Kuwait Stock Exchange

The Kuwait Stock Exchange (KSE) is the national stock market of The State of Kuwait. Although several share holding companies (such as NBK in 1952) existed in Kuwait prior to the creation of the KSE, it was not until October 1962 that a law was passed to organize the country's stock market.

The Kuwait Stock Exchange is also among the first and largest stock exchanges in the Gulf region, and is now gaining prominence as one of the most potentially important in the world.

The Kuwait Stock Exchange shall enjoy an independent judicial personality with the right of litigation in a mode facilitating the performance of its functions for the purpose of realising the objectives of its organisation in the best manner within the scope of regulations and laws governing the Stock Exchange operations.

The Stock Exchange shall within its activity act to direct and rationalise dealing in stocks and securities, within the scope of its powers in order to develop and stabilise dealing in securities in a manner securing safe, easy and accurate transactions so as to avoid any confusion in dealings.

The Stock Exchange, in pursuance of the research and the studies concluded by it and its follow up of the security dealing process shall render appropriate advice and opinion to the competent government authorities regarding the financial status of the Stock Exchange member companies and means of promoting their efficiency for realisation of their relevant objectives.

The Stock Exchange shall participate with the competent authorities in order to realise coordination and integration among the financial and the economic activities and the capital movement so as to assist in achieving the economic and the financial development and stability of the state.

The Stock Exchange staff shall continue to develop the systems and the methods of dealing in securities, besides introducing modern techniques such as those applied in advanced stock markets for the purpose of achieving a sound financial position for the Kuwait Stock Exchange on both, regional and international levels.

The Stock Exchange shall act to encourage saving, promote investment awareness among citizens, protect depositors and create means for investment of funds in securities, in a manner beneficial to the economy.

Kazakhstan Stock Exchange

Kazakhstan Stock Exchange is the principal stock exchange in Kazakhstan. It is located in Almaty and was founded in 1993 as the Kazakh Interbank Currency Exchange. Its name is abbreviated to KASE. Part of Almaty Financial Centre.

KASE has a bond market and an equities market.

Amman Stock Exchange

Amman Stock Exchange (or ASE for short) is a stock exchange private institution in Jordan. It is named "Amman", after the country's capital city, Amman.

History
The ASE was established in March 1999 as a non-profit, private institution with administrative and financial autonomy. It is authorized to function as an exchange for the trading of securities. The exchange is governed by a seven-member board of directors. A chief executive officer oversees day-to-day responsibilities and reports to the board. The ASE membership is comprised of Jordan's 65 brokerage firms.


Operations
The ASE operates a bond market and an equities market. The equities market is divided into a First Market and a Second Market. The exchange has pre-trading sessions from 09:30am to 10:00am, normal trading sessions from 10:00am to 12.00noon and 12.00noon to 12.30pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance. The ASE's stock indices include the ASE Unweighted Index and the ASE Market Capitalization Weighted Index.

Tokyo Stock Exchange

The Tokyo Stock Exchange (東京証券取引所 ,Tōkyō Shōken Torihikisho?), or TSE, located in Tokyo, Japan, is the second largest stock exchange market in the world by market value, second only to the New York Stock Exchange. As of 31 December 2007, the the Tokyo Stock Exchange had 2,414 listed companies with a combined market capitalization of $4.3 trillion.


Structure
The TSE is incorporated as a kabushiki kaisha with nine directors, four auditors and eight executive officers. Its headquarters are located at 2-1 Nihombashi Kabutocho, Chūō, Tokyo, Japan. Its operating hours are from 9:00 to 11:00 am, and from 12:30 to 3:00 pm. From April 24, 2006, the afternoon trading session started at its usual time of 12:30 p.m.

Stocks listed on the TSE are separated into the First Section (for large companies), the Second Section (for mid-sized companies), and the "Mothers" section (for high-growth startup companies). As of March 2006, there are 1,721 First Section companies, 489 Second Section companies and 156 Mothers companies.

