In 2005, the Majlis passed the bill for the establishment of investment funds that might be involved in trading at the TSE, purchasing participation bonds and investing in companies outside the TSE.

In the closing days of the last Iranian year to March 2008, a number of brokerages received permits from the Securities and Stock Exchange Organization to set up investment funds, MNA reported.
“To ensure a more dynamic stock market, five investment funds will begin operating in the bourse with the authorization of Securities and Stock Exchange Organization,“ said the head of the organization, Ali Salehabadi.
The funds, which will operate in the stock exchange with a minimum capital of five billion rials and maximum 50 billion rials, include Sahm Ashna, Hafez, Nahayat Negar, Saderat Bank and Khobregan investment funds. Later, Bank Melli of Iran Brokerage also received the permission to establish the sixth fund.
Investment fund, which are variably called managed fund, mutual fund or simply fund, is a way of investing money with other people to participate in a wider range of investments than may be feasible for an individual investor, and to share the costs of doing so. Large markets have developed worldwide around collective investment and these account for a substantial portion of all trading on major stock exchanges.
So far, three funds including Hafez, Saderat Bank and Nahayat Negar have managed to increase their capitals to over five billion rials and were officially allowed to purchase shares.
The idea of establishing such funds in Iran was first raised in the 1990s. However, in the absence of laws on creating such funds, it was put on hold.
In 2005, the Majlis passed a bill on the establishment of investment funds for trading at the Tehran Stock Exchange (TSE), purchasing participation bonds and investing in companies outside the TSE.
Salehabadi listed three main advantages of such investment. “One of the main advantages for investors, particularly those who lack sufficient information of stock trading, is the reduction in investment risk (capital risk) through diversification.“
Investment in a single equity may do well, but it may collapse for investment or other reasons. If the money is invested in such a failed holding the investor could lose his/her capital. By investing in a range of equities (or other securities) the capital risk is reduced. In other words, the more diversified the capital, the lower the capital risk.
The other advantage is that those with limited capital, investors who do not have enough knowledge to evaluate the stock market and individuals who do not have enough time to be involved in trading in stock exchanges, can indirectly purchase shares through investment funds.
Since the funds are usually managed by professionals, individual investors can have more returns with less concern.
The other advantage is that an investor can claim his money within seven days after requesting for it. This is while it takes more than seven months for an investor who directly bought shares of a company to receive his dividend.
It is hoped that the above advantages would help the funds channel idle capital into the stock market. If the funds which are in the beginning of the road become successful, it would also be to the advantage of the national economy.
The economy is suffering from runaway inflation. The country experienced a record 18.4 percent inflation in the last Iranian year.
As experts rightly believe, high liquidity caused by soaring oil revenues and excessive withdrawals from the Oil Stabilization Fund fuels inflation.
If the funds would be able to make themselves attractive for investors, especially unprofessional individuals, it would help reduce liquidity and inflation simultaneously as these two factors go hand in hand.
To achieve the objective, managers of the funds need to adopt a long-term and proper strategy to make investments in shares with high returns.

Iran will channel gas it planned to sell to the UAE Crescent Petroleum for domestic consumption if a long-running price dispute continues.
Tehran has given ultimatum to Crescent several times in the past to resolve its differences over gas prices with Iran, Press TV wrote.
A strenuous negotiation process between Iran and Crescent, a shareholder in the United Arab Emirates energy firm, Dana Gas, began after the agreement was signed in 2001.
Iran increased its initially proposed price, citing a sharp rise in international gas prices since the time the contract was agreed upon.
Talks between the two parties have been at a standstill since 2006, Moj news agency reported.
Oil Minister Gholamhossein Nozari recently said that should Crescent not agree to the new price, the initial agreement between Iran and the company would be scrapped.
Iran’s offshore Salman field in the Persian Gulf was slated to supply gas to the UAE to meet the growing need for natural gas brought about by an increase in the number of factories and energy consumption.
Crescent announced in February that discussions between the two sides are continuing but it seems a satisfactory resolution has not yet been reached.
Under the initial deal, Iran was to supply 600 million cubic feet per day of gas to UAE.

