Mohammad Mehdi Navab told reporters that these bonds are not guaranteed by the government or the central bank and are aimed at boosting capital to be channeled for renovating and upgrading national industries and expand public participation in industrial project this year.
He added that the bylaws stipulate that private companies which issue bonds should show profits in the previous two years and have to provide transparent balance sheets of their financial health in the last three years.
"Another advantage of these bonds is that they are convertible to stocks," Navab said, adding the bonds carry low investments risks because they are issued by companies that are financially stable and buyers are exempt from paying taxes on the profits earned.
Secretary General of the Tehran Stock Exchange (TSE) Hossein Abdeh Tabrizi said here last week that with the finalization of the capital market law, the primary market will become more regulated.
Abdeh-Tabrizi told IRNA that since legal supervision over the primary market has not been adequately supervised in the past, the proposed bill, will ensure that the rights of stock market investors will be enforced more thoroughly in the future."
He said another feature of the new bill is the separation of task between supervisory and exchange activities, as is practiced in other exchanges around the world, but at the present is intertwined in TSE.
"Also, the law will provide more legal underpinnings for exchange of shares in the market."
He said straightening capital markets is a vital factor in expediting economic growth by pooling 'uncommitted' capital and channeling it into productive investments.
Another aim is to increase public's participation in the markets which will boost the volume of investments in the economy and reduce the role of the government in the markets.
Abdeh-Tabrizi said over 50 registered companies in the TSE have expressed interest to issue bonds by June 2005.
He said that issuing bonds is a new and innovative instrument in the stock exchange which will add to the variety of products offered in the market therefore attracting more investments.
... Payvand News - 7/18/04 ... --