The main indixes tracking the TSE are the Nikkei 225 index of companies selected by the Nihon Keizai Shimbun (Japan's largest business newspaper), the TOPIX index based on the share prices of First Section companies, and the J30 index of large industrial companies maintained by Japan's major broadsheet newspapers.

89 domestic and 19 foreign securities companies participate in TSE trading. See: Members of the Tokyo Stock Exchange

Other TSE-related institutions include:

The exchange's press club, called the Kabuto Club (兜倶楽部 ,Kabuto kurabu?), which meets on the third floor of the TSE building. Most Kabuto Club members are affiliated with the Nihon Keizai Shimbun, Kyodo News, Jiji Press, or business television broadcasters such as Bloomberg LP and CNBC. The Kabuto Club is generally busiest during April and May, when public companies release their annual accounts.
On 15 June 2007, the TSE paid $303 million to acquire a 4.99% stake in Singapore Exchange Ltd.


History

Prewar history
The Tokyo Stock Exchange was established on May 15, 1878, as the Tokyo Kabushiki Torihikijo (東京株式取引所) under the direction of then-Finance Minister Okuma Shigenobu and capitalist advocate Shibusawa Eiichi. Trading began on June 1, 1878.

In 1943, the exchange was combined with ten other stock exchanges in major Japanese cities to form a single Japanese Stock Exchange (日本証券取引所 ,Nippon Shōken Torihikisho?). The combined exchange was shut down and reorganized shortly after the bombing of Nagasaki.

Postwar history
The Tokyo Stock Exchange reopened under its current Japanese name on May 16, 1949, pursuant to the new Securities Exchange Act.

The TSE runup from 1983 to 1990 was unprecedented, in 1990 it accounted for over 60% of the world's stock market capitalization (by far the world's largest) before falling precipitously in value and rankings today, but still remains one of the 3 largest exchanges in the world by market capitalization of listed shares.

The trading floor of the TSE was closed on April 30, 1999, and the exchange switched to electronic trading for all transactions. A new facility, called TSE Arrows (東証アローズ ,Tōshō Arrows?), opened on May 9, 2000.

In 2001, the TSE restructured itself as a stock company: before this time, it was structured as an incorporated association (社団法人 ,shadan hōjin?) with its members as shareholders.

I.T. issues
The exchange was only able to operate for 90 minutes on November 1, 2005, due to bugs with a newly installed transactions system, developed by Fujitsu, which was supposed to help cope with higher trading volumes. The interruption in trading was the worst in the history of the exchange. Trading was suspended for four-and-a-half hours.

During the initial public offering of J-Com on December 8, 2005, an employee at Mizuho Securities Co., Ltd. mistakenly typed an order to sell 610,000 shares at 1 yen, instead of an order to sell 1 share at 610,000 yen. Mizuho failed to catch the error; the Tokyo Stock Exchange initially blocked attempts to cancel the order, resulting in a net loss of 347 million US dollars to be shared between the exchange and Mizuho. Both companies are now trying to deal with their troubles: lack of error checking, lack of safeguards, lack of reliability, lack of transparency, lack of testing, loss of confidence, and loss of profits. On 11 December, the TSE acknowledged that its system was at fault in the Mizuho trade. On 21 December, Takuo Tsurushima, chief executive of the TSE, and two other senior executives resigned over the Mizuho affair.

On January 17, 2006, the Nikkei 225 fell 2.8%, its fastest drop in nine months, as investors sold stocks across the board in the wake of a raid by prosecutors on internet company livedoor. The Tokyo Stock Exchange closed early on January 18 due to the trade volume threatening to exceed the exchange's computer system's capacity of 4.5 million trades per day. This was called the "livedoor shock." The exchange quickly increased its order capacity to five million trades a day.

