The primary focus for the government of Iran is to ensure its own survival, not the well-being of the people. Since January 2019, the government told the Iranian people they should go to the stock exchange and invest, as a way to maintain the value of their money, the Toman. Even the Supreme Leader emphasized this is what they must do.
Since that time, people entered the market without prior knowledge about how the stockmarket works, and the many pitfalls it holds for the unwary.
The reason the government encouraged people to enter the stock market was that the government lacked funding, and its plan was to take the people’s money for its own use.
It All Started Well
The growth of the market began naturally. To show progress in the market, the government sold some of its shares to the people at a low price so they would believe the market was profitable.
More people were then encouraged to participate, and although they had no prior experience, they saw that others were making money. More people began to invest in the market, without knowing what they were really doing. Up until about four months ago, everything appeared to be working well.
Then the government issued an order, the accuracy of which is still not completely clear. They instructed capital marketmakers to sell their shares to the public at the highest possible price.
The naive people bought the shares at the highest price and waited for growth, but the government intervened again. They challenged the market with a heavier supply, and eventually, the market plummeted.
The drop in the market caused people to sell their shares and that caused the market to sink further.
It was the government’s policy for ordinary people who did not have knowledge to manipulate the stock exchange because they have control over the market.
The market remained negative due to the heavy supply of real estate, but the highlight was the oversupply. Tracking the announcements and the trading records shows that these government actions, to sell their shares to the people at a high price was to set up the inexperienced new traders so the government could buy back the shares at the market bottom.
Government Manipulation
The government compensated for its lack of budget and also benefited through the fluctuation of the people’s money.
The actions of the government have caused even more difficulties for the people, who were already suffering from a stagnant economy. The people have a lack of money to live and eat, so they need to work, but there is a lot of unemployment.
According to an interview conducted with one of the country’s officials, the government knew that a large amount of gold was stored in people’s homes. They wanted the people to use their gold to enter the stockmarket.
The people’s gold is not the only thing the government wanted access to. They also wanted any property the people own. Their aim is to impoverish the people, to make them subservient due to hunger, in an attempt to prevent a revolt against the government and State.
Analysts say that the people lost up to 50% of their capital in the stock market.
Components of the Stock Market
In the Iranian market, there are many types of companies. There are the non-government-owned mass-produced and machine-building companies, most of which rely on shares issued by the establishments, and there are companies owned by the Revolutionary Guard (IRGC) and the State.
The State owns some companies such as Petrochemicals, Shipping, Oil companies and Shasta com. These companies are very influential in the market because they have very large money exchanges.
Generally, if the largest companies are positive, the market is also positive but if they are negative the market is also negative. These companies make the benchmark.
The people were not the only losers. Companies were also negatively affected. For example, Kartoon dot com lost 60% of its value. Kavir Tire dot com lost 50% and Shasta dot com lost 40%.
The government purposely made the market negative in order to return the shares it had sold at a high price back to itself at a low price. The government clearly knew that people would lose their money.
The good income the government earned from selling and buying back the shares was seen as more beneficial than the loss of hurting the companies.
The government and the State were the big winners.
Official Entities
There are two sets of official entities in Iran – the government, meaning Rouhani and ministers – and the State, meaning the Supreme Leader and IRGC.
It is the government’s policy to show that the leader is opposed to negotiations with the United States, but the Iranian government is under intense pressure, so it needs to negotiate.
There is conflict between the supreme leader and Rouhani for the next presidential election.
The current policy of the government has been to show that the US election does not affect the Iranian economy
Here are links to websites related to Iran’s stock exchange (Farsi)
https://iranintl.com/en (English) (Farsi)
https://en.sena.ir/ (English) (Farsi)
