TEHRAN – Head of Iran’s Capital Market Development and Stabilization Fund Amir-Mehdi Sabaei has said the National Development Fund of Iran (NDF) is going to deposit 120 trillion rials (about $510 million) into the fund to support the stock market.

“According to a recent decision of the government's Economic Coordination Headquarters, 120 trillion rials of new deposits will be made by the National Development Fund, which will be gradually transferred to the account of the Capital Market Development and Stabilization Fund,” Sabaei said.

Sabaei noted that the fund can also be financed through the money and capital markets; while other proposals such as the transfer of government assets worth 500 trillion rials (about $1.68 billion) to the fund have also been suggested to strengthen the fund's financing capacity.

As IRNA reported, the allocation of financial resources from the National Development Fund to the Capital Market Stabilization Fund is one of the measures that the government has been taking since the stock market started a downward trend.

Following the 13th government’s new strategies to improve the stock market, the Government Economic Coordination Headquarters convened a meeting on November 2, chaired by President Ebrahim Raisi, during which a decision was made to inject new resources from NDF into the Capital Market Development and Stabilization Fund.

The allocation of the above-mentioned funding is also part of the outcomes of the November 2 meeting.

Based on the statute of Capital Market Development and Stabilization Fund, the resources of this fund can be provided from three main sources, the first is the government investment which should be foreseen in the national budget bill, the second is the allocation of one percent of the NDF resources for this fund, and the third source would be the allocation of a part of the trades commission received by the Securities and Exchange Organization (SEO).

According to Sabaei, currently, 30 percent of the SEO commissions are deposited directly to the account of this fund on a daily basis.

The Capital Market Development and Stabilization Fund’s mission is to support the Iranian stock market. The money loaned from NDF should be repaid over a specified period and the maturity can be extended. The Capital Market Stabilization Fund is responsible for paying the principal amount plus interest.

EF/MA