In an interview with Iran’s Capital Market News Agency (Sena), Ali Bigzadeh discussed the role of the capital market in controlling liquidity and curbing inflation. He stated that this topic has long been a key consideration, as the capital market encompasses two primary segments: the primary market and the secondary market. Accordingly, the absorption of liquidity for productive sectors primarily occurs in the primary market.
Bigzadeh added that, in the primary market, this is facilitated through the establishment of new public joint-stock companies or capital increases in existing companies. Thus, these mechanisms serve to direct liquidity toward the capital market. He continued by explaining that companies can pursue capital increases using methods permitted under the Commercial Code, such as rights issue waivers or share premiums, which help channel a portion of liquidity into the capital market. Additionally, during initial public offerings (IPOs), investors can offer and liquidate part of their shares, redirecting this liquidity back to the company through various means to support production activities.
He emphasized the need for special attention to the primary market to enable financing through equity-based or debt-based methods, such as various Sukuk instruments at appropriate rates, thereby facilitating the funding of production and transferring a portion of societal liquidity to the capital market.
Regarding the Seventh Development Plan and the approaches that policymakers should consider to further develop the capital market, the CEO of Tamadon Investment Bank noted that the market requires stability in laws and regulations, as well as in macroeconomic variables, which would enhance investor confidence. According to Bigzadeh, pricing mechanisms should also be formulated based on economic realities, exchange rates, and industry conditions, with strict adherence to such formulas. He pointed out that building trust can therefore be achieved through two avenues: regulatory stability and market predictability to prevent the erosion of investor confidence.
In another part of his remarks, Bigzadeh addressed the longstanding issue of incomplete government projects in industrial and infrastructure sectors. He suggested that these projects should be made viable by offering tax incentives and guaranteeing their revenue streams, as private sector investors will not engage unless the internal rate of return matches what they can achieve in other economic sectors. This necessitates appropriate regulatory frameworks
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