Hours
The exchange's normal trading sessions are from 09:00am to 11:00am and from 12:30pm to 3:00pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance

Osaka Securities Exchange

The Osaka Securities Exchange Co., Ltd. (株式会社大阪証券取引所 ,Kabushiki-gaisha Ōsaka Shōken Torihikijo?, OSE) (Hercules: 8697) is the second largest securities exchange in Japan, in terms of amount of business handled. As of 31 December 2007, the Osaka Securities Exchange had 477 listed companies with a combined market capitalization of $212 billion.[1] The Nikkei 225 Futures, introduced at the Osaka Securities Exchange in 1988, is now an internationally recognized futures index. In contrast to the Tokyo Securities Exchange, which mainly deals in spot trading, the Osaka Securities Exchange’s strength is in derivative products today OSE is the leading Derivatives Exchange in Japan and it was the largest futures market in the world in 1990 and 1991. According to statistics from 2003, the Osaka Securities Exchange handled 59% of the stock price index futures market in Japan, and almost 100% of trading in the options market. Osaka Securities Exchange Co., which listed on its Hercules market for startups in April 2004 is the only Japanese securities exchange which went public on its own market.

In July 2006 OSE launched their newest futures contract the Nikkei 225 mini which is one tenth of the size of the original Nikkei 225 Futures contract and highly popular among Japanese individual investors. In September 2007 OSE established evening session for Stock Index Futures and Options.The trading hours is from 16:30 to 19:00 (JST. 7:30-10:00 in UTC).

History
The birthplace for futures transactions: Dōjima Rice Exchange (堂島米会所 The origin of securities exchanges stems from Edo Period, when the exchange for rice & crop was established in Osaka, center of Japanese economy. Each prefecture set up its own warehouses in Osaka for shipping & preservation of their rice (to be taxed by the government), and sold them to merchants. One of the most famous merchants was "Yodoya", which was based upon the southern part of Yodoyabashi area. Some other merchants gradually gathered to create one market. This market was called "Yodoya-Komeichi", which was the first securities exchange in the nation.

Later on, this market was moved to Dojima in 1697, so-called "Dojimakomekaisho", which was a physical market to trade in rice-tickets or physical rice. In 1716, Cho-gomai transaction was introduced and recognized by the government in 1730, which is said to be the origin of futures transactions in Japan.

Nagoya Stock Exchange

Nagoya Stock Exchange (名古屋証券取引所 Nagoya Shōken Torihikijo, NSE) is a stock trading market in Nagoya, Japan. It is Japan's third largest exchange, behind the Tokyo Stock Exchange and Osaka Securities Exchange.

The Nagoya Stock Exchange (NSE) is the successor to the Nagoya Stock Exchange Co. Ltd., which was founded in 1886. It was founded in 1949 as a corporation with securities companies as members under the terms of the Securities and Exchange Law. In 2002, Nagoya Stock Exchange, Inc. was established after demutualization of NSE. The Nagoya Stock Exchange is a stock corporation that provides an Exchange Securities Market under authorization of the Prime Minister.

It is operated by Nagoya Stock Exchange, Inc. (株式会社名古屋証券取引所) and has normal trading sessions from 09:00am to 03:30pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance.

JASDAQ Securities Exchange

The JASDAQ Securities Exchange (ジャスダック証券取引所 ,Jasudakku Shōken Torihikisho?) is a securities exchange headquartered in Tokyo, Japan.

JASDAQ is not related to NASDAQ in the United States, but operates an electronic trading system similar to NASDAQ.

History
In 1963, the Japan Securities Dealers Association (日本証券業協会 ,Nippon Shōkengyō Kyōkai?) set up an over-the-counter registration system for trading securities. This system was placed under the management of a private company, Japan OTC Securities (日本店頭証券 ,Nippon Tentō Shōken?) in 1976.

The JASDAQ automated quotation system became operational in 1991.

In 2004, JASDAQ received a permit from the Prime Minister to reorganize as a securities exchange. It became the first new securities exchange in Japan in almost fifty years.


Hours
The exchange has pre-market sessions from 08:00am to 09:00am and normal trading sessions from 09:00am to 03:00pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance.

Tel Aviv Stock Exchange

The Tel Aviv Stock Exchange (TASE) in Tel Aviv (Hebrew: הבורסה לניירות ערך בתל אביב‎, colloquially known as the Boursa) is Israel's only stock exchange.

