Rewritten Title: A Generation’s Retreat: Unpacking the Iranian Youth’s Hesitancy Towards the Domestic Stock Market
Article:
A significant generational shift is underway in Iran’s investment landscape. Financial experts and market analysts are examining why the younger generation, particularly those in their late teens and twenties, is showing a marked preference for global financial markets over the domestic stock exchange, posing a long-term strategic question for the nation’s capital market.
The Ghost of a Market Crash
A key factor cited for this reluctance is historical precedent. The memory of the severe market downturn in August 2020 remains a powerful deterrent for both these young investors and their parents. This event left a lasting scar on the collective investor psyche, creating a barrier of caution. Furthermore, younger investors, often seeking faster returns, find the limited daily price fluctuation bands on the Tehran Stock Exchange (TSE) less appealing compared to the perceived opportunities in international platforms.
A Conversation with a Market Veteran
To understand this dynamic better, we spoke with Naser Keshavarz, one of the capital market’s most experienced managers. He provided a stark analysis of the challenges and potential pathways forward.
On Youth Aspirations and Global Markets:
“The path for Generation Z to achieve their basic needs—housing, a car, marriage—has become very long,” Keshavarz stated. “They see two primary routes: emigration to realize their dreams abroad, or engaging in high-risk, leveraged trading on global markets to accelerate their financial goals. The current structure of the domestic market does not cater to this urgency.”
A Prescription for Attracting Youth
Keshavarz believes attracting this demographic requires fundamental changes. “This will only happen if we diversify the income-generating instruments available within our capital market,” he explained. “By introducing more sophisticated and varied financial products, we could see a gradual return of this generation. Additionally, widening the daily price fluctuation bands could inject more excitement, attracting those with strong analytical skills who seek dynamic trading environments.”
The Macroeconomic Horizon and Its Impact
The veteran manager connected the market’s fate directly to broader economic developments. He expressed optimism regarding ongoing negotiations concerning Iran’s potential removal from the FATF blacklist and the prevailing post-conflict stability.
“Should Iran regain access to the global interbank network, we could witness significant positive developments,” Keshavarz predicted. “This would likely influence and lower domestic interest rates, as it would enable the government and the banking network to borrow from international banks.”
A Ripple Effect on Capital Markets
This access, he argues, would ease the financing of major projects. “The current pressure on the market from high interest rates and the competition from fixed-income investment funds would be alleviated. We would then likely see capital flow out of these funds and back into the stock market,” Keshavarz elaborated.
The Strain on Domestic Financial Institutions
The interview also shed light on the immense pressure facing domestic financial institutions themselves. Keshavarz, who heads Iran’s oldest brokerage, highlighted a critical issue: a low overall market valuation that is unevenly distributed among a growing number of financial entities.
“This limited revenue potential, coupled with constantly rising operational costs, has become a massive challenge for the brokerage industry,” he noted. “Many brokerages are operating at a loss, and even the profitable ones see margins that are barely justifiable from a financial standpoint.”
A Call for Stability and Reform
Looking ahead, Keshavarz issued a cautious warning. “Unless a positive event occurs to channel resources toward the capital market, we will see a shrinking revenue pie for financial institutions. In such a scenario, it will be impossible for many companies to continue operations.”
His primary recommendation to authorities is for immediate stabilization. “While lowering interest rates may not be feasible in the short term, the minimum expectation from market activists is that relevant bodies prevent rates from rising further from their current levels,” he stated. “There is also a need to accelerate the move toward a unified exchange rate, which would allow exporting companies to reap greater benefits.”
The convergence of a skeptical youth, strained financial institutions, and the potential for international economic reintegration paints a complex picture for Iran’s financial future, one that policymakers will need to navigate with care.