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All in Economy
◢ Two new investments by a Dutch-registered company have pushed Digikala and Café Bazaar to historic new valuations. Iran's e-commerce leader and largest app store are no longer the visionary startups of a few years ago, but rather ambitious and established enterprises.
◢ The investments were completed discretely, but point back to Sarava, which has reportedly raised new capital in Europe. The venture capital firm is poised to further expand its dominance in Iran's tech sector.
◢ A new crop of entrepreneurs are making Iran into a hub for hardware development, drawing on the country’s deep pool of mechanical and electrical engineering talent.
◢ One such company is Pedasys, which has designed and manufactured a lower-body exoskeleton to allow paraplegic or elderly individuals who are lower-limb disabled to walk. The company is backed by Shenasa, the venture fund of Pasargad Financial Group.
◢ There is growing consensus that the core constituency of the recent wave of protests in Iran is working class youth who feel "forgotten" in the country's economic plan.
◢ The expected post-sanctions windfall has yet to materialize and the Rouhani administration will need to decide whether it will compromise on its austerity-type budgets in order to offer some near-term economic relief.
◢ Mineral Commodities Limited, a listed Australian junior mining company, has entered the Iranian market. MRC has signed agreements that give it rights to majority stakes in two mining projects producing gold and copper in the northwest of Iran.
◢ The company has reviewed thirty projects so far, and has earmarked a USD 2.4 million dollars for further exploration in 2018.
◢ Unilever has entered into a new joint venture with Iran's Golestan Company. The partners will develop and manufacture new food brands and product lines for the Iranian market.
◢ The decision to enter into a joint venture reflects a rising trend among international FMCG companies active in Iran. A combination of political circumstances, commercial drivers, and consumer preferences have encouraged ownership of local manufacturing interests.
◢ Swiss auto parts company Autoneum has entered into a new license agreement with Ayegh Khodro Toos to manufacture components for a new locally-produced Peugeot SUV beginning in 2019.
◢ The deal points to the potential in Iran's auto parts sector, where private sector companies, which are often SMEs with specific areas of expertise, dominate. Projections suggest exports of Iranian auto parts could rise to USD 6 billion by 2025.
◢ Second Sight has entered the Iranian market with two procedures in Shiraz. Patients were implanted with the Argus II system, which provides an artificial form of useful vision to those suffering from degenerative loss of sight.
◢ The company entered into a partnership with Iranian firm Arshia Gostar Darman in 2016 and holds a license from the U.S. Department of Treasury that permits the sale of its devices Iran.
◢ In a series of tweets published on Tuesday, Total's press office pushed back on reports that the company is rethinking its Iran strategy in light of pressure from the United States.
◢ The tweets emphasize that Total CEO Patrick Pouyanné sees no political barriers to the South Pars gas deal, and is simply waiting to see whether following Congressional action legal conditions will allow the deal to move forward.
◢ Morteza Lotfi, the newly appointed head of SHASTA has recently announced a new effort for SHASTA to divest from a large portion of its portfolio, offering a second chance at the privatizations pursued a decade ago.
◢ But political barriers and a dearth of capital, particularly from foreign investors, risks rendering SHASTA's plan dead on arrival as Iran seeks to liberalize without crucial liquidity.
◢ A new survey by Bourse & Bazaar and IranPoll finds that business leaders believe Trump's rhetoric has slowed the pace of trade and investment by multinational companies in Iran.
◢ However, the results come at a time when the underlying commercial momentum seems strong. This suggests that Trump's words are having an impact not on those most directly working with Iran, but on the stakeholders on whom they rely.
◢ New deal between Azimut Group and Mofid Securities represents a landmark deal for Iran's financial services sector. Azimut Group is taking a 20% stake in Mofid Entekhab.
◢ The two companies will launch new investment offerings, largely targeting foreign investors. A capital raise will support the expansion of the local sales and advisory teams.
New survey conducted by IranPoll in partnership with Bourse & Bazaar looks at Iranian attitudes towards economic reform and foreign investment with new detail. Iranians demonstrate high degree of openness to foreign investment and the economic reforms necessary to facilitate that investment. But they want multinational companies to do more to localize their offerings effectively.
◢ MTN Group presented its interim results on August 3rd, which included an extensive look at the operational and financial progress in their Iran joint-venture, MTN Irancell.
◢ The transparent look at Iran for investors, analysts, and media is somewhat unprecedented and shows a future where major multinationals will report on Iran in the same way as any other market.
◢ European business leaders and policymakers will convene with their Iranian counterparts at a critical time during the 4th Europe-Iran Forum in Zurich on October 3-4, 2017.
◢ The business community will be meeting to set an agenda for trade and investment as the Trump administration signals its skepticism regarding the Iran nuclear deal.
◢ Japan is one of Iran's major historical trading partners. But Japanese companies have fallen behind European, Chinese, and Korean firms in post-sanctions investment.
◢ Japanese companies are now looking to European firms as they seek to balance political and reputational risks, especially in the absence of a high-level delegation to Iran.
◢ The arrival of Telepizza, a global fast-food brand, is a significant development for Iran's food service sector.
◢ The terms of the master franchise keep economic dividends in Iranian hands, and the new entrant will likely spur new investment and improvements in offerings across the sector.
◢ On Monday, Total will sign a long-awaited USD 5 billion deal to develop Iran's South Pars gas field, becoming the first international oil company to commit to a post-sanctions investment.
◢ The Total deal indicates rising confidence that political and banking challenges can be addressed, and the contract signing will likely buoy investor confidence across sectors.
◢ To win foreign investment, Iran's needs to boost development expenditures. But expansionary fiscal policy will require a new source of revenue, as oil sales remain stagnant and tax rises remain politically risky.
◢ A sovereign debt sale, long discussed by Iranian officials, is the fundamental way Iran can find the revenues to self-fund growth. The Rouhani administration must focus on making its bond offering a reality.
◢ In early April reports suggested that Iran Air would acquire its first Boeing 777-300ER nearly a year early, purchasing a plane originally built for Turkish Airlines.
◢ But the deal now seems dead and the aircraft has not made the expected flight to Victorville, California for repainting in the Iran Air livery.
◢ Start-up ecosystems in Iran, Pakistan, and Afghanistan show great promise, but entrepreneurs in these three countries remain isolated from one another.
◢ These entreprenuers would benefit from more regional programs that encourage collaboration and shared learnings. Programs on offer in the ASEAN countries offer a compelling model.
