WEBVTT - Lots More on What's Going On in Iran's Markets 0:00:02.480 --> 0:00:11.879 Bloomberg Audio Studios, podcasts, radio news. Yes, anyway, it's a 0:00:11.920 --> 0:00:14.200 typical Polish name, and it's a it's a difficult one, 0:00:14.200 --> 0:00:15.720 and there was no English equivalent. 0:00:16.040 --> 0:00:19.800 My mother speaks like nine languages, so and she was 0:00:19.840 --> 0:00:22.439 a linguist, and she said she found Polish to be 0:00:22.520 --> 0:00:25.159 the hardest. And she even like speaks like some like 0:00:25.680 --> 0:00:28.240 she's learned like some Russian and some Malay, and all. 0:00:28.120 --> 0:00:29.800 This questions supposed to be the hardest, she. 0:00:29.800 --> 0:00:33.199 Said, from a pronunciation standpoint, she found Polish to be 0:00:33.240 --> 0:00:39.520 the hardest. Anyway, I did a dead list. 0:00:39.600 --> 0:00:40.360 I'm both the. 0:00:40.400 --> 0:00:44.040 Most popular trader and most successful trader at Citadel. 0:00:44.240 --> 0:00:48.640 That is going viral barches. This isn't after school special, except. 0:00:48.240 --> 0:00:50.800 I've decided I'm going to base my entire personality going 0:00:50.800 --> 0:00:53.760 forward on campaigning for a strategic pork reserve. 0:00:53.520 --> 0:00:54.040 In the US. 0:00:54.280 --> 0:00:54.800 Black goal. 0:00:55.120 --> 0:00:56.560 These are the important question. 0:00:56.680 --> 0:00:58.040 Is that robots taking over the world? 0:00:58.160 --> 0:01:01.280 No, I see the like a couple of years, the 0:01:01.360 --> 0:01:03.560 AI will do a really good job of making the 0:01:03.600 --> 0:01:06.640 odd lotch podcast. One day that person will have the 0:01:06.680 --> 0:01:07.560 mandate of Heaven. 0:01:07.760 --> 0:01:09.919 How do I get more popular and successful? 0:01:10.280 --> 0:01:11.480 We do have the. 0:01:13.520 --> 0:01:15.680 Welcome to lots more where we catch up with friends 0:01:15.720 --> 0:01:16.760 about what's going. 0:01:16.520 --> 0:01:19.480 On right now, because even when odd Lots is over, 0:01:19.840 --> 0:01:21.520 there's always lots more. 0:01:21.920 --> 0:01:24.280 And we really do have the perfect guest. 0:01:27.000 --> 0:01:30.440 One thing we have learned in all our episodes looking 0:01:30.440 --> 0:01:33.680 at the Iranian stock market, and there have been a couple, yes, 0:01:33.800 --> 0:01:36.200 but one thing we've learned is that Iran is actually 0:01:36.520 --> 0:01:41.160 the thirty seventh biggest economy in the world by nominal GDP. 0:01:41.720 --> 0:01:45.839 Can you guess like another economy that is roughly that size? 0:01:46.040 --> 0:01:49.480 Oh that's a really So what is roughly similar to 0:01:49.520 --> 0:01:52.760 the Iranian I don't know, go on. 0:01:52.880 --> 0:01:55.800 Okay, well one of them is Denmark, so you know 0:01:56.040 --> 0:01:58.080 that's pretty big. But then when you start looking at 0:01:58.080 --> 0:02:02.200 things like geographical size, Iran is I think the seventeenth 0:02:02.240 --> 0:02:05.560 biggest country in the world by geographical size. It has 0:02:05.680 --> 0:02:08.080 a lot of people as well, so you know, similar 0:02:08.120 --> 0:02:10.120 to Turkey in terms of post I know you. 0:02:10.080 --> 0:02:13.720 Know, I know the population now, Oh well yeah, because 0:02:13.800 --> 0:02:16.040 Ted Cruz got stumped on it when he went on 0:02:16.120 --> 0:02:18.639 Tucker Carlson Show. So we all know that Iran has 0:02:18.639 --> 0:02:22.560 a population of around ninety million. No one, no one, yeah, 0:02:22.600 --> 0:02:23.920 he should have. No one is ever going to make 0:02:23.919 --> 0:02:24.880 that mistake again. 