TEHRAN – The underwriting process for the shares of four major refineries that are going to be offered through Iran’s second exchange-traded fund (ETF) started on Wednesday and will continue until September 9, IRNA reported.

As reported, the government shares in Tehran, Tabriz, Isfahan, and Bandar-Abbas refineries will be offered through this EFT, at the Tehran Stock Exchange (TSE) which is the main stock exchange of Iran.

The offering of the second EFT had been postponed several times due to some technical problems so that rumors of its cancelation were being heard, however in late June Finance and Economic Affairs Minister Farhad Dejpasand announced August 26 as the date for the offering of the second EFT and put an end to those rumors.

The offering of this EFT comes as the value of shares offered via the first exchange-traded fund has also increased significantly.

On May 2, the TSE listed the first exchange-traded fund from a series of three ETFs, through which shares of some state-owned organizations and companies are planned to be offered.

In mid-June, the finance and economic affairs minister announced that the value of shares that are offered by the first exchange-traded fund had doubled.

Referring to the offering of the shares via the first ETF, Dejpasand said, “The offering was our first experience in this field. About 3.6 million persons purchased the units of shares offered by the first fund.”

An ETF is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occasionally occur.

As described by Investopedia, ETFs can contain many types of investments, including stocks, commodities, bonds, or a mixture of investment types. An exchange-traded fund is marketable security, meaning it has an associated price that allows it to be easily bought and sold.

The shares to be offered via the above mentioned Iranian ETFs belong to those governmental bodies defined in Iran’s privatization program, a comprehensive plan seriously followed up by the government to downsize and reduce its role in the economy.

The three ETFs are planned to offer 550 trillion rials (about $13 billion) worth of the governmental stakes, of which 165 trillion rials (about $3.9 billion) is to be offered via the first fund.

The first ETF, established by the Ministry of Finance and Economic Affairs, comprises government shares in three banks, including Bank Mellat, Tejarat Bank, and Bank Saderat, as well as the shares of two insurance companies, i.e. Iranian Reinsurance Company and Alborz Company.

The government has a 17-percent stake in Bank Mellat, a 17-percent stake in Tejarat Bank, and an 18-percent stake in Bank Saderat.

EF/MA