The TASE is the only public market for trading securities in Israel. It plays a major role in the Israeli economy. The precursor to the TASE was the Exchange Bureau for Securities, founded by the Anglo-Palestine Bank (which became Bank Leumi) in 1935. With rapid growth of the Israeli economy after the founding of the state, a formal stock exchange was incorporated and began operations in Tel Aviv in 1953. In 1983 the exchange moved to its current location in Tel Aviv.

TASE lists some 660 companies, about 60 of which are also listed on stock exchanges in other countries. TASE also lists some 180 exchange-traded funds (ETFs), 60 government bonds, 500 corporate bonds, and more than 1000 mutual funds.

There are 29 members that make up TASE. The list of members indicates that one of the members is a candidate

Listing
The Exchange offers four programs under which companies can list on the exchange: three programs for normal operating companies, and an additional venture program for development-stage technology companies. In addition, the TASE has a program for the listing of Limited Partnership Units.

The Dual Listing Law that took effect in October 2000 enables companies listed in the United States or London to dual-list on the TASE without any additional regulatory requirements. As of December 31, 2006, 39 Israeli companies have dual-listed on the TASE, in compliance with this framework.

As of 2007, the total market value of all listed equity securities was $202.7 billion, compared with $161.4 billion in 2006, $122.6 billion in 2005 and $92.1 billion in 2004.


Trading
The TASE has a computerized trading system with real-time information. All shares, convertibles, treasury bills, government bonds, and derivatives are traded via TACT, the TASE’s fully automated trading system.

Trading in shares takes place Sunday through Thursday between 8:30 a.m. and 5:30 p.m. local time (GMT+2), overlapping the American markets for a full hour (9:30 a.m. to 10:30 a.m. EST). Bonds and Treasury bills are traded between 9:30 a.m. and 5:30 p.m. Derivatives trading runs from 9:30 a.m to 5:30 p.m.[2] [3] Dual listing is permitted and many larger Israeli companies are dually listed on the TASE and one or more foreign markets, usually the New York Stock Exchange or NASDAQ, but also the American Stock Exchange and London Stock Exchange.

Between 2003 and 2006, share prices on the TASE rose sharply. The General Index of shares and convertible securities (which is comprised of all shares and convertible securities tradable on the TASE) increased in USD terms by 15.3% in 2006, compared with an increase of 24.3% in 2005 and an increase of 19.5% in the General Index in 2004.

During 2006, the Tel Aviv 100 Index and the Tel Aviv 25 Index increased in USD terms by 22.0% and 22.6% respectively, compared with an increase of 21.1% and 24.7%, respectively, in 2005. The average daily trading for equity securities increased to $326 million during 2006, compared with $223 million in 2005 and $147 million in 2004.

As of July 1, 2007, TASE's largest stocks by market cap were Teva Pharmaceutical Industries ($7.8B), Israel Chemicals ($2.5B), Bank Hapoalim ($1.5B) and Bank Leumi ($1.4B). Daily turnover of shares and convertibles in 2006 was USD 326 million, $387M of bonds, $179M of T-bills and 335M of options and futures. Total market cap at the end of 2006 was $161B shares and convertibles, $98.9B government and corporate bonds and $20.9B T-bills, a total of $281.2B. On July 4, 2007, TASE's benchmark TA-25 index closed at a record 1141.76.

TASE links to the U.S. markets with a direct link with DTC, a subsidiary of the Depository Trust & Clearing Corporation, which facilitates the trading of dually-listed securities.

