Homayoun Darabi, a Capital Market Expert, Believes that the Business Risk in Iran’s Digital Economy Is Very High Because Companies Face Severe Tensions with Any Internet or Telecommunications Network Disruptions or Filtering.
According to IDEA, Guidelines for the Acceptance of Digital Economy Companies in the Tehran Stock Exchange Were Issued Yesterday. The entry of the digital economy into the Iranian stock market is not a new topic; however, what is preventing the presence or growth of the digital economy in the capital market of Iran is the subject of discussion here.
Invisible Assets of the Digital Economy
Homayoun Darabi, a capital market expert, stated: The main issue regarding the entry of our digital economy into the capital market is currently facing several challenges. Firstly, most of our digital economy companies are small because they are restricted within Iran’s borders and do not have access to global markets. Except for a few rare startups, most of them are not on a large scale and can be considered small companies.
He continued: The second issue is that the business environment in Iran is limited, and most companies are considered to have small assets, with the majority of their assets being invisible. Pricing invisible assets, even with computer programs, the internet, and software, is very challenging. Therefore, investing in them carries a high risk from this perspective.
The Capital Market Does Not Trust Iran’s Digital Economy
Darabi added: The next issue goes back to the fact that the Iranian capital market does not have enough trust as one of the ways for digital economy companies. Naturally, after investing for the growth stage, they must have larger investments; but because the Iranian capital market is dominated by the raw materials economy, the discussion of digital economies and intellectual assets is less common there. For this reason, digital economy companies face a difficult path to bring themselves closer to the capital market.
Alignment Between Digital Economy Companies and the Capital Market Is Challenging
The Iranian capital market is primarily focused on asset-based companies, which are more easily accepted in the market. For example, traditional manufacturing companies. Darabi added: For this reason, digital economy companies have been trying to prepare regulations in a way that would allow them to attract small and medium-sized company segments. However, it must be said that alignment between digital economy companies and the capital market is still challenging.
They Face Severe Tensions with Any Internet or Telecommunications Network Disruptions
He emphasized the vulnerability of digital economy companies in Iran: The business environment risk in our digital economy is very high, and this issue cannot be overlooked.
These companies differ from traditional companies and face severe tensions with any disruptions in the internet, telecommunications networks, or, in fact, issues related to filtering. From this perspective, there is a very high risk. Therefore, the inclination to invest in these companies is lower. The issue of capital migration from these companies also exists.
Problems Will Persist
This stock market expert added: All these issues have made it challenging for digital economy companies to enter the stock market. Perhaps this problem will continue to exist unless intermediary institutions systematically participate in enlarging these companies and strengthening and reducing their risk. In fact, they need to make them more stable through capital injection and financial expertise to enter the capital market.
He concluded: In this regard, regulations are changing to facilitate the entry of digital economy companies into the stock market. However, it should be noted that the problems these companies face are multifaceted, and it does not seem that we will witness the resolution of these issues in the short term.
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