Ministry of Commerce has announced new regulations for import of vehicles as a measure to ensure only the latest models are brought into the country.
Technical Committee for Vehicles has informed importers that in the current Iranian year (March 20, 2008 to March 20, 2009), following registration and entry of the vehicle through official customs channels, the vehicle must not have passed one year since the date of manufacture for passenger car, two years for trucks and five years for motorized construction and mineral extraction machines.
The new rules comply with the by-law of the regulations for imported vehicle.
On conditions wherein these institutions are in charge of imposing certain standards on imported goods, the new decree allows that but stresses it be accomplished in the shortest possible time, Nourlaw.com reported.
Concerning domestic production which the said bodies are protecting by restricting importation, the decree stipulates that ’any protection of domestic products shall be undertaken solely by means of changing the import tariffs (duties)’. Article 160 of the Development Plan, ministries and governmental entities are specified in this connection.

Sri Lankan oil minister said in an interview with Japan’s Kyodo news agency that Iran has decided to increase investment in an oil refinery development project in his country to one billion dollars.
A. H. M. Fowzi added that Iran’s President Mahmoud Ahmadinejad has allocated this amount for the purpose, which would cover 70 percent of the investment for the refinery’s expansion, in the form of a ten-year loan with a five year grace period on installments.
The minister added, “Iran had earlier provided the oil we need in Sri Lanka free of interest for four months.“
Iran is the largest supplier of crude oil to Sri Lanka.
According to Kyodo’s report, Managing Director of Sri Lanka’s state run Ceylon Petroleum Corporation (CPC) Ashanta Domel also said that the pilot study on increasing the production of Sri Lanka’s only refinery from 50,000 to 100,000 barrels per day has been completed by Iranian oil engineers.
Domel added, “Iran would provide the major part of the required funds for expansion of this oil refinery (70 percent) and the CPC would cover the rest (30 percent).
The minister added that the project would yield significant profit for investors, adding, from the economic point of view, the ministry, too, is interested in making investments there.

One senior executive from Total says no energy deal can be signed in view of the current US-led sanctions against Iran but they will keep things warm in the oven for the time being.

Under pressure from the United States, France’s Total and the Anglo-Dutch Shell Group claim they are unlikely to commit to two major gas projects in Iran’s South Pars field by the June deadline set by Tehran, ’because of concerns about financial and political climate’.
According to IRNA, Oil Minister Gholamhossein Nozari reiterated in mid-April that June would be the final deadline for Shell and Total to commit to their respective projects before their stakes are offered to rivals, most probably China.
Total is studying prospects to develop a $10 billion liquefied natural gas (LNG) project using feedstock from phase 11 of the South Pars field, while Shell is hoping to explore phase 13 of the field.
One senior executive from Total told Meed.com that no deal could be signed in view of the current US-led sanctions against Tehran.
“We have to recognize that it would be inappropriate to commit billions of dollars of investment today,“ claimed the executive. “We keep things warm in the oven but at the same time there is no possibility of huge investments as things stand.“
Total says the complexity of constructing two LNG trains when there is little infrastructure in place adds to the problem. The trains are due to produce about 4.5 million tons a year each.
“This is the first LNG project in Iran so you can imagine how even more complex it is,“ says the executive. “The technical and contractual side requires time but, taking into account the situation today, we cannot make these huge investments.“
Shell says its technical work on the project is continuing but is unlikely to be completed before the June deadline. The company declined to say whether it would commit to the project.
All things considered, the oil majors should appreciate that Europe’s reduced trade with Iran as part of the illegal western sanctions is not hurting the Islamic Republic at all. This is because competitors from Asia are stepping in to fill the gap.
Consequently, Iran’s trade with Asia and Pacific nations has more than doubled in the past three years to reach about $90 billion in 2007. That is expected to grow to more than $100 billion this year--although trade with the European nations has shrunk.
Desperate to isolate Tehran, the United States has long imposed sanctions targeting the Islamic Republic’s oil industry and other areas. It has also been urging foreign firms to steer clear of the Islamic Republic. But as maintained by Iranian oil officials, sanctions are not deterring investors or hindering the country’s oil industry as ’they are old, dull and ineffective instruments and for the same reason foreign companies are still coming to invest in Iran’.
It is true that Iran needs foreign investment and expertise to substantially expand output from the current level (about 4.2 million barrels per day).
But it is equally true that industrialized nations need Iran’s oil and gas which explains why they keep appealing to OPEC to increase supply.
Companies such as France’s Total and the UK/Dutch Shell Group which are still unsure about whether or not to finalize their deals on developing two major oil and gas assets in the Persian Gulf should take note of the irony: The very same countries (US and UK) which are pushing them to help isolate Iran and hinder its oil industry, are also asking OPEC, in which Iran is the second-biggest producer, to raise output!!
So, as things stand, they would be better off ignoring US calls and taking their chances before their stakes are offered to rivals as in this particular case not all the best things come to those who wait.
In other words, Tehran cannot wait longer and will not slow down the engine of its economy just because two of its customers want to keep things warm in the oven and are concerned over the so-called ’financial and political climate’ which, by the way, is a thing of the past.

