Formal announcements of Iran’s 100-plane order from Airbus were made this morning, alongside plans for a production tie-up between carmakers Peugeot and Iran Khodro. The deals add to the billions worth of agreements secured by Iranian President Hassan Rouhani in Italy earlier this week as he attempts to drum up investment across the continent.
With sanctions lifted, investors are about to gain access to a middle-income country with a highly educated and cheap labor force, and a population topping 80 million, Clemente Capello, the founder and CEO of frontier and emerging market investment management firm Sturgeon Capital, explained.
‘I mean the opportunities are huge. Iran is too big to ignore,’ Capello said.
But those opportunities extend beyond big business tie-ups, he explained.
Capello, who has developed Sturgeon Capital’s Iranian fund, says Iranian equities are going for cheap, at a price to earnings ratio (P/E) of about five, where most mainstream market stocks are bought at 15 to 20 times P/E. Similarly, dividend yields are totaling around 15 percent, compared to 3 to 4 percent in established markets.
While the country’s 25 percent deposit rate has muted local stock demand, that’s all about to change.
‘It’s what everyone is ignoring, this is the single biggest catalyst,’ he said.
Interest rates are expected about to fall by a ‘massive 10 percent’ over the next 18 months, Capello said, and will be a key driver to valuation. Capital costs will drop, and earnings will rise as credit becomes cheaper and more readily accessible, he explained.
But like any frontier or emerging market, Capello said investors need to be wary of value traps, and make sure that stockholders are aligned with investors.
‘(There are) are lots of large conglomerates who don’t really care about the share price,’ he warned.

‘World aviation industry’s relations with Iran were restored after many years of sanctions with Iran again and we hope long strides will be taken and relying on cooperation and investments of foreign companies the Iranian nation, too, will be benefitted from modern and high quality aviation services in near future,’ said Peter Harbison in an interview with IRNA.
Referring to the Iranian roads of rural development minister’s comments a few days ago on purchasing 140 new planes within the next months and increasing the Iranian passenger air fleet into 500 planes within the next five years, he said that this is a great and unique opportunity for the plane builders, spare part producers, maintenance and overhauling and leasing companies of the world.
He expressed hope that keeping in mind the potentials and needs of the growing Iranian aviation field, the enthusiasm to be competitive among the top world aviation companies, and the world companies interest in making investments in Iran, improving the air travel services to the Iranians will soon reach the international standards’ level.
The CAPA top manager said that the prerequisite for making foreign investments include decreasing the hazards against investments as much a possible and possessing the required financial assets and transparent legal apparatus.

