On the 10th June REDmoney Group held its inaugural IFN Iran Forum in Tehran, representing a landmark moment for the country’s Islamic finance industry as it moves towards wider global acceptance.
The forum provided a valuable platform for investors to become more familiar with the Iranian financial system and explore its investment potential. Following years of sanctions obscuring the potential inherent in the industry, the recent relaxation of US and United Nations (UN) restrictions has led to a surge of interest from investors – as well as increased interaction and understanding between Iranian investors and issuers themselves.
Iran is considered to be the largest Islamic economy in the world by assets, and with a financial system prohibited from issuing non-Shariah compliant instruments, it is a market that has long held an appeal for Islamic investors. During the forum, speakers and panelists debated the various areas of investment potential in the Iranian market, especially within the oil and gas sector. The debate was enthusiastic and opinions varied: with some raising concerns as to the Shariah compliance of the overall financial system, while others pointed out that a wholly Shariah compatible structure reduced competition by removing the conventional pillar and therefore resulted in a less stable financial environment with issues over transparency and stability.
Although a one-day forum was by necessity limited in its capacity to cover all the issues relevant to the market, it was notable that panel-based discussions such as these are relatively uncommon in Iran: making the debate all the more valuable by coordinating the relevant experts and participants in the market. Special credit must go to Hooman Sabeti of Allen & Overy, who did a sterling job in managing the panel discussion and handling the Q&A session.
Other illustrious attendees included Dr Ali Saleh Abadi, the president of the Securities and Exchange Organization of Iran, who in his keynote address emphasized the exciting potential in the Iranian financial system and its appeal to international investors. The managing director of REDmoney Group, Andrew Morgan, also contributed his views on the importance of making the wider financial community more aware of the capabilities of the Iranian market, noting that the inaugural IFN Iran Forum represented a desirable platform through which to enhance the development of the country’s financial system.
What remains now is the question of how Iran’s policymakers will tackle the systemic challenges that continue to inhibit foreign investment. However, the attractive profit rates and an increasing focus on improving the regulatory structure should go some way towards improving conditions and attracting Islamic interest in particular. It is important to note, nonetheless, that the open dissemination of information through online portals is vital to facilitate greater global investor attention.
Majid Pireh is the Islamic finance senior expert at Securities and Exchange Organization of Iran. He can be contacted at
[email protected]
.