Odd Lots - Lots More on What's Going On in Iran's Markets

Episode Date: June 27, 2025

Iran is a huge country with a sizable stock market. And yet, years of sanctions and other restrictions mean it’s tough to even look up its stock prices (much less invest there.) In this episode, we catch up with Maciej Wojtal, CEO and CIO of AmtelonCapital, an Amsterdam-based fund that specializes in Iranian stocks. We talk about what the past week has been like for the market, what he’s hearing from people on the ground in Tehran, plus disruptions to businesses and oil. We talk about how Iranian investors handle major geopolitical risk and the outlook from here.Read more: Iran’s Khamenei Says US Intervention in War Achieved Nothing Only Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox — now delivered every weekday — plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlotsSee omnystudio.com/listener for privacy information.

Thanks for listening to Odd Lots. Follow the show on Amazon Music for more future episodes or just ask, Alexa, play the Odd Lots podcast on Amazon Music. Bloomberg Audio Studios, Podcasts, Radio News. Machia Voital. Yes. Anyway. It's a typical Polish name, and it's a difficult one, and there was no English equivalent. My mother speaks like nine languages, and she was a linguist, and she said she found. Polish to be the hardest.

And she even, like, speaks like some, like, she's learned, like, some Russian and some Malay and all this. Russian's supposed to be the hardest. And she said from a pronunciation standpoint, she found Polish to be the hardest. Anyway, much of what, though. Yeah. I did a dead list. I'm both the most popular trader and most successful trader at Citadel.

Fed is going viral. Uh, barges. This is an after school special except. I've decided I'm going to base my entire personality going forward on campaigning for a strategic pork reserve in the U.S. Black gold. These are the important questions. Is it robots taking over the world?

No, I think that like in a couple of years, the AI will do a really good job of making the Odd Lots podcast. One day that person will have the mandate of heaven. How do I get more popular and successful? We do have the perfect guest. Welcome to Lots More where we catch up with friends about what's going on right now. Because even when Odd Lots is over, there's always lots more. And we really do have the perfect guest.

One thing we have learned in all our episodes looking at the Iranian stock market, and there have been a couple. Yes. But one thing we've learned is that Iran is actually the 37th biggest economy in the world by nominal GDP. Can you guess like another economy that is roughly that size? Oh, that's a really, so what is roughly similar to the Iranian? I don't know. Go on. Okay. Well, one of them is Denmark. So, you know, that's pretty big. But then when you start looking at things like geographical size, Iran is, I think, the 17th biggest country in the world by geographical size. It has a lot of people as well. So, you know, similar to Turkey in terms of population. I know, you know, I know the population now. Oh, do you?

Yeah, because Ted Cruz got stumped on it when he went on Tucker Carlson show. So we all know that Iran has a population of around 90 million. Should have listened to odd laws. No one is ever going to make that mistake again in public. That's right. That should have been my first question. Can I say something? When there's geopolitical events happening in the world on a weekend when nothing is treating. So one that you can look at what crypto is doing.

But every once in a while when I'm in true market, sickom mood, like I'll actually check like, oh, what is the Saudi market doing on a Saturday or what is the Tel Aviv market doing on a Sunday? That's not sicko mode. That's just being international. Well, they were supposed to have the weekends to not be looking up. But most of the time, they're not, point is everyone to know why I'm like, oh, I'm going to check in and see how Tel Aviv is trading on a Sunday or something like that. You could look at currency markets. That's how you know something is happening. Yeah. But the one market that you can't really look up is Iran's stock market and the Tehran stock exchange specifically, which again, as we know from previous episodes, has more than 600 companies and is worth, I think it was almost $100 billion.

I don't know if it's still that much, but I'm always really... It's around 150 billion dollars. 150. Oh, wow. Okay, we're speaking with Matia Voital. He is CEO and CIO of Antelon Capital, which is an Amsterdam-based fund manager, which specializes in Iranian stocks. He's been on the show a couple times before, and we thought we would talk to him again

just to try to get a sense of what's going on in terms of Iran's economy and its stock market. What is going on? If I can just comment on one thing, because the way you introduced Iran is the perfect way to show the country. It's the size of Turkey in terms of population and actually geographical size as well. But if you compare the economy of Turkey and Iran, it's around five times smaller. So Iran is around five times smaller. And if you look at the composition of the economy, Turkey has no natural resources. So they have to import the whole energy commodities they consume and so on.