“We felt like the last line of defense of the country’s economy,” said Nasrollah Sardashti, the company’s commercial director. “The nation depended on us to get the oil out to the few markets we had left.”
Back then, Iran cavalierly dismissed Western sanctions, saying the obstacles that the measures sought to erect were easily evaded. But beginning in 2012, when a new round of comprehensive sanctions took effect, commerce with much of the world was choked. Suddenly, the tanker company found itself struggling to get Iranian oil out.
Hours after the most-restrictive sanctions were lifted this month as part of a recent nuclear deal, Mr. Sardashti, wearing a light-blue suit, entertained hundreds of foreign guests, mostly Europeans, as shipbrokers, insurers and journalists celebrated the company’s 60th anniversary.
“We are in close contact with our Foreign Ministry,” said Mr. Sardashti, explaining how the party could be arranged on such short notice. “We told our contacts: ‘Come. Come to Iran. The sanctions will be lifted right before our party.’ We were lucky. It happened.”
Parties and business conferences are happening with greater frequency in Iran today, particularly where European companies are concerned. That point was made clear in President Hassan Rouhani’s trip to Europe this week, where commercial ties were front and center.
In many ways, though, the celebration for the National Iranian Tanker Company, known as N.I.T.C., was more of a reunion than a session to get acquainted, as the global shipping industry welcomed back a partner — not from bankruptcy, but from one of the strictest set of sanctions ever.
For decades, the company, which owns 69 oil tankers, shipped crude around the world for almost all of the oil majors and producers. Its English-speaking members of staff were in daily contact with brokers in all of the major financial markets, proud of the company’s high standards and excellent reputation in a highly competitive industry.
“We really missed them on the market,” said Edwin Remeeus, a team leader at Vopak, a shipping agent based in Rotterdam, the Netherlands, that also stores and handles crude oil and natural gas. Vopak was forced to sever ties with N.I.T.C. in 2012, after having been its agent for over 30 years.
“Every year, they would send us Christmas cards,” Mr. Remeeus said. “You’d think they would be upset, but they understood it wasn’t personal.”
In 2012, the United States Treasury Department identified 58 of the company’s vessels and 27 of its corporate affiliates as extensions of the Iranian state, and it threatened actions against Western companies that used any of those services.
For N.I.T.C., business, long solid, unraveled in a couple of months. First, insurers started excusing themselves, saying that they could no longer work with the Iranian company. Major oil companies including Royal Dutch Shell, Total of France and Repsol of Spain, all longtime clients, said they needed to clear payments before giving new orders, but they complained that banks were preventing them from doing so.
At N.I.T.C. headquarters here, committees were formed to devise ways around the sanctions. First, they changed insurers, using local brokers instead, but their foreign clients refused to deal with them. Then Malta, one of the most accommodating flags to sail under, cut ties, and the company had trouble finding new partners. At first it worked with the microstate of Tuvalu, and it eventually reflagged the entire fleet under Tanzania, widely regarded as a substandard “flag of convenience.”
The ships’ names were also changed, dropping references to their country of origin. The Iran Astaneh became Neptune, the Iran Damavand just Damavand. Before long, the pride of the Iranian fleet was sailing under names like Amber, Horizon and Success.
Iran was accused of other, more nefarious methods of avoiding detection, like turning off signaling systems on its vessels and making ship-to-ship transfers while at sea.
Mr. Sardashti did not want to go into details, but he dismissed the whole period under sanctions as “unfair” and “mean.”
“We had to change our standards; it was painful,” he recalled, adding that he was grateful for the countries and companies that had been willing to help N.I.T.C. in those tough times. But even so, he acknowledged, “gradually, we lost our biggest clients.”
The government started meddling with the company, and many industry insiders were surprised when Hamid Behbahani, a former minister of roads and transportation, was appointed chief executive — even though he had been impeached for falsifying a university degree. He was replaced after a year by Ali-Akbar Safaei, who is still at the helm.
In 2014, when the company was exclusively serving China and five other Asian nations still buying some Iranian oil — limited sales were allowed under the sanctions — it had a glimmer of success when a European Union court ruled that the sanctions against the company were illegal. Still, until the sanctions were lifted, N.I.T.C. gained no new customers.
On Saturday, Iran made its first oil sale to a European company since the sanctions were lifted. But Mr. Sardashti said he had not yet received a call from the buyer, Hellenic Petroleum, to ship it to Greece. When he does, he says, he will have plenty of oil at hand. With the current global oil glut, several of his tankers are being used as floating storage, waiting for buyers.
So far, though, not a single ship had set sail for Europe. “We are waiting for our first assignment,” Mr. Sardashti said.
At the celebration for the company’s 60th anniversary, everybody appeared to want to look ahead, not to dwell on unpleasant developments like the collapse in oil prices or dwindling demand. Over a lunch of rice with saffron, stews flavored with pomegranate and walnuts, and kebabs, smiling N.I.T.C. officials sat with their Western guests, showing cellphone pictures of their now-grown children and talking about business.
“We all hoped that one day the sanctions would be gone,” said Wictor Mansson of the shipping company Affinity in London. “Other companies picked up their share, but in the end we have less tonnage to transport the oil, so their return might push prices down.”
Some obstacles remain, however. Despite sanctions being lifted, financing has been slowed by international banks’ fears of penalties from the United States Treasury Department over sanctions it imposed decades ago for Iran’s state sponsorship of terrorism.
“All our crews have been updated, our standards are still high, we are ready for business,” Mr. Sardashti said. “Now, we hope the others are, too.” (nytimes.com)