Active involvement of foreign investors in the TASE began in 1994. In 2006, international holdings increased to 11.6% of the total market capitalization of the shares and convertible securities tradable on the TASE, compared to 11.4% in 2005 and 10.0% in 2004.[5]


Indices
The major stock market indices of the TASE include:

TA-25 - TASE's flagship index, listing TASE's 25 largest stocks by market cap. Also called the Ma'of.
TA-100 - TASE's 100 largest stocks
TA-75 - Stocks on TA-100 which are not included in TA-25
Mid-Cap 50 - The largest 50 shares which are not included in TA-100 (replaced the Yeter-30)
Yeter - All other TASE's stocks which are not included in TA-100
Tel-Tech 15 - TASE's 15 largest high-tech stocks
TA Real-Estate 15 - TASE's 15 largest real-estate sector stocks
TA Finance 15 - TASE's 15 largest Finance sector stocks
Tel-Div 20 - Index of the 20 issues listed on the TA-100 with the highest annual dividend yield.
Maala - socially responsible investing index
Tel-Bond 20 - consists of the 20 corporate bonds, fixed-interest and CPI-linked, with the highest market cap among all the bonds traded on the TASE.
These and other indices are explained on the TASE website indices section.


Regulation and controls
The TASE is highly regulated, both internally and externally. The exchange is regulated by the Securities Law (1968), and falls under the direct supervision of the Israel Securities Authority. Internal regulations include automatic rejection of a trade at a price that deviates more than 35% from the last trade for that security, circuit breakers, and 45-minute halting of trade in a company’s securities on the day that the company publishes price-sensitive information, so that the information can be widely disseminated. The TASE’s rules govern membership, registration of securities, conditions for suspending trading, and obligations of listed companies.


Clearinghouses
Two clearinghouses operate at the TASE as subsidiaries:

The TASE Clearing House was established in 1966. It clears all securities transactions executed on and off the stock exchange and carries out income payments on behalf of companies. The TASE Clearing House also operates a Global Clearing, Settlement and Custody Services unit in collaboration with Citigroup.
The Derivatives Clearing House was established in 1993 with the opening of the TASE derivatives market. It is responsible for clearing options and futures traded on the TASE.

Iraq Stock Exchange

The Iraq Stock Exchange (ISX), formally the Baghdad Stock Exchange, is a stock exchange in Baghdad, Iraq.

The Iraq Stock Exchange was incorporated and began operations in June 2004. It operates under the oversight of the Iraq Securities Commission, an independent commission modeled after the U.S. Securities and Exchange Commission. June Reed is an American adviser to the stock exchange.

Before the 2003 invasion of Iraq, it was called the Baghdad Stock Exchange and was operated by the Iraqi Ministry of Finance. Now it is a self-regulated organization similar to the New York Stock Exchange, owned by the 50 or so member brokerages.

As of 2005, the ISX was Iraq's only stock exchange. It opened in 2004 with 15 companies, and now lists more than 100 companies. Turnover of shares in 2005 was approximately $5 million USD per trading session. Major stocks included Bank of Baghdad, Baghdad Soft Drinks Co, Iraqi Tufted Carpets Co, Hader Marble, and Altherar Agriculture.

Aswat al-Iraq news agency covers every trading session with reports published on the web in English and Arabic

Growth
Trading was with pen and paper. Buyers shouted at or called into their brokers, who stood near their white dry-erase boards that listed each company's share buy and sell price.

That changed in February 2009, when for the first time since it was launched in the mid-1990s, the Iraq Stock Exchange announced that it would have a computerized system to show the movement of shares. Iraqi Exchange and Securities Commission Chairman Abdul-Razzak al-Saadi said that the new system would replace two blackboards that are manned by personnel using chalk to record all changes. Al-Saadi said a $7 million grant from international donors enabled the stock exchange to buy the electronic system.

Trading was suspended for several months in 2006 due to violence, and is subject to power outages.

In 2006 92 trading sessions were held (an average of 2 per week), 57 billion shares were traded (at a value of 146 billion dinars), and 38,000 trades were consummated. Now the trading floor is now open Sunday, Tuesday, and Thursday from 10:00 a.m. - 12:00 noon, six hours a week.

The ISX opened to foreign investors on August 2, 2007. The market is dominated by a handful of wealthy Iraqis, many of whom live outside the country and call in their orders by phone to brokers, says Taha Abdul Salam, the exchange's CEO. Foreign investors in late 2008 accounted for less than 20% of activity.