Iran has a similar size of potential non-commodity GDP that it could grow to. So from the current, let's say, $250 billion to $1.1 trillion GDP that Turkey has, but also on top of this has resources that are actually, if you combine gas and oil, they're bigger than Saudi Arabia's. And Saudi Arabia is another $1.3 trillion economy. So this is a good way to just frame Iran as to show Iran as, you know, big country that should really be having much bigger economy because of sanctions, various reasons and so on, it's been underdeveloped. But the scale of this underdevelopment is like 10x.

Wow. And because of the sanctions, we can't actually go and look up what's happening in Tehran stock market. So why don't you give us an overview of what it's been like for the past week, given geopolitical events? So for the past week, it was difficult for everyone to check what was going on in Iran, because internet was shut down, basically. So I could communicate with my team on the ground into Iran once a day when they had signal. And sometimes it was WhatsApp that was working, sometimes telegram, but it was maybe once or twice per day. So what was going on in the market was simply nothing. So the stock market hasn't opened.

The exchange of fire between Iran and Israel happened on a Friday, which is weekend in Iran. And then on the following Saturday, there was an important religious holiday. So the market, and actually the whole economy was supposed to be closed anyway, the economic activity, the market was supposed to resume on a Sunday, but they didn't open. So the market, the stock market, pretty much most of the currency market, has been closed for the last two weeks. Zooming out for a second. Actually, there are two really things that strike me.

One, this is true frontier market investing when you're in a position in which you literally cannot easily communicate with your team on the ground because there are lack of internet or lack of communications. But it strikes me that in some sense, this is what the fund manager gets paid for because for many reasons, including the fact that it's not trivial to look up data or even access these markets. A lot of investors are never going to be participating in this market. And then you layer in on all these additional complications. Like this is essentially, at least in theory, the deep risks that in theory you get compensated for. Yeah, you get compensated for actually giving access to the market because it's very difficult or impossible to get access at this moment as a non-resident in Iran to the local stock market. But also you get paid for solving all the operational programs. We have quite a long track record in Iran.

And the main thing actually that we are really proud of because investing when everything is priced for war is fairly easy. And also we have a market that is very inefficient because it's driven by retail investors. Like 90% of daily flows, they're coming from retail. So there is a lot of alpha, a lot of inefficiencies that you can harvest. But the real issue is our operations. One thing is due diligence. I mean, you know, a lot of sanction restrictions, which are not on the whole country, but were related to. many different entities, sectors, and so on.

So we have to do due diligence on every single decision you're taking, before every decision you're taking. But also you need to solve the problems. For example, the problem of exchanging currency, making transfers. Iranian banks are not connected to the SWIFT system. There are specialized banks that actually do, for example, payments for humanitarian trade with Venezuela, or Iran. So food, medical devices, this is never under sanction.

and you need to be able to pay for it. But those transfers take like nine months to execute, right? I remember we once had to process a payment for a very, very official way. We had to have the signature of the actual minister in Iran approving the payment, right? So it took nine months altogether. But there are other ways, there are other corridors, payment corridors, that across emerging markets, including Iran, that make it much more efficient. So, for example, right now, when you have the stock market, the currency market were shut down,

but you could track the exchange rate, what's going on with the exchange rate of the Iranian Real versus dollar, either on telegram chats, but also on cryptocurrency exchanges. So you have, you know, liquid market on stable coins versus Iranian Real inside of Iran, where, well, liquidity was limited during the last period anyway, but we could see the changes. So we knew that $1 before the war was at around $830,000 reels per $1. Then it went up roughly 15% to $950,000. And now after the ceasefire, it's back down at $850,000. So you can track the market.

You can actually make transactions depending on the liquidity, but it is possible. And to be honest, I mean, when I saw those exchange rates moves, 15%, when you, have a war where a lot of commentators were saying that this could turn into a massive worldwide conflict, that 15% in a country like Iran, I would say that this is your usual volatility on the currency market. Wait, so when you're talking to your team on the ground, when you can get hold of them, what are the questions you're asking them exactly? Because the markets are closed, so presumably you're not marking your portfolio to market on a

daily basis. But what information are you trying to get? Well, the first few days, the only information I was interested in was if they were safe, to be honest, because, you know, the, what residents of Tehran and some other cities experienced was they've never experienced just explosions in the city. It's like the older Iranians compared to the 80s when Iran was fighting Saddam Hussein in Iraq. And this is when, you know, the last time when someone was firing missiles at Iranian cities. So after a few explosions that were too close to home, they basically evacuated. They moved to smaller cities. And this was a big trend in Iran.