0:02:25.400 --> 0:02:27.560 That's right. That should have been my first question. 0:02:27.639 --> 0:02:31.280 Can I say something when there's geopolitical events happening in 0:02:31.320 --> 0:02:33.680 the world on a weekend when nothing is treating so 0:02:33.800 --> 0:02:35.600 one that you can look at what crypto is doing. 0:02:35.880 --> 0:02:37.520 But every once in a while, when I'm in true 0:02:37.520 --> 0:02:40.440 market siico mood, like I'll actually check, like, oh, what 0:02:40.600 --> 0:02:43.440 is the Saudi market doing on a Saturday, or what 0:02:43.639 --> 0:02:46.120 is the tel Aviv market doing on a Sunday? 0:02:46.440 --> 0:02:49.120 There are siico mode that's just being international. 0:02:49.280 --> 0:02:52.240 Well, we're supposed to have the weekends to not be 0:02:52.280 --> 0:02:54.720 looking up, but most of the time they're not. Every 0:02:54.919 --> 0:02:56.840 point is everyone's in a while, like I'm gonna check 0:02:56.919 --> 0:02:59.160 in and see how tel Aviv is trading on a 0:02:59.240 --> 0:03:01.920 Sunday or something like that. That's how that's how you 0:03:02.000 --> 0:03:03.000 know something is happening. 0:03:03.080 --> 0:03:05.880 Yeah, But the one market that you can't really look up, 0:03:05.919 --> 0:03:09.440 that's right is Iran stock market and the Tran Stock 0:03:09.480 --> 0:03:12.639 Exchange specifically, which again, as we know from previous episodes, 0:03:12.680 --> 0:03:15.800 has more than six hundred companies and is worth I 0:03:15.800 --> 0:03:18.079 think it was almost one hundred billion dollars. I don't 0:03:18.080 --> 0:03:21.519 know if it's still that much, but I'm always brilliant. 0:03:21.600 --> 0:03:23.760 Around one hundred and fifty billion dollars one. 0:03:23.680 --> 0:03:27.920 Hundred and fifty Oh wow. Okay, we're speaking with Matya Voutal. 0:03:28.120 --> 0:03:31.240 He is CEO and CIO of Antlon Capital, which is 0:03:31.280 --> 0:03:35.520 an Amsterdam based fund manager which specializes in Iranian stocks. 0:03:35.760 --> 0:03:38.080 He's been on the show a couple of times before, 0:03:38.200 --> 0:03:39.880 and we thought we would talk to him again just 0:03:39.920 --> 0:03:42.200 to try to get a sense of what's going on 0:03:42.400 --> 0:03:45.400 in terms of Iran's economy and it's stock market. 0:03:45.560 --> 0:03:47.840 What is going on if I can just comment on 0:03:47.840 --> 0:03:50.160 one thing, because the way you introduced your own is 0:03:50.200 --> 0:03:53.200 the perfect way to show the country. It's the size 0:03:53.200 --> 0:03:57.240 of Turkey in terms of population and actually geographical size 0:03:57.240 --> 0:03:57.720 as well. 0:03:58.240 --> 0:03:58.760 But if you. 0:03:58.760 --> 0:04:03.800 Compare the economy of an Iran, it's around five times smaller. 0:04:03.800 --> 0:04:05.840 So Iran is around five times smaller. 0:04:06.120 --> 0:04:09.000 And if you look at the composition of the economy, 0:04:09.200 --> 0:04:12.440 Turkey has no natural resources, so they have to import 0:04:12.440 --> 0:04:15.800 the whole energy commodities they consume and so on. Iran 0:04:16.240 --> 0:04:20.800 has the similar size of potential non commodity GDP that 0:04:20.880 --> 0:04:22.840 it could grow to. So from the current let's say 0:04:22.880 --> 0:04:26.120 two hundred and fifty billion to one point one trillion 0:04:26.160 --> 0:04:29.400 GDP that Turkey has, but also on top of this 0:04:29.880 --> 0:04:33.560 has resources that are actually if you combine gas and oil, 0:04:33.880 --> 0:04:36.839 they are bigger than Saudi Arabia's and Saudi Arabia is 0:04:36.839 --> 0:04:40.560 another one point, I think three trillion dollar economy. So 0:04:40.640 --> 0:04:43.320 this is a good way to just frame Iran as 0:04:43.360 --> 0:04:45.920 to show Iran, as you know, it's a big country 0:04:46.200 --> 0:04:51.200 that should really be having much bigger economy. Because of sanctions, 0:04:51.360 --> 0:04:53.920 various reasons and so on, it's been underdeveloped. 