There should be a training class for government managers! / Imposing the cost of failure of government plans on shareholders

According to Tejarat News, two years ago, Ebrahim Raisi assumed the presidency with the promise of building four million residential units and prioritizing the stock market. Now, after two years of this project, not a single unit has been delivered. The government has now realized that the construction of the National Housing Movement units is a vague plan that cannot be implemented so simply. Therefore, every time, the defendant finds a new case to stop the project.

The government’s repeated excuse from Bazarpash’s language; Commodity exchange is an expensive factor!

The withdrawal of cement from the commodity exchange is the latest self-made challenge of the authorities in the past weeks for the capital market. While the expectations are naturally towards the entry of products and goods of the commodity exchange, Minister Parhashieh Rah seeks to remove cement and steel from the pricing system through free supply and demand. Transparency, getting out of mandatory pricing and immunity from monopoly are among the characteristics of a market such as a commodity exchange.

Bazarpash’s statements show that the Ministry of Roads and Urban Development has found a new defendant for its performance in the National Housing Movement project. The Ministry of Roads has agreed with the steel and cement mafia to withdraw steel and cement from the commodity exchange and re-launch the black market of remittances.

Some time ago, a video of the statements of the Minister of Roads and Urban Development was published in the cyberspace, which showed that the officials of this ministry are willing to sacrifice the economic horizon of the country and the mother industries for plans whose inefficiency was pointed out to the government from the beginning. Mehrdad Bazarpash said in line with this insular and one-dimensional thinking: Just as the car was removed from the commodity exchange and its false prices disappeared, cement and steel should also be removed from the commodity exchange so that their prices will go down!

However, after the power of the car mafia was reduced and at the beginning of February of last year, high-volume cars were removed from the commodity exchange, this time the agreement of Bazarpash with the mafia of the cement market has paved the way for the remittance market to heat up again.

Basic definitions of the stock exchange; What senior government managers still do not understand!

In this regard, Homan Omidi, a capital market expert, said: The basis of this statement that the commodity exchange caused the price of cement is unfortunately completely wrong and unprofessional. The main issue is that exchanges are not formed with the purpose of increasing or decreasing prices; Rather, stock exchanges are created to make prices real. Unfortunately, Mr. Bazarpash does not know about this definition and thinks that a stock exchange should be the cause of price reduction or increase!

Umidi added: When there is no stock exchange, a monopoly is defined for some people to sell a product in the market in any condition they want. Before the acceptance of cement in the commodity exchange, the monopoly of cement supply in the country was in the hands of 25 people. This group brought whatever harm they wanted to the consumer. At present, however, the consumer can enter the commodity exchange in person and buy any amount of cement he wants and of any type with any application.

He added: when clarification occurs, the interests of some people are endangered; Because the hand of monopoly is shortened and they cannot have the former glory and strength. The words of the Minister of Roads and Urban Development showed that there should be a training class about some definitions of the capital market, even for senior government managers, and the gentlemen should be fully informed about these matters!

Commodity exchange has no role to increase and decrease prices!

Emphasizing the essential definition of the commodity exchange, Umidi said: If the commodity exchange rates are higher than the intrinsic value from the point of view of the buyers, the prices will be adjusted due to the decrease in the demand of the buyers, and if it is suitable, the traders will start buying. Currently, cement and steel are offered in the form of a stock market. This type of supply is different from the supply of goods in an alley and limited to a shop. All those who are present in the cement industry, both in the role of consumer and in the role of producer, have an opinion in determining the price.

He added: “Unfortunately, government officials think that the commodity exchange is a place that should increase or decrease the price.” It is not important whether the price is high or low, but the fact that the price is real is the main feature of stock exchanges. In this mechanism, the real market price is obtained.

This capital market expert stated: In the past, you could not have this mechanism in a specific place; Each factory had its own opinion and the buyer had to accept the manufacturer’s opinion. Currently, however, there is a competitive atmosphere in supply and demand. You place an order for any type of cement in any amount or any type of steel sheet or rebar you want, according to the desirability of that product for you, at the price you want. Either the order is accepted by the supplier or not.

He explained: In such a mechanism, buyers compete on the purchase price and suppliers compete on the sale price. The purpose of setting up a commodity exchange is not to increase or decrease the price; Rather, its purpose is to discover the true and fair price for buyers and sellers. The increase and decrease of prices, if they happen, will proceed according to the opinion of the market.