So in Tehran, a lot of residents were just relocating out of Tehran. Tehran is a big city. It's like 12 million people. And they were moving mainly north to some smaller cities by the Caspian Sea. So you had massive congestion. People were spending hours in traffic jams trying to get out of Tehran. there was not enough petrol on gas stations just because of this peak in demand. You had some petrol rationing.

And then I was asking them, okay, so is the economy working, not working? So everything that was non-essential basically was closed. So you couldn't, I don't know, buy building materials or anything like this. But groceries, pharmaceuticals, well, gas stations, banks, this was all open and working properly with some disruptions. But those disruptions, for example, if you wanted to buy groceries in north of Iran, where everyone has just relocated, you had some bottlenecks, logistical bottlenecks. So distribution was not fast enough. So you had some shortages just for a little while. With banks, well, some branches were not operating at 100% capacity, but two banks got hacked.

So you had some cyber attacks on two banks in Iran and one cryptocurrency exchange. the rest of the banking sector was working without any distractions. You could get cash from any ATM, so there were no problems like this. So these were the questions about everyday life. And then very importantly, have any listed companies reported any damages, right? Has there been any destruction to civilian infrastructure important for the running economy? The news doesn't stop on the weekends. Context changes constantly.

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What separates good leaders from transformational, ones. I'm Jessica Chen and in season two of Leading By Example, we'll sit down with executives like Grace Chen of Bertie Gray to find out. It's important to understand where you spike, but also really acknowledge where you don't and find people who can fill those gaps. Listen to leading by example executives making an impact on the IHeart radio app, Apple Podcast, or wherever you get your podcast. It's pretty crazy how hard it is apparently to get data. I'm actually, actually at the Tehran Stock Exchange Wikipedia page. And whoever maintains that page hasn't updated the number of listed companies since 2009.

And there's a stock market chart here that goes to 2014. Setting aside the last couple of weeks, how have Iranian stocks been doing in the last year or a couple of years? Yeah. So Iranian stocks, you have to observe it in U.S. dollars or not any hard currency, right? Because in local currency, obviously, it doesn't tell you anything. If you looked at the stock market in Zimbabwe, when Zimbabwe was going bust, the stock market was performing amazingly in nominal terms, in local currency terms, but obviously in dollars it was going to zero.

And it's interesting because, okay, there is information, very up-to-date, detailed information on Iranian stocks available in Iran. But the majority of this information is not accessible if you're trying to access it from a computer with your IP address outside of Iran. So a lot of this information is restricted to Iran IP only. But you cannot find anywhere on the whole internet, right? There is no website that shows the stock market index in dollars. So when we send it out to our investors or just people who want to read news about the stock market in Iran,

we are the only source of this information. This is quite amazing. I mean, it's a country of 90 million people. And, you know, stock market with 700 companies and there is no single place in Internet that will show you the only important index, right? Yeah, that's really stunning. Okay, so when I think of the Iranian stock market, I think of two things. I think oil and then I think geopolitical risk.

How does the market typically handle or what do those exposures actually look like and do when there's a big event such as what we saw in the past week? So in terms of oil, oil is not really publicly traded. There is one Iranian monopoly called National Iranian Oil Corporation or Company that is responsible for production. Yeah, I think this is all centralized in one company. And this is held by the government. So it's not publicly this. You have some exposure to oil through oil refineries that are listed.