National Iranian Gas Company (NIGC) is to set up four new companies to stimulate exploration and production, after receiving $1 billion from Oil Stabilization Fund in late 2007 to finance projects in the coming year.
According to Fars news agency, the four new subsidiaries of NIGC are Gas-Khodro, Gas Transmission, Gas Storage and Iran Gas Trade.
NIGC, itself a subsidiary of the state-run National Iranian Oil Company (NIOC), has been stepping up activity in the last few months to attract international interest in the country’s giant gas sector.
NIGC signed a 25-year natural gas purchase deal with Swiss firm EGL in early March estimated to be worth between $15 billion and $20 billion.
The firm is also finalizing a deal to supply natural gas to Bahrain at a rate of one billion cubic feet per day (cf/d) from 2010 which may eventually rise to two billion cf/d.

Director general of West Azarbaijan Customs Office has said that Iran exported $1.7 billion worth of non-oil goods to Iraq in the year to March 19.
Speaking at the inaugural ceremony of Tamarchin border crossing, Mohammad-Hossein Bagh-Enayat said that the commodities were exported to Iraq via 13 border points including Tamarchin in West Azarbaijan.
The center for development of Iran-Iraq economic relations is to implement a number of plans to boost export of commercial products to Iraq, Bagh-Enayat said.
Kermanshah province in western Iran, ranks first in terms of exports to Iraq, he added.
According to ISNA, Iran’s non-oil exports increased by 15.14 percent last year compared to the preceding year.

Bank Mellat is to launch a department of energy to facilitate the administrative affairs of oil, gas and petrochemical projects and make funds available for them, disclosed the bank’s managing director.
Speaking on the sidelines of the ongoing 13th International Oil, Gas and Petrochemical Exhibition in Tehran, Ali Divandari pointed out that currently over 70 percent of foreign trade pertains to the energy sector, according to IRIB.
Bank Mellat holds $23 billion in financial assets, a major portion of which is related to the energy sector, the official explained.
The banker anticipated that about 50 percent of Bank Mellat’s assets would become free of other investments and shifted to energy projects. Given the 10-year experience of Bank Mellat in implementing energy projects, he said, the infrastructures have been prepared over the decade ago and the projects have been implemented in earnest since three years ago.

Managing director of the National Iranian Drilling Company has said his company plans to invest $200 million in the sector during the current Iranian year to March 2009.
Iran drilling industry is both self-sufficient and self-reliant and can undertake drilling activities anywhere in the world, Fars news agency quoted Haidar Bahmani as saying on the sidelines of the 13th International Oil, Gas & Petrochemical Exhibition currently underway in Tehran.
According to Bahmani, the 1980-88 Iran-Iraq War and the US sanctions on Iran helped make the drilling sector self-reliant.
Iran invested $350 million in the drilling industry during March 2007-2008 and is expected to invest an additional $200 million this year.
National Iranian Drilling Company commenced its operations in 1979.