0:04:53.920 --> 0:04:57.479 But the scale of this underdevelopment is like ten x wow. 0:04:57.600 --> 0:05:00.640 And because of the sanctions, we can't actually go and 0:05:00.839 --> 0:05:04.080 look up what's happening in Tehran's stock market, So why 0:05:04.120 --> 0:05:06.440 don't you give us an overview of what it's been 0:05:06.560 --> 0:05:09.320 like for the past week given geopolitical events. 0:05:10.000 --> 0:05:12.400 So for the past week, it was difficult for everyone 0:05:12.720 --> 0:05:15.360 to check what was going on in Iran because internet 0:05:15.560 --> 0:05:18.760 was shut down basically, so I could communicate with my 0:05:18.839 --> 0:05:21.480 team on the ground in Tehran once a day when 0:05:21.520 --> 0:05:24.440 they had signal, and sometimes it was what's up that 0:05:24.560 --> 0:05:27.360 was working, sometimes telegram, but it was maybe once or 0:05:27.400 --> 0:05:30.360 twice per day. So what was going on in the 0:05:30.440 --> 0:05:33.719 market was simply nothing. So the stock market hasn't opened. 0:05:35.080 --> 0:05:38.440 The shange of fire between Iran and Israel happened on 0:05:38.600 --> 0:05:42.280 a Friday, which is weekend in Iran, and then on 0:05:42.320 --> 0:05:46.279 the following Saturday there was an important religious holiday, so 0:05:46.560 --> 0:05:49.080 the market and actually the whole economy was supposed to 0:05:49.320 --> 0:05:53.320 be closed anyway, the economic activity the market was supposed 0:05:53.360 --> 0:05:56.200 to resume on a Sunday, but they didn't open, so 0:05:57.360 --> 0:05:59.880 the market, the stock market, pretty much most of the 0:06:00.040 --> 0:06:03.280 currency market has been closed for the last two weeks. 0:06:03.960 --> 0:06:05.840 Assuming out for a second. Actually, there are two early 0:06:06.400 --> 0:06:10.240 things that strike me. One, this is true frontier market 0:06:10.360 --> 0:06:13.680 investing when you're in a position in which you literally 0:06:13.720 --> 0:06:17.200 cannot easily communicate with your team on the ground because 0:06:17.200 --> 0:06:20.400 there are a lack of internet or lack of communications. 0:06:20.760 --> 0:06:24.240 But it strikes me that in some sense this is 0:06:24.279 --> 0:06:28.320 what the fund manager gets paid for, because for many reasons, 0:06:28.360 --> 0:06:30.120 including the fact that it's not trivial to look up 0:06:30.200 --> 0:06:32.400 data or even access to these markets, a lot of 0:06:32.440 --> 0:06:35.640 investors are never going to be participating in this market. 0:06:35.760 --> 0:06:38.560 And then you layer in on all these additional complications 0:06:38.760 --> 0:06:42.359 like this is essentially, at least in theory, the deep 0:06:42.520 --> 0:06:45.599 risks that in theory you get compensated. 