International pistachio traders are watching and wondering how Washington’s move will impact export flows from the Middle East nation, and whether it will have a crack at the hitherto closed US market.
The US and Iran, which account for 70-80 per cent of the world’s production, have been vying for the top producer and exporter spot for the past few years as demand — along with other treenuts — has risen thanks to the growing trend for healthier eating around the world.
Chuck Nichols, president of Nichols Farms in California, which grows, processes and ships pistachios, says the Iran issue has been on the US growers’ minds. “People have been thinking about this,” he says.
Iran’s industry executives are confident exports will increase thanks to the sanctions relief. “The transactions will definitely be easier and works are done smoother,” said Mahmoud Abtahi, deputy head of Iran’s Pistachio Association.
“Iran’s pistachio has been exported over 100 years and has secured a foothold in the world market. It is the king of nuts.”
Iran, which has been a pistachio producer since the fifth century BC, managed to regain the position of top producer last year for the first time since 2008, after record crops in the two years to 2015.
In sharp contrast the 2015 harvest in California, which accounts for most of the US output, almost halved to 275m pounds — the lowest in almost a decade — due to adverse weather.
The fall in supply has pushed up Californian pistachios above $5 a pound, allowing Iran to offer discounts to its overseas buyers, especially in China — the largest import market.
Iran has been selling into China between 80 cents to $1 lower than the US product, replacing California as the top exporter, says Richard Matoian, executive director of the American Pistachio Growers.
“We do believe the US will take over as the largest producer in the world and will regain the China market in the future, as early as 2016,” says Mr Matoian.
Europe is another large market where Iran could make inroads thanks to sanctions relief. Although pistachios had not been subject to European sanctions, restrictions on banking and shipping had made trade difficult.
Even with such challenges, “Iranian pistachios have a strong following [in Europe] because of the taste”, says Niel Hyde, a veteran nut trader who is now at Brazil’s cashew processor Iracema.
The key issue for Iranian imports has been the levels of aflatoxin, a poisonous substance caused by mould, and many retailers and nut packers have switched to the Californian variety.
Kees Blokland, trader at Global Trading in the Netherlands, says: “I personally think the pistachios from Iran are more tasty and more flavoursome but the supermarkets will not change that easily.”
Nevertheless, with US pistachio prices having risen steadily for the last eight years, some industry executives expect Iranian pistachios will be fully encouraged to “keep the Californians honest in the short term, if not also the long term”.
The big question is whether Iranians can make inroads into the US. Even before US sanctions were implemented, Iranian pistachio imports were subject to anti-dumping duties of about 300 per cent. With the sanctions removed, a review is to be conducted by the US trade authorities on whether to retain the tariff.
“Our industry will vigorously defend our position” to retain the duties, says Mr Nichols.
Even if the duty is dropped, ambiguity around banking and payment remains, say legal experts. Although various restrictions have been removed, US “primary sanctions” are still in place, which means US citizens are still banned from involvement in commercial dealings with Iran and US banks are still prohibited from clearing dollar transactions related to Iran.
John Whittaker, of UK law firm Clyde & Co, says: “There are a lot of practical and historical issues surrounding Iran sending their nuts to the US, including the clearance of dollar transactions.”
Iranian industry officials acknowledge that things will not change overnight. The country should not expect “a miracle”, says Mr Abtahi.
One main challenge that both pistachio rivals face is the changing weather affecting productivity and water availability.
California’s production was hit by the lack of “chilling hours” or cold days during the 2014 winter, as well as the prolonged drought which has hit groundwater levels. Iran’s pistachio growers, who are mostly private and small-scale farmers, have also suffered water shortages that have raised costs.
Hassan Tabatabaei, a leading pistachio grower, said Iran’s problem was more domestic than international.
“Lifting of sanctions will for 100 per cent bring about stability in transactions, but what is more affecting pistachio production is that precipitation is declining each year,” he says. (ft.com)

The newspaper quoted Mohammad Khodakarami, deputy head of Iran’s civil aviation authority, as saying British Airways officials visited Tehran on Tuesday to discuss resumption of flights. He did not elaborate.
Khodakarami also said both Air France and Dutch flagship KLM have already expressed their readiness to resume flights to Tehran.
Air France said last month it would resume flights to Tehran for the first time in more than seven years starting in April.
A KLM spokesman said the carrier always looks for opportunities for new destinations but has not yet make a decision about resuming flights that were suspended in 2013.
“At this moment there are no concrete plans to open Tehran. KLM follows the current situation concerning the lifting of sanctions against Iran closely,” spokesman Joost Ruempol said, AP reported.
BA also has not announced any firm plans to return to Iran, though Willie Walsh, the chief executive of its parent International Airlines Group, reportedly told a recent conference the airline is interested in flying to Tehran soon.
European carriers stopped their flights to Iran after the West imposed sanctions on Iran over its nuclear ambitions. Currently Iran’s national carrier, Iran Air, has three weekly flights to London as well as two weekly flights each to Paris and Amsterdam.
Earlier this week, Iran said it is also considering direct flights to the United States. Direct flights stopped between the two countries more than three decades ago. Iran and the United States severed air links when Washington broke relations in 1979 after Iranian militants stormed the U.S. Embassy in Tehran and held the occupants hostage.
About 1 million Iranians live in the United States, mostly in California. Thousands fly to Iran every year, often changing planes in London, Amsterdam, Frankfurt, Istanbul and Dubai.
Iran also plans to renew its aging passenger fleet. On Thursday it signed a deal to buy 118 aircraft from Airbus, valued at 22.8 billion euros ($25 billion). Tehran has also expressed interest in buying scores of new airplanes from American aircraft manufacturer Boeing.

