Iran News: Flight of Capital Intensifies as Iranian Shareholders Fear War

Amir2018Taghati14 hours ago
Iran News: Flight of Capital Intensifies as Iranian Shareholders Fear War
Amid escalating tensions and the looming specter of conflict in the Middle East,

iran-stock-exchange-fiasco (1)

Written by
Mansoureh Galestan

Amid escalating tensions and the looming specter of conflict in the Middle East, Iranian investors are increasingly fleeing the country’s stock market, exacerbating concerns over the economy. According to the government-affiliated newspaper Etemad Online, nearly 1,800 billion tomans (approximately $275.5 billion with current market rates) were withdrawn from the capital market on April 14, marking a staggering 373% increase compared to the previous day. Simultaneously, approximately 994 billion tomans were withdrawn from fixed-income funds.

The newspaper noted a significant downturn in the stock market, with a 95% decline, leaving market participants reeling. The Tehran Stock Exchange’s overall index plummeted by more than 53,000 units to 2,207,000 compared to the previous week.

Of particular concern is the mass exodus of small-scale investors from the stock market, attributed by analysts to fears of the shadow of war in the region.

However, capital flight from Iran is not a new phenomenon. Due to the regime’s destructive policies, corruption, and international isolation resulting from its sponsorship of terrorism, investors feel increasingly insecure and opt to abandon the country, taking their capital with them.

A report by the state-run website Fararu on January 10, 2023, highlighted the Central Bank’s publication of quarterly capital account statistics, revealing a negative balance exceeding $10 billion in the spring of that year. This figure implicitly indicates capital outflows from the country, a trend that has since intensified.

The Iranian regime has attempted, albeit futilely, to stem the tide of capital flight. In August 2022, the presidential website reported on an economic coordination meeting chaired by Ebrahim Raisi, where authorities discussed measures to counter the outflow of capital, proposing initiatives to prevent such occurrences.

In September 2023, Saeed Moeedfar, the head of the Iranian Sociological Association, speaking to the Jamaran website affiliated with Hassan Khomeini, the grandson of the founder of the theocratic dictatorship, acknowledged a new wave of emigration taking shape following the 2022 uprising. He attributed this trend to widespread despair engulfing society, exacerbated by deep economic crises in production, employment, inflation, and other issues.

Former Minister of Industries Mostafa Hashemi-Taba recently revealed that over the past decade, more than $280 billion has been drained from the country. Additionally, Mehdi Ghazanfari, the head of the Tehran Chamber of Commerce, in a statement on December 12, 2022, disclosed that $45 billion had left Iran in the previous four years alone, amounting to over $10 billion annually.

A research report released by the Chamber of Commerce in April 2023 highlighted worsening economic conditions in the latter half of the previous year due to factors such as internet shutdowns, social media censorship, energy shortages, and unfavorable circumstances, exacerbating the intensity of capital flight from Iran.

 

The confluence of these factors vividly illustrates the profound economic upheaval plaguing Iran. Despite the regime’s efforts to project resilience, its detrimental policies and the ensuing exodus of capital vividly depict a nation in decline. With investors increasingly seeking sanctuary abroad, Iran’s economy finds itself on an ever more precarious trajectory, steering the country’s society inexorably towards a collision course with the root cause of its woes.

 

Iran News: Flight of Capital Intensifies as Iranian Shareholders Fear War

Amir2018Taghati14 hours ago
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