There’s a good chance Iran’s $US110 billion Tehran stock market is about to rally, and money managers are scrambling to get in there in time.
Bloomberg’s Maria Levitov reports that firms like Charlemagne Capital and First Frontier Capital in London are already starting to build sanctions-compliant funds.
While economic sanctions have not yet been lifted from the Islamic State and a final deal may not come for months, the investors want to start gaining exposure early, before that day comes.
The draw? Low stock valuations. Tehran’s main index reportedly trades at about 5.5 times earnings — much lower than other frontier markets.
But with no previous experience in the country, it’s a pretty risky move for asset managers. The firms are reportedly teaming up with local companies to build the least risky funds possible.
Until oil sanctions are lifted, the firms are reportedly looking at the banking, telecommunications, metals, and cement industries.