But refineries don't trade. They're not sensitive to the price of oil. They are sensitive to the crack spread, right? which defines their margin on refining margin. So they are not really proxie to oil prices. The whole stock market actually is well diversified. So you have large sectors such as chemicals. Mainly these are like petrochemicals, I don't know,

companies that produce different products, different versions, use natural gas that is in large supply as a cheap commodity and produce fertilizers for products like this. So this is probably 20% of the stock market. Then you have steel companies. The largest steel company in the Middle East is in Iran. You have carmakers that produce around 1 million cars, more than 1 million cars a year. So with car manufacturers, you have all the related industries, suppliers, you know,

to the car manufacturing businesses. You have banks, financials as an important sector, plus some consumer exposure, some building materials, cement companies are one of the best performance over the last a few years, actually. Yeah, so it's a well-diversified stock market like Iranian economy. Wait, sorry, just to follow up on the question before, in-USD terms, generally, how has the Tehran stock market been performing, setting aside the fact that... Oh, sorry, I didn't answer the question. Yes. So over the last, I don't know, eight years, I think, so let's say, since the U.S. and Iran signed the nuclear deal back in 2016, so almost a decade ago,

it should be roughly double that level right now. So it doubled since then. But in the meantime, there's been quite a roller coaster. So Iran stocks in dollar terms are three times lower right now, around three times lower, compared to the level back in 2020. So if you compare to August 2020, when there was a peak of a local, let's say, bull market and a bubble, right now stocks are around three times lower than that. in dollar terms.

Got it. And that's the main reason for that. Over the last two years has been the sentiment. Because 2023 started to really well for the region. There was this historical breakthrough agreement between Saudi Arabia and Iraq. Both countries decided that they don't want conflict. It was basically like a peace treaty. They opened up embassies in both countries.

And that was huge because Saudi Arabia. the finance minister was talking about investment opportunities in Iran. Iranian exporters were hoping for new export markets to open up in the region from Egypt to Saudi Arabia to whatever all the countries around. So there was like a very positive moment. At the same time, Biden administration was negotiating with the former Iranian government. So everything looked really, really promising. instead, obviously what happened in October was Hamas, it was Gaza, and that changed everything, like sentiment collapsed, and no one really wanted to look at any risky assets in Iran. So you had a situation where profits were going up when you're looking at Iran's, Iranian list of

companies, profits continued to grow, but the stock market was going down. So obviously, valuations are just cheaper and cheaper and cheaper, but everyone was focused basically on the potential for the regional escalation, rightfully so, and not on, you know, taking risk in their portfolios. So just big picture, from your perspective, because thinking back to your first answer where you talked about, okay, here's in theory what some comps could be and it could look like Turkey or it has resources potentially on scale with Saudi Arabia. How much of the bet, so to speak, from your perspective, is what people would say like, the option value from something happening, either it's a major softening between Iran and the West, perhaps regime change, something that triggers the big

unlock. Like, how much in your mind is it about at some point, something will reset and that massive opportunity could actually be tapped? So you're asking about the potential of this opportunity? Yeah, like basically, like, is that in like basically, okay, it's going to move around, there's sentiment here and there, but that at some point down the future, that actual opportunity to be an economy and be a market on the scale of a Turkey. could one day actually be realized through some switch that gets flipped?

Look, this is probably, I mean, from my perspective, the biggest optionality in enlisted markets, in public markets that you can find. Yeah. Because one thing is GDP. And GDP, the way I look at GDP, currently, I mean, if you Google it, say it's around $400 billion, we think it's more like $250 billion. It depends on the exchange rate that you use to calculate it. So let's say Iran is $250 billion GDP.

And now, Iranian non-oil economy, non-commodity economy, if everything goes well, could be as big as Turkey. And Turkey is $1.1. trillion. And this is without any commodity. But do it need to be an event? Like something would need to happen, right? For the catalyst. Yeah, yeah. Absolutely.

Yeah. The catalyst is clear, right? okay, I'll get back to the potential for GDP in a moment, but the catalyst is absolutely clear. It must be the opening up of Iran as a country and opening up of the economy and sanctions lifted, the US sanctions lifted, right? So there must be an agreement between the US and Iran. And what needs to happen? Well, some sort of political change.

So political attitude must change on both sides. But to be honest, many analysts were expecting some big dramatic event that needs to happen in Iran for the country to properly open up. And when you look at Iran right now, and you compare to, let's say, even a few years ago, when you had negotiations with the US, what were the biggest problem was it was always about two things. Iran enriching uranium too much, basically, at the wrong level. And the second, Iranian regional policies, right? So financing proxies from Hezbollah to Hamas, you know, to. Assad in Syria and so on, right?

