Thursday, 5 January 2012

Iran: Investors cool on South Pars bonds

Informed sources say that investors have purchased only 14 per cent of rial bonds that the Ministry of Petroleum sold through domestic banks across the country from 26th November to 1st December to attract funds for South Pars projects.

From the total investment of 5 trillion rials ($4.5 billion) expected to be attracted through selling bonds, only 700 billion rials ($630 million) was raised. Accordingly, the National Iranian Oil Company (NIOC) announced that the bond offer would continue until the end of working hours on 4 December.

Experts believe that this cold shoulder results from an unpredictable gold and foreign exchange market, which attracts more funds and cash inputs. It could also suggest a lower level of overall liquidity in Iran's economy as investors have been attempting to deal with rising inflation.

The oil industry upstream sector in particular has been facing serious financial issues in recent years, which will be aggravated if bonds continue to sell poorly in further phases.

For more news and expert analysis about Iran, please see Iran Strategic Focus.

© 2012 Menas Associates

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