The ISX has been unaffected by the Economic crisis of 2008

Tehran Stock Exchange

The Tehran Stock Exchange (TSE) (Persian: بورس اوراق بهادار تهران) is Iran's largest stock exchange, which first opened in April 1968. The TSE is based in Tehran. As of June 2008, 400 companies, with a market capitalization of US$70 billion were listed on TSE.

History

The concept of a stock industrialization dates back to 1936 in Iran with the largest and oldest bank in Iran, Bank Melli together with Belgian experts wrote a report detailing the prospects of having an operational stock exchange in Iran. Outbreak of the World War II and other political factors delayed the implementation process until 1967 where the Government revisited the issue and ratified the "Stock Exchange Act". Consequently a small exchange, the Tehran Stock Exchange (the "TSE") began its operations in 1967. What followed was an initial trading in corporate and government bonds. The economic boom in the 1970s led to a pent-up demand for equity. Meanwhile, certain forces were changing the economic backdrop in Iran. The Government was actively involved in grant of shares to employees for large state-owned and family-owned enterprises. Market activity was reaching a frenzy with many companies and high net worth individuals vying to participate in the new found wealth associated with the TSE.

Everything came to a stand still after the Islamic Revolution leading in a prohibition against interest-based activities and nationalization of major banks and industrial giants. Mobilization of all resources towards the war effort during the 8-year Iran-Iraq war did not help matters. However, the Government fully embraced economic reforms and a privatization initiative in 1989 with a surge of activity in share activity of many state-owned companies through the defined targets in the first "Five-Year Economic Reform" where the Government together with the Parliament defined the economic prospects of the country for the coming five years. Attention to promotion of the private sector and new interest in the TSE brought life back to the market. However, lack of regulation and out-of-date legal framework led to crisis in the market leading to certain "meltdowns" until today. The market has experienced its share of highs and lows in the past years including topping the World Federation of Exchanges' list in terms of performance in 2004 to tumbling down to last place in 2007 due to political uncertainties in the region.


Structure

The Securities & Exchange Council is the highest authority and is responsible for all related policies, market strategies, and supervision of the market. The Chairman of the Council will be the Minister of Economics; other members are: Minister of Trades, Governor of the Central Bank of Iran, Managing Director of the Chamber of Commerce, Attorney General, Chairman of the Securities and Exchange Organization, representatives of the active market associations, three financial experts requested by the Economics Minister and approved by the Council of Ministers, and one representative for each commodity exchange.
The Securities and Exchange Organization (SEO) are responsible for administration and supervisory duties, governed by the Board of Directors. The SEO’s Board of Directors are elected by the Securities and Exchange Council.

Operations

The TSE is open for trading five days a week from Saturday to Wednesday, excluding public holidays. Trading takes place through the Automated Trade Execution System from 9am to 12:30am, which is integrated with a clearing, settlement, depository and registry system. The TSE is solely an order-driven market and all transactions are executed in the manner and under the principles of open auction.
The trading system is an order driven system, which matches buying and selling orders of the investors. Investors can place their orders with TSE accredited brokers, who enter these orders into the trading system. Then, the system automatically matches buy and sell orders of a particular security based on the price and quantity requirements. The mechanism for which the price of equities is determined is as follows:

''The best price (price priority)
Time of order priority''

Under the price priority rule, a selling (buying) order with the lowest (highest) price takes precedence. Under the time priority rule, an earlier order takes precedence over others at the same price. Thus, when the lowest sell and the highest buy orders match in price, the transaction is executed at the price. In short, the TSE market is a pure order- driven Market.

The trading system also generates and displays details of current and historical trading activity, including prices, volumes traded and outstanding buy and sell orders. This ensures that investors have the required information to be able to take informed investment decisions. The range of price movements is typically restricted to two per cent daily. This can be changed in specific situation by the Board of the TSE in case of unusual price movements resulting in an extremely high or low P/E ratio. Short selling is not permitted. There are no minimum trading lots. The TSE presently seeks to install the new trading system which will be purchased from Atos Euronext Market Solutions (AEMS) during second quarter of 2007.


