Saturday, October 08, 2005

Iranian Stock Market In Free-Fall
As Nuclear Crisis Deepens

Well, how will a totalitarian regime deal with this problem?

TEHRAN, Oct 2 (Reuters) - Investors are bailing out of Iran's stock market, preferring gold and foreign bourses while international pressure ratchets up against Tehran's disputed atomic programme, traders said on Sunday.

The total bourse capitalisation had dropped to $38.2 billion dollars on Sunday, down from $45 billion in late June when conservative Mahmoud Ahmadinejad won a landslide presidential election victory.

The TEPIX all-share index stood at 10,151 points on Sunday, down 27 percent in the 14 months from August 2004, when it stood at 13,880.

"Everything depends on the nuclear negotiations, and the market really craves good news," said Akbar Zarganinejad, the head of a leading brokerage.

Iran stands on the brink of referral to the U.N. Security Council for possible sanctions after failing to convince the world its atomic ambitions are peaceful. Iran insists it needs atomic technology to fuel power stations.

"Unfortunately, the small stockholders' fears can affect the share indices dramatically," Zarganinejad said.

He added the market had taken some solace from the appointment of former Economy Minister Tahmasb Mazaheri as a deputy minister charged with arresting the falls on the Tehran exchange.

Mazaheri held meetings with Tehran bourse officials on Saturday and is due to report to the cabinet on Sunday.