0:06:45.000 --> 0:06:49.440 For Yeah, you get compensated for actually giving access to 0:06:49.440 --> 0:06:52.320 the market because it's very difficult or impossible to get 0:06:52.360 --> 0:06:55.000 access at this moment as a non resident team run 0:06:55.120 --> 0:06:57.799 to the local stock market. But also you get paid 0:06:57.800 --> 0:07:00.719 for solving all the operational programs. You know, we have 0:07:00.880 --> 0:07:03.880 quite a long track record in Iran and the main 0:07:03.960 --> 0:07:06.880 thing actually that we are really proud of because investing 0:07:06.920 --> 0:07:09.680 when everything is priced for war is fairly easy, right, 0:07:09.680 --> 0:07:11.760 And also you have a market that is very inefficient 0:07:11.760 --> 0:07:14.600 because it's driven by retail investors, Like ninety percent of 0:07:14.680 --> 0:07:18.000 daily flows are coming from retail. So there is a 0:07:18.000 --> 0:07:20.880 lot of alpha, a lot of inefficiencies that you can harvest. 0:07:21.120 --> 0:07:25.480 But the real issue is our operations. One thing is 0:07:25.560 --> 0:07:28.280 due diligence. I mean, you know a lot of sanctioned 0:07:28.520 --> 0:07:31.760 restrictions which are not on the whole country, but we're 0:07:32.040 --> 0:07:35.520 related to many different entities, sectors. 0:07:35.000 --> 0:07:35.400 And so on. 0:07:35.480 --> 0:07:38.480 So you have to do due diligence on every single 0:07:39.000 --> 0:07:42.840 decision you're taking, before every decision you're taking. But also 0:07:42.920 --> 0:07:45.600 you need to solve the problems. For example, the problem 0:07:45.640 --> 0:07:49.840 of changing currency making transfers. Iranian banks are not connected 0:07:49.880 --> 0:07:53.720 to the Swift system there are specialized banks that actually 0:07:54.240 --> 0:07:58.920 do for example, payment for humanitarian trade with Venezuela right 0:07:59.040 --> 0:08:01.560 or Iran, so food medical devices. 0:08:01.560 --> 0:08:03.600 This is never under sanctions and you need to be 0:08:03.640 --> 0:08:04.560 able to pay for it. 0:08:04.840 --> 0:08:08.440 But those transfers take like nine months to execute, right. 0:08:09.280 --> 0:08:12.440 I remember we once had to process a payment for 0:08:12.520 --> 0:08:15.360 it like a very very official way. We had to 0:08:15.440 --> 0:08:20.400 have the signature of the actual minister in Iran approving 0:08:20.400 --> 0:08:21.840 the payment, right, So it took. 0:08:21.720 --> 0:08:24.080 Nine months al together. But there are other ways. 0:08:24.120 --> 0:08:27.920 There are other corridors, payment corridors that across emerging markets 0:08:27.960 --> 0:08:30.680 and including Iran, that make it much more efficient. So 0:08:30.760 --> 0:08:33.240 for example, right now, when you have the stock market, 0:08:33.280 --> 0:08:36.000 the currency market were shut down, but you could track 0:08:36.360 --> 0:08:38.960 the exchange rate, what's going on with the exchange rate 0:08:39.200 --> 0:08:43.360 of the Iranian real versus dollar, either on telegram chats 0:08:43.440 --> 0:08:48.120 but also oncurrency exchanges, so you have you know, liquid 0:08:48.320 --> 0:08:52.160 market on stable coins versus Iranian real inside of Iran, 0:08:52.640 --> 0:08:57.120 where well liquidity was limited during the last period anyway, 0:08:57.320 --> 0:08:59.280 but we could see the changes, so we knew that 0:08:59.480 --> 0:09:03.240 one dollar before the war was at around eight hundred 0:09:03.440 --> 0:09:07.520 thirty thousand reals per one dollar. Then it went up 0:09:07.960 --> 0:09:11.440 roughly fifteen percent to nine hundred fifty thousand, and now 0:09:11.920 --> 0:09:15.439 after the ceasefire it's back down at eight hundred fifty thousand. 0:09:15.720 --> 0:09:18.960 So you can track the market, you can actually make 0:09:19.040 --> 0:09:21.880 transactions depending on on the liquidity. 0:09:21.880 --> 0:09:22.760 But it is possible. 