Presently, TSE trades mainly in securities offered by listed companies. Equities and Corporate Bonds are being traded at TSE at the moment. The plan is to introduce other financial instruments in the near future. The introduction of project-based participation certificates that bear a fixed annual return during the period of the project and promise the final settlement of the profit at the date of its completion, has diversified the market.

The Tehran Stock Exchange (TSE) has started an ambitious modernization program aimed at increasing market transparency and attracting more domestic and foreign investors. Concrete measures that have been taken in the planning and operations of the stock exchange such as the settlement system, geographical expansion, new exchange laws in order to attract local and foreign capital.

The new system makes it possible to purchase and sell stocks on the same day. The system has also made it possible for 2,000 brokerage stations to work simultaneously, while the number was just about 480 in the past. The rise in electronic dealing, non-stop input and updated data on orders, transactions and indices are among other features of the new system. The new system has made it possible to link the stock market to the international bourses. The bourse can now handle 700 transactions per second and 150,000 transactions per day.[2]

TSE is a full member of the World Federation of Exchanges (the former Fédération Internationale des Bourses de Valeurs or FIBV) and a founding member of Federation of Euro-Asian Stock Exchanges (FEAS).


Economic Sectors

As of April 2007, there are 324 companies listed on the TSE with a total market capitalization of US$42,452.5mn. Close to 60% of the market capitalization relates to listed companies from the Basic Metals Sector, Motor Vehicles and Trailers Sector, Chemicals and By-Products Sector, and Non-Metallic Minerals Products Sector. A combined total of 161 companies from the said sectors are listed on the TSE , which translates to 49.7% of total companies listed on the TSE. Largest stocks include Mobarakeh Steel Co. with a market capitalization of US$3,218mn, which translates to 7.6% of total market capitalization, National Iranian Copper Industries Company (Sanaye Mese Iran) which represents 6.8% of total market capitalization, and Saipa Co. at 5.3% of total market capitalization. This indicates that the capital market in Tehran is heavily concentrated on four economic sectors with companies that make up nearly half of the total listed companies on the exchange. While 163 companies listed are spread out amongst 26 sectors, with the Food and Beverages Sector alone accounts to 32 companies at a market capitalization of US$897.5mn.

In 2008, other companies in the top spots included Gol-Gohar Iron Ore Company ($2.1 billion) and Chadormalou Mining and Industrial Company (two billion dollars). Meanwhile, value of shares of Kharg, Ghadir petrochemical companies, Khuzestan Steel Company, Power Plant Projects Management Company (MAPNA), Retirement Investment Firm, Iran Khodro Industrial Group and Metal and Mine Investment Companies exceeded one billion dollars.[3] Studies show that about 30 firms, involved in 11 industries, hold close to 75 percent of shares in Tehran Stock Exchange (2008).[4]


Indices
• TSE All Share Price Index (TEPIX)
• Industrial Index
• Financial Index
• TSE Dividend & Price Index (TEDPIX)
• TSE Dividend Index (TEDIX)
• TSE-50

In 1990, the All-Shares Price Index (TEPIX) was introduced to the market as the main indicator of share price movements.TEPIX is a weighted market value of all share prices appearing on the TSE Board and is measured every two minutes. In addition to the TEPIX, daily price indices of shares of each company, each sector, and the Top Fifty most active companies (TSE-50) are computed.


Performance

2000-2004: The performance of the TSE has had no correlation with major exchanges or emerging stock markets over the past few years and not even with the oil price.[5][6] While the overall indices of the world’s five major exchanges – New York, London, Paris, Frankfurt and Tokyo plunged by 40 to 70% between March 2001 and April 2003, the TSE index (Tepix) bucked the trend by going up nearly 80%.[7]

2005-2006: In December, 2005, 419 companies with a market capitalization of IRR 32,741.7 million were listed in TSE. The TSE has had an exceptional performance over the past 5 years. In general, the stock market in 2005/06 shed value as it is manifested by the decline of its major stock price indices. The TSE price index (TSPIX) at the end of 2005/06, declined by 21.9%, while the Financial Sector Index, and the Industrial Index, declined by, 38.8%, 19.4% respectively, and the Dividend Index gained 11.8%, mostly due to a reported 100 billion USD capital flight from the country because of the international dispute surrounding the Iranian nuclear programme.

