Member of the Supreme Council of the Stock Exchange: One of the factors in the relative stability of the capital market was that politicians commented less on it. The clauses of this decree, especially the invitation of the head of the stock exchange organization to economic meetings, have been mainly implemented or are being implemented, but there are some objections to it.

Regarding the clause in this year’s budget law, which was supposed to increase the capital of companies from zero undivided profit, it is subject to zero tax. Yesterday, a meeting was held in the Article 12 Committee on this issue, and we came to the conclusion that another inquiry should be taken from the Islamic Consultative Assembly.

How do you assess the implementation of the government’s decimation to support the capital market?

اری Ansari, Director of Supervisors of Publishers of the Stock Exchange and Securities Organization: The important clauses of the Decade have been implemented to some extent, but there are a few clauses that have not yet been finalized; For example, it was approved that 30,000 billion tomans, in addition to the previous bonds, be deposited in the stabilization fund, for which only 5,000 billion tomans were considered in the budget.

The legislator has approved the transfer of 5,000 billion tomans to the stabilization fund, but follow-ups are underway to fully implement the decree.

The 5% exemption for companies, although approved, has not yet been formally announced and its implementation mechanisms are not clear to companies. We have corresponded with the tax administration to do the same; In addition, in the weekly meetings with this organization, we are constantly reminding this paragraph of the resolution and we hope that the announcement of the mechanisms by the Tax Affairs Organization will be implemented in the next one to two months.

The National Development Fund was supposed to have deposits, where did it go?

اری Ansari, Director of Supervisors of Publishers of the Stock Exchange and Securities Organization: This section has not been done yet and I do not know how much deposit has been made. In general, there are three decimals to be implemented.

Why is the opinion of the stock exchange organization different from the opinion of experts, and what other clauses should have been implemented to support the capital market that have not been implemented?

‌ Darabi Capital Market Expert: Deposit of stock sales tax to the account of the Development and Stabilization Fund has not been implemented yet; Also, the issuance of bonds should be equal to 50% of the capital market input sources. During the first three months of this year, 45,000 billion tomans of securities were issued, of which 30,000 billion tomans were cash issuance; That is, only about 46% of the 103 thousand billion toman program has been implemented this year.

Ansari, Director of Publishers Supervision of the Stock Exchange and Securities Organization: The issuance of securities since the beginning of the year has not been a very significant amount, but in general, it has not been implemented.

Has the issuance of the papers been trivial?

‌ Darabi Capital Market Expert: The importance of this issue is different for different capital market actors; But in general, the decree states that 50% of the capital market input should be allocated to the issuance of securities, which was not implemented.

What are the effects of the incompatibility of the government’s decimation decree with its implementation?

Ansari, Director of Supervisors for Publishers of the Stock Exchange and Securities Organization: To expect this decree to be implemented soon is somewhat out of the ordinary and time-consuming process; We hope that the issue of taxes and bond issuance will be resolved soon.

How much pressure do manufacturing companies and exporters have on liquidity this year?

‌ Capital Market Expert Darabi: Interbank interest rate has reached 28% and is increasing every week; Also, the rate of various types of securities and securities from the central bank has reached 22 percent, which means that it is up to 23 and 24 percent for banks to receive deposits and money does not enter the market.

Companies are under pressure in terms of working capital, and if interest rates continue to rise, it will put more pressure on companies; Because since the beginning of the year, about 270 thousand billion tomans of resources have been deposited in banks. Of this amount, 240,000 billion tomans is allocated to facilities and still, 30,000 billion tomans more sediment is seen than the deposits received by banks in the banking system.

Armament Member of the Supreme Council of the Exchange: We have a serious problem in the country where good decisions are made, but at the same time, a number of other decisions are made that either neutralize the rest of the decisions or have the opposite effect.

For example, at the same time as removing the 4,200 Toman currency, the wage increased by 57%, the cost and duties of the freight bill of lading increased from 4% to 9%, and the energy carriers also increased the price. ETS rate changed. The issue of the 5% tax exemption was similarly challenged by export duties.

Also, ill-considered comments are the next problem; In the automotive industry, for example, various government executives commented on the blockchain supply of automakers’ shares, causing ambiguity and a negative impact on the market.

