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EDITIONS
Monday, 9 December, 2002, 12:14 GMT
Iran's stock rally attracts new traders
Day traders at the public gallery of Tehran Stock Exchange
The view from the public gallery is rosy

The public gallery at the Tehran Stock Exchange is packed full of men, a handful of women and the odd family.

More and more people are regularly going to the gallery to swap gossip, watch the latest market moves and try their hand at making money from share trading.

Enthusiasm for stocks has taken-off because share prices are booming.

And people can get the latest financial information on touch screen computers in the gallery.

Cashing in on growth

As a major oil producer, Iran's economy has benefited from high energy prices over the past few years.

Trading on the Tehran Stock Exchange
Trading takes place electronically
And Ahmed Mir-Motahari, the chief executive at the exchange, says that stocks and shares have been the best way to cash in on improved economic growth.

Mr Mir-Motahari estimates the real rate of return at 22%, and says that three million people are now investing in shares in this way.

"This is a very good return, especially for the people who have small savings and then come here to buy shares," he says.

Little foreign interest

There are more than 300 listed companies on the Tehran Stock Exchange, with a collective value of about $13bn (8.24bn).

Prices at the Tehran Stock Exchange
Iran's stock exchange is one of the world's best performers this year
For the moment, foreign investors are not active on the stock exchange, although Iranian money from overseas has been flooding in.

Despite the rapid rise in share prices, there's no widespread concern that a bubble is developing.

But some traders are already dismayed to find that the recent share price rally has left new shares too expensive to buy.

And that suggests that a bear - or falling - market could be on the way.

World's best

But Haida Purian, editor of Iran Economics magazine, says the Tehran exchange doesn't behave like a normal stock market.

Like the Iranian economy, the stock exchange is dominated by government-owned companies, leaving few shares available to private investors.

And that means that market forces are easily swayed by politics.

"This bubble may burst - not by any economic phenomenon - but perhaps by some political phenomenon," Mr Purian says.

And that makes it very difficult to guess how long this boom will last.

But for now, investors are enjoying one of the best performing markets in the world and only thinking about the next trade.

 WATCH/LISTEN
 ON THIS STORY
BBC's James Whittington
"How long the boom will last is anyone's guess"
See also:

03 Dec 02 | Business
14 Nov 02 | Business
26 Nov 02 | Business
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