2007: The market bottomed in June 2007 mainly because of the renewed privatization drive in the Iranian economy.[8][9][10]

2008: The TSE was not affected by the international financial turmoil in 2008, but following the global reduction in prices of copper and steel, the bourse index dropped by 12.5 percent, as most of the companies listed on the exchange are producers of such commodities.[11][12]

Market Participants
The Government of Iran directly holds 35 percent of the TSE, while securing another 40 percent through pension funds and investment companies. Foreign investment accounts for only about 2 percent of the stock market (2009).[13]


Foreign Portfolio Investment

The new by-law for Foreign Portfolio Investment (FPI) was approved by the government in June 2005. Under this new bylaw, foreign investors can participate in the TSE for the first time. Initially, however, some limitations have been imposed on foreign investors:
• Foreign investors may own a maximum of 10 percent of each listed company.
• Foreign investors may not withdraw their main capital and capital gain for the first three years of their investment. Repatriation is possible once a year under current regulations.

There is a plan to increase the ceiling on foreign participation to 25% and lower the time limit for transferring the original investment to one year. With the removal of obstacles to foreign investment Iran could potentially have a 2,000-3,000 billion US dollar stock exchange market.[14]

The "Turquoise Equity Fund" from the London-based investment boutique Turquoise Partners is one of the few opportunities for foreign investors to participate on the Tehran Stock Exchange. Turquoise Partners publishes one of the only English newsletters that covers developments of the Tehran Stock Exchange and the Iranian economy called "Iran Investment Monthly".[15]

A subsidiary of Iran's largest bank, Melli Investment Bank with branches in Dubai (UAE) and London, has plans to launch a fund of $300 million to invest in Tehran's Stock Exchange, providing the first chance for foreigners to invest in the Iranian economy. The fund will be composed of blue chip companies such as Iran Khodro and Arak Petrochemical Company (a subsidiary of National Iranian Petrochemical Company), registered in the Cayman Island and managed from Iran.[16]

Iran is also to target foreign investment in its energy sector by creating an umbrella group of nearly 50 state-run firms and listing its shares on four international stock exchanges. Under the privatization plan, 47 oil and gas companies (including PetroIran and North Drilling Company) worth an estimated $90 billion are to be privatized on the Tehran Stock Exchange by 2014. [17]

Firms such as Iran Khodro Company, Ghadir Investment Company and National Iranian Copper Industries Company are currently present in the bourses of Germany, Bahrain and Malaysia (2009).[18]

Growth Potential

So far, the Tedpix index has been driven by domestic investors, including wealthy Iranians, public sector pension funds and the investment arms of state-owned banks. For the index to prosper in the long run, more foreign investors need to make significant share purchases.[19]

The market, with a capitalisation of $37 billion, is trading at a fraction of the earnings multiples enjoyed by Iran's neighbours, while average earnings continue to grow at about 25 per cent a year (2007). According to experts, the economy of Iran has many investment opportunities, particularly on its stock exchange.[20]

Share transfer tax

The Amendment has changed the regulations regarding calculation of tax on transfer of shares and their rights in Iranian corporate entities. In the case of shares listed on the Tehran Stock Exchange (TSE) the tax on transfer of such shares and other rights is 0.5 per cent of the sales price. No other taxes are payable (i.e. capital gain tax).

In the case of transfer of the shares and their rights to other corporate entities (ie. those not listed on the TSE) a flat rate of four per cent of value of the shares and rights transferred applies. No other taxes will be charged. The Amendment has removed the requirement to value the shares in this category.