What is the stock exchange organization’s estimate of the time for the full implementation of the decimation decree?

اری Ansari Director of Supervisors of Publishers of the Exchange and Securities Organization: The Exchange Organization is the legislative body of the capital market and is not responsible for its implementation. This organization, like all market participants, demands the implementation of these ten clauses from different elements of the system. The tenth paragraph of the same decree in December last year was related to the fact that the interbank interest rate should remain around 20%, but it has increased that we are constantly pursuing that the central bank should be held accountable in this regard.

Should corporate payout intervals be reduced?

اری Ansari Director of Supervision of Publishers of the Stock Exchange and Securities Organization: According to Article 240 of the Commercial Code approved in 1311 and its amendment approved in 1347, companies must pay dividends to their shareholders 8 months after the meeting, hence this issue It was objected to by the shareholders, the stock exchange organization is also pursuing the reduction of this period, which in the amendment of the market law, which is going through its final stages in the parliament, it is proposed that this time be extended to 3 months.

Why have not been supported so far by the two refineries and the first one?

‌ Darabi Capital Market Expert: The structure of these funds was wrong and not enough study was done to form them; That is, they introduced these funds to the market with an unstudied decision; So that they do not have the marketing pillar that is responsible for maintaining the value of these funds. These funds are designed in such a way that they can not change the composition of their portfolio; That is, they are not real funds or investment companies.

The Minister of Economy has agreed to transfer the preferred shares of these funds to the market; They are now in the hands of the Ministry of Economic Affairs and Finance and must be handed over by the government to the Exchange Organization, which must also reform their structure so that these funds can be marketed, act as a fund and increase their value. .

Why the deposit of 30,000 billion tomans from the National Development Fund to the Stabilization Fund has not been done in full?

رم Mir Mohammad Sadeghi, Member of the Executive Board of the National Development Fund: This number was not 30,000 billion Tomans from the beginning; Rather, it is 12 thousand billion Tomans and so far, we have paid 4 thousand billion Tomans and by the end of the year, we will pay another 8 thousand billion Tomans to this fund.

We hope that with the return of Rial resources to the fund, we will deposit about 600 billion tomans per month, and finally, 12 thousand billion tomans of the commitment of the National Development Fund will be fulfilled by the end of the year.

The monthly deposits of the National Development Fund to the Stabilization Fund have been made until April, and in the case of May and June, they have not been paid yet due to the addition of an amendment to the contract; Because the payment method, which used to be a deposit, is now going to be changed to an investment, according to a permit issued by the Board of Trustees of the National Development Fund. The reason for this change is that the spending of the National Development Fund must be productive and income-generating.

Problems between the National Development Fund and the Exchange Organization over how to deposit?

رم Mir Mohammad Sadeghi Member of the Board of Directors of the National Development Fund: The problems have been solved and there is no problem; In other words, there was a discussion about the contract that was concluded and based on it, we deposited about 650 billion tomans per month and just to continue working, we agreed with the stabilization fund that the way of acting would change from deposit to investment. We hope that the two installments related to May and June will be paid by mid-July at the latest.

If the government’s decimation decree had been fully implemented, what would have been the market index now?

‌ Darabi Capital Market Expert: At the time the debate was discussed, the entire market was convinced that the government’s intention was to invest productively and create jobs in the community; The market still has this confidence, but during implementation, there are problems that need to be addressed.

For example, in order to calm the market, a stage of offering a car on the stock exchange was carried out, but in the second stage, a new decree canceled it. By listing a car, the government could collect real taxes, and it could benefit workers, the production chain, and the entire network.

If the arrangements were made in full and the clause related to the presence of the head of the stock exchange organization in the decision-making centers was implemented, the index could easily reach over one million and 700 to 800 thousand units; This means that this index could grow by about 30% or twice instead of 15%. Unfortunately, the market is being pushed to the margins, which has become weaker than unproductive markets.

In recent weeks, due to rising interest rates in the Federal Reserve, except for the oil debate, we may have seen changes in the prices of other metals and commodities and have had an impact on the capital market, but what is hurting the Iranian capital market is the uncertainty of some decisions. Is.