TEHRAN –Stock Market Analyst Salman Nasirzadeh has said establishing project-based exchange-traded funds (EFTs) will guide the country’s wandering capitals toward the productive sector and will ultimately result in economic growth.

“By activating [the capacities of] the capital market and establishing project-based funds, we will see the absorption of more resources in projects, in which case the financial pressure will be removed from the money market (banking system) and wandering capitals will go to the productive sector,” Nasirzadeh told IRNA on Friday.

Mentioning the Economy Ministry’s recently proposed roadmap for economic growth, the expert noted that using the stock market for funding development projects and offsetting the budget deficit is a major part of the mentioned roadmap.

“Restrictions on the country's resources due to some problems in economic structures have become an incentive for authorities to consider alternative sources of capital to implement projects,” he said.

Nasirzadeh further stated that according to official statistics, currently up to 70 percent of the financing for economic projects is done through banks and money markets, adding: “The capital market can finance development projects at a lower cost.”

"If the capital market is managed properly, it will definitely be a suitable channel for the country's economy and investors in order to provide financial resources for various projects, which will definitely have less inflationary effects,” he stressed.

According to the analyst, Funds or project-based EFTs will be even profitable in various projects, and while attracting liquidity, will lead to a reduction in investment risk.

Iranian Finance and Economic Affairs Minister Ehsan Khandouzi announced on Wednesday that the government Economic Coordination Headquarters has approved a roadmap proposed by his ministry for economic development and curbing inflation.

According to Khandouzi, based on the roadmap the government plans to support pioneering projects that will generate large revenues and create employment by issuing project shares and offering them at the stock market.

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