The container-carrying cargo train left the Chinese province in the East side of that ancient country and is carrying small-sized Chinese products, such as electronic devices and spare parts for mobile sets.
The investor company for the economic project, Tianmen Co., has announced that this first Chinese train connects China not only to Iran, but to the entire Middle East region.
According to the program designed for this train, it will leave China through Alata Passage in Muslim residing Chinese province of Sinkiang and it will then pass through Kazakhstan and Turkmenistan republics before entering Iran.
The 10,339 kilometer distance that this first China-Iran cargo train will pave will take 14 days.
China expects to boost its Middle East trade using this part of the newly revived ancient Silk Road, including its already blossoming economic ties with Iran.
Yi Wang is one of China’s most famous industrial cities with factories producing small items and many Middle East merchants, including dozens of Iranians are running businesses there.
Some 4,000 economic activists from the Middle East, including Iranians, have established 180 trading companies in Yi Wang, the volume of whose annual trade with the Middle East was $800 million in the year 1015.

After years of economic sanctions and international isolation, the Islamic Republic stands to make an estimated $700 billion off its vast deposits of minerals — such as copper, iron ore, zinc and lead.

‘They are an incredibly mineral-rich nation,’ said Rebecca Keller, a science and technology analyst with the Texas-based global intelligence company, Stratfor.

‘There’s potential for high-quality, fairly low-cost mining in Iran,’ Keller told FoxNews.com Wednesday, as Iranian President Hassan Rouhani tours Europe this week, signing business deals with Western countries clamoring to profit off its natural resources, including its mineral deposits.

Iran has more than 3,000 active mines — mostly privately owned — that contain copper, iron ore and heavy rare earth elements, according to the website mining.com.

‘They’re everywhere,’ Keller said of Iran’s minerals, noting the potential for mining near the Afghanistan border and through a ridge that runs down the middle of the country.

‘They’re also looking into exploiting rare earth elements, but they’re still in the early stages of this,’ Keller said of Tehran.

Companies from the oil sector to car making are jostling to take advantage of the opening of the country of nearly 80 million people. Most sanctions were dropped last week after Iran agreed with world powers on a plan to limit its nuclear capabilities.

Some business deals are ready to be inked, but others are still in negotiation as a few sanctions not related to the nuclear program remain in place, particularly by the U.S., on the trade of goods that could be used for military or intelligence purposes.

In Italy, the government and private companies signed more than a dozen accords with Iran covering the metals industry, oil services, rail transport and shipbuilding.

Iran’s Deputy Industry, Mine and Trade Minister, Mehdi Karbasian, said his country hopes to finalize investment plans worth about $5.4 billion during Rouhani’s visit to the country.

According to Tasnim News Agency, the deals with Italy include joint investments in the steel production chain in southern Iran. Tehran also is expected to seal a contract with Italian and Chinese companies to carry out the second phase of Salco, Iran’s largest aluminum smelter plant, Trend News Agency reported.

At a press conference Wednesday in Rome, Rouhani invited American businessmen to join their European counterparts in investing in Iran and taking advantage of the new era of ‘win-win’ collaboration after years of mutual losses.

‘It’s possible, but the key is in Washington, not in Tehran,’ he said. ‘At the same time today, if American investors and the heads of the American economy want to come to Iran and invest in my country, there are no problems from our point of view.’

Rouhani, a relative moderate elected in 2013, flew to France later Wednesday and was meeting with Economy Minister Emmanuel Macron and a group of French business leaders.

While the potential mineral profits are estimated at hundreds of billions of dollars, experts like Keller say it will likely take time before such wealth can be seen.

‘Unlike oil — which they have the ability to release into the market immediately — it’s going to take awhile for these mining operations to scale up,’ Keller said.

Source: FoxNews with contributions from AP

He urged the Italian Central Bank to cooperate with its Iranian counterpart in the drive to play a more important role in the post-sanctions era in order to facilitate implementation of economic and trade agreements.
Visco welcomed the agreement with SACE which was signed during President Hassan Rouhani’s visit to Rome on Wednesday and assured Seif of the support of Central Bank of Italy to help relations between Iranian and Italian companies.
Italian insurance agency Servizi Assicurativi del Commercio Estero (SACE) has announced its readiness to cover Tehran-Rome deals.
SACE offers a complex range of instruments for credit insurance, investment protection, the provision of sureties and financial guarantees. The insurance includes, from an economic-financial, managing and funding the loan.