So these two things were always the problem that they couldn't negotiate over. When you look at it right now, well, to a large extent, both obstacles are gone. So potentially this opens up a path to an agreement, an agreement, like a proper agreement, so not the type of nuclear agreement that was signed under Obama administration, which was never strong enough. And I think both Americans and Iranians understand this. I mean, proper agreement that lists sanctions, U.S. sanctions too, and opens up the country to everyone, including, like, U.S. investors, if they want to tap into the opportunity.

And I think, I mean, it seems that this is the thinking in the U.S., that if we do it, we do it properly. And I think, I mean, not that I think. I mean, what we've been hearing from on the Iranian side, like a few weeks ago when they were still negotiating, it was the same thing that they were showing Iran the whole economy as a big opportunity, like a trillion dollar opportunity, right, or two trillion dollar opportunity. I mean, it's a massive opportunity for all the investors. So this is the trigger. This is the catalyst that will unlock this optionality, this potential of Iran growing GDP

from the current 250 billion to, in some perfect scenario, to $2.3 trillion, which would be a combination of Saudi and Turkey GDP. obviously if everything went well. Well, but the other thing that's been happening over the past week is we've had reports of an internal crackdown in Iran and people getting arrested and things like that. And when I think internal crackdown, I think hardening of capital controls, which Iran already has, what are you hearing on that side of things? Because presumably that would make your life your job even harder.

Look, capital controls have been in place for, Iranian entities for some time. When it comes to foreign investors, it's obviously difficult to access, but everyone who is there, and you have some really, really large, one of the largest Swiss companies, German companies, Japanese, French companies, still there, not increasing their scale of their operations, but just sustaining what they've had for the last 20 years there. And they are welcome. Same with investors. I mean, Iran desperately needs capital in the form of FDI, ideally, but portfolio investments as well, to channel funding through the stock market to local private companies. So this is barely needed.

And Iran is aware of that and understands this, offers government guarantees. We have the same guarantees as all the big European companies that are present there against extropriation of assets and so on and so forth. So it's not that you're not welcome as a foreign investor. the contrary, I would say. There are programs that are designed to make your life easier. You could even actually, if you invest, I don't remember, it was around 200,000 euro or dollar equivalent. You get a residency in Iran if you were interested in this for five years, I think. So there are many, many programs designed specifically for foreign investors to make the local market more attractive. In terms of capital controls for local residents have been always in place, so limits on

how much of foreign currency they are able to buy and for what purposes, right? So if you want to send your child to school in the U.S. or somewhere and you have to pay for education, this has like different quotas, right? If you want to travel, this is like different. But it's very, very formalized and bureaucratic. Are there tech companies that trade on the Tehran stock market? There are tech companies. The ones that are listed are related to enterprise software.

That's what I figured. Like the Oracle or SAP, German SAP, but you have privately held companies that would like to IPO, but they are just waiting for the approval from the regulator. And these are quite amazing companies. You have SNAP, which is like an Uber, but SNAP has more rights in Tehran than Uber in any city in the world. It's a really world-class company. You have DJ Kala, which is like Amazon basically, also a large company, one of the biggest success stories. and many, many, many, many smaller e-commerce companies that are in the private market.

We'll look out for them. Lots more is produced by Carmen Rodriguez and Dashel Bennett with help from Moses Ondom and Kail Brooks. Our sound engineer is Blake Maples. Sage Baumann is the head of Bloomberg Podcasts. Please rate, review, and subscribe to Odd Lots and Lots More on your favorite podcast platforms. And remember that Bloomberg subscribers can listen to all of our podcasts, add-free by connecting through Apple Podcasts. I'm Francine Lacquois, an award-winning journalist, and I've got a new podcast, Leaders with Francine Laquois from Bloomberg Podcasts. I've interviewed everyone from heads of state to fashion icons about the news of the moment. But I've always been curious who are these people as leaders. I don't think there's one right way to be a leader. Make decisions. A poor decision is always better than no decision. Listen to new episodes every other Monday. Follow leaders with Francine Lacqua wherever you get your

podcasts. What separates good leaders from transformational ones? I'm Jessica Chen, and in season two of Leading By Example, we'll sit down with executives like Grace Chen of Bertie Gray to find out. It's important to understand where you spike, but also really acknowledge where you don't and find people who can fill those gaps. Listen to Leading by Example, executives making an impact on the IHeart Radio app, Apple podcast or wherever you get your podcasts.