0:09:23.000 --> 0:09:24.720 And to be honest, I mean when I saw those 0:09:24.800 --> 0:09:29.400 exchange rates moves fifteen percent, when you have a war 0:09:29.480 --> 0:09:32.560 where a lot of commentators were saying that this could 0:09:32.640 --> 0:09:36.600 turn into a massive worldwide conflict, that fifteen percent in 0:09:36.640 --> 0:09:38.800 a country like you run, I would say that this is. 0:09:38.920 --> 0:09:41.199 Your usual volatility on the currency market. 0:09:42.200 --> 0:09:44.560 Wait, so when you're talking to your team on the ground, 0:09:44.600 --> 0:09:46.480 when you can get hold of them, what are the 0:09:46.559 --> 0:09:49.560 questions you're asking them exactly? Because the markets are closed, 0:09:49.600 --> 0:09:53.360 so presumably you're not marking your portfolio to market on 0:09:53.400 --> 0:09:56.720 a daily basis, But what information are you trying to get? 0:09:57.040 --> 0:09:59.280 Well, the first few days, the only information I was 0:09:59.320 --> 0:10:02.040 interested in was if they were safe, to be honest, 0:10:02.360 --> 0:10:06.320 because you know, the the what residents of Tehran and 0:10:06.320 --> 0:10:10.880 some other cities experience was they've never experienced just explosions 0:10:10.920 --> 0:10:11.560 in the city. 0:10:11.800 --> 0:10:14.520 It's like the older Iranians compared it to the eighties 0:10:14.559 --> 0:10:17.480 when Iran was fighting Saddam Hussein in Iraq. And this 0:10:17.559 --> 0:10:18.439 is when you know. 0:10:18.440 --> 0:10:22.160 The last last time, when when someone was firing missiles 0:10:22.200 --> 0:10:23.280 at Iranian cities. 0:10:23.679 --> 0:10:25.839 So after a. 0:10:25.800 --> 0:10:29.960 Few explosions that were too close to home, they basically evacuated. 0:10:30.040 --> 0:10:32.520 They moved to smaller cities. And this was a big 0:10:32.559 --> 0:10:35.760 trend in Iran. So in Tehran, a lot of residents 0:10:35.760 --> 0:10:39.240 were just relocating out of Tehran. Tehran is a big city, 0:10:39.240 --> 0:10:42.040 it's like twelve million people and they were moving mainly 0:10:42.160 --> 0:10:44.600 north to some smaller cities by the cast and sea. 0:10:45.080 --> 0:10:46.960 So you had massive congestion. 0:10:47.320 --> 0:10:50.400 People were spending hours in traffic jams trying to get 0:10:50.400 --> 0:10:53.599 out of the Tehran. There was not enough petrol on 0:10:54.000 --> 0:10:57.320 gas stations just because of this peak in demand. You 0:10:57.360 --> 0:11:00.440 had some petrol rationing and then I was as them, okay, 0:11:00.520 --> 0:11:01.840 so is the economy working? 0:11:01.920 --> 0:11:06.680 Not working? So everything that was non essential basically was closed. 0:11:06.720 --> 0:11:09.360 So you couldn't I don't know built by building materials 0:11:09.480 --> 0:11:14.840 or if you make this, but groceries, pharmaceuticals, gas stations, banks, 0:11:14.840 --> 0:11:18.439 This was all open and working properly with some disruptions. 0:11:18.440 --> 0:11:20.960 But those disruptions, for example, if you wanted to buy 0:11:20.960 --> 0:11:26.480 groceries in north of Iran where everyone has just relocated. 0:11:26.880 --> 0:11:30.520 You had some bottlenecks, logistical bottlenecks, so distribution was not 0:11:30.600 --> 0:11:33.839 fast enough. So you had some shortages just for a 0:11:33.880 --> 0:11:38.880 little while with banks when some branches were not operating 0:11:38.960 --> 0:11:42.360 a one hundred percent capacity. But two banks got hacked, so 0:11:42.400 --> 0:11:45.679 you had some cyber attacks on two banks that you ran, 0:11:45.960 --> 0:11:49.160 and one cryptocurrency exchange. The rest of the banking sector 0:11:49.320 --> 0:11:50.880 was working without any disruptions. 