Is the price of cement and steel an obstacle to the national housing movement?

Umidi pointed out: The second issue is on the side of the government. Maybe the government thinks that it is necessary to make cement cheaper in order to fulfill the promise of building four million residential units. It is worth mentioning that the weight of cement price in the finished price of the building is nearly half percent. Even if the government succeeds in providing a unit of cement at half the current price of this product in the commodity exchange, it will achieve less than 0.25% in the final price of the building. The biggest factor affecting the price of the building is the input of the land for construction.

He continued: If the government does not have a plan to fulfill the promise of building four million residential units and has chosen the option of running away with such moves, it should think about the current price of the land. It seems that it has been proposed to provide the land to the people at zero price, which is considered a good thing. Because 70-75% of the cost of housing construction is the price of the land.

Other dimensions of the commodity exchange in the country’s economy

In relation to the issue that the role of the commodity exchange is not limited to benefiting the companies and, as a result, the shareholders, Umidi said: Some people think that the benefit of the existence of the goods in the commodity exchange and the price determination system based on supply and demand goes only to the pockets of the companies. Rather, with the existence of the commodity exchange, a showcase has been built that provides a platform for foreign buyers as well. In this way, the export of products has also been given personality.

Khalaf promised marriage in less than a month!

While recalling the promise of the Minister of Economy, this capital market expert said: Mr. Khandozi announced less than a month ago that he had good news for the market, and part of that news was to solve the problem of the government’s decision making for the capital market. This promise lasted for less than a month and we witnessed the strange comment of Bazerpash. Of course, people are free to express their opinions, but when a legal personality such as the Minister of Roads and Urban Development makes such a statement, the interests of shareholders are endangered.

He continued: This issue was raised briefly and left behind. In the meantime, only one negative wave was created in the stock market in line with the desire of some people who wanted to buy the desired stocks at lower prices. If such cases are repeated, there is a suspicion that negative news is introduced in the market in a targeted and planned manner so that some people can buy stocks at low prices!

Sower’s concern in determining the base price

The Minister of Roads and Urban Development mentioned the base rate formula of cement and steel in his criticisms. Bazarpash had said that the base price of cement and steel should be announced in the commodity exchange. Meanwhile, with a visit to the Commodity Exchange website, you can get the explanation of the formula for calculating the base rate!

Omidi stated in this regard: At this point, the Commodity Exchange and the Exchange Organization in general should clarify the formula for calculating the base price of cement and steel and explain to the government officials where this formula comes from, what is its basis, and the influencing parameters. What is on it? This issue should not have been covered by the media and it is the lack of coordination between the government and the stock exchange organization that caused such a negative wave for the stock market.

Imposing the cost of failure of government plans on shareholders

This stock market expert said: In another scenario, if the government insists on buying steel and cement at a cheap price, it can get a discount, but on the other hand, it can offer discounts to companies on gas and electricity rates. But the government should not forget that if it is the major shareholder in many companies, there are other shareholders too! Therefore, the rights of shareholders and other partners should also be considered.

He explained: For example, you and I jointly own a company (even though you are the major shareholder). It is not possible to include some contracts for your benefit that I, as a partner, do not benefit from. According to the commercial law, it is necessary to observe justice.

He added: Accordingly, the government should not consider a special right for itself. Unfortunately, in many cases, the government applies this special right. For example, in the group of banks, when the government orders a bank to provide debt relief, it means that the government is desperate to fulfill the promises it made and to provide cheap financing that should be done, and it imposes pressure on the banks. Banks that are publicly traded. You cannot spend on your partner’s benefits.

It should be noted that today Ehsan Khandozi said in a group of reporters: Commodity exchange is considered as a transparent platform for the distribution system of basic goods and it is one of the achievements that we achieved at the end of the 80s and 90s. He added: At that time, we were able to move from the path of rent and corruption that existed before to the commodity exchange system.

The Minister of Economy stated: “The government has not made any decision about this and we, as the Ministry of Economy and Finance, are the defenders of the Commodity Exchange.” I am aware that the Ministry of Security and many economic institutions are advocating that if the existing procedure needs to be amended, it should be amended within the framework of the commodity exchange.

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