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Iranian shareholders face rocky road ahead

While the Tehran Stock Exchange has recently reversed its downward trend, fundamental interest rate and exchange rate reform are necessary to maintain the upward momentum.
Stock market employees work at Tehran's Stock Exchange, Iran, January 17, 2016. REUTERS/Raheb Homavandi/TIMAATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. FOR EDITORIAL USE ONLY.       TPX IMAGES OF THE DAY      - GF20000097701

In its 50-year history, the Tehran Stock Exchange (TSE) staged its best performance in the Iranian year beginning March 21, 2013. But by January 2014, it struggled to break or even maintain the record touching 89,500 mark. The bullish breakout occurred some six months after Hassan Rouhani was elected president for the first time. Now, over 3½ years later, the main index is hovering below 84,000.

High interest rates, global commodity price fluctuations and the country’s dual exchange rate regime are occasionally cited as the major causes of the malaise in the volume and value of trading on the TSE. Yet questionable oversight of listed companies is also a major factor.

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