TEHRAN – Head of Iran’s Securities and Exchange Organization (SEO) has said the government is following new strategies to avoid pre-ordered pricing in the stock market in the long term, IRNA reported.

“The government's policy, in the long run, is to avoid pre-ordered pricing. This policy has been repeatedly stressed by the president and the government's economic team and has been placed on the government's agenda,” Majid Eshqi said on Sunday.

According to the official, supply and demand should be the only determining factor for setting the price for a share.

“We need to move away from imperative policies so that companies can be profitable in the long-term,” he said.

Over the past 15 months, continuous fluctuations in the Iranian stock market have led shareholders, experts, and scholars to believe that the government should not interfere in the stock market, saying the government's pre-ordered and unrealistic pricing of some state-owned shares is the main reason for the capital market’s current downward trend.

The government has been claiming that the decisions made for this market are not aimed at interfering in stock exchange transactions or directing the market, but are efforts for reducing the bubble created in the market and to prevent further decline of the stock market index.

Despite the skepticism, after the supportive measures taken by the government, the stock market has been gradually getting back on track and experts believe that the market is regaining people’s trust.

In early July, Market Expert Reza Alavi said that the inflow of liquidity into the market and the increase in the value of transactions indicate that people are once again trusting the capital market.

“At present, other markets such as gold, foreign currency, and cars are not attractive enough for investors, and the stock market is still a good place for people's investments,” Alavi said.

“After the [presidential] election debates, people have come to the conclusion that the stock market is one of the priorities of the new government, and for this reason, they have re-trusted this market, and as a result, the inflow of new capital into the market has increased,” he noted.

EF/MA