0:11:50.920 --> 0:11:52.000 You could get cash. 0:11:51.960 --> 0:11:54.840 From many atm so there was there were no problems 0:11:54.880 --> 0:11:57.520 like this. So these are the questions about everyday life. 0:11:57.800 --> 0:12:03.120 And then, very importantly, had any listed companies reported any damages? 0:12:03.280 --> 0:12:08.400 Right that? Has there been any destruction to civilian infrastructure 0:12:08.720 --> 0:12:16.200 important for the riding economy. 0:12:23.880 --> 0:12:26.640 It's pretty crazy how hard it is apparently to get data. 0:12:26.679 --> 0:12:30.120 I'm actually at the tront stock Exchange Wikipedia page, and 0:12:30.320 --> 0:12:33.560 whoever maintains that page hasn't updated the number of listed 0:12:33.600 --> 0:12:35.760 companies as two thousand and nine, and there's a stock 0:12:35.800 --> 0:12:39.400 market chart here that goes to twenty fourteen, setting aside 0:12:39.600 --> 0:12:43.520 the last couple of weeks. How have Iranian stocks been 0:12:43.600 --> 0:12:46.000 doing the last year or a couple of years. 0:12:46.920 --> 0:12:48.760 Yeah, So Iranian stocks. 0:12:48.760 --> 0:12:51.000 You have to observe it in US dollars or in 0:12:51.200 --> 0:12:55.200 any hard currency, right because in local currency obviously doesn't 0:12:55.240 --> 0:12:57.760 tell you anything. If you looked at the stock market 0:12:57.800 --> 0:13:01.240 in Zimbabwe when Zimbabwe was going bus the stock market 0:13:01.280 --> 0:13:05.120 was performing amazingly in nominal terms in local currency terms, 0:13:05.280 --> 0:13:07.800 but obviously in dollars it was going to zero. And 0:13:07.840 --> 0:13:11.800 it's interesting because, Okay, there is information, very up to date, 0:13:12.720 --> 0:13:17.880 detailed information on Iranian stocks available in Iran, but the 0:13:17.920 --> 0:13:21.120 majority of this information is not accessible if you're trying 0:13:21.160 --> 0:13:24.240 to access it from a computer with your IP address 0:13:24.280 --> 0:13:26.600 outside of your so a lot of this information is 0:13:26.640 --> 0:13:31.200 restricted to Iran IP only, but you cannot find anywhere 0:13:31.480 --> 0:13:33.040 on the whole Internet. 0:13:33.120 --> 0:13:35.160 Right, there is no website that. 0:13:35.240 --> 0:13:39.240 Shows the stock market index in dollars. So when we 0:13:39.320 --> 0:13:42.120 send it out to our investors. 0:13:41.559 --> 0:13:43.720 Or just people who. 0:13:43.000 --> 0:13:45.200 Want to read news about the stock market in Iran, 0:13:45.360 --> 0:13:47.040 we are the only source of this information. 0:13:47.080 --> 0:13:47.840 This is quite amazing. 0:13:47.880 --> 0:13:49.880 I mean, it's a country of nineteen million people and 0:13:50.120 --> 0:13:52.440 you know stock market with seven hundred companies, and there 0:13:52.480 --> 0:13:55.440 is no single place in Internet that would show you 0:13:55.480 --> 0:13:57.800 the only important index. 0:13:57.520 --> 0:14:01.240 Right, Yeah, that's really stunning. Okay, So when I think 0:14:01.240 --> 0:14:03.840 of the Iranian stock market, I think of two things. 0:14:03.880 --> 0:14:07.760 I think oil and then I think geopolitical risk. How 0:14:07.800 --> 0:14:12.000 does the market typically handle or what do those exposures 0:14:12.040 --> 0:14:15.680 actually look like and do when there's a big event 0:14:15.840 --> 0:14:17.520 such as what we saw in the past week. 0:14:18.800 --> 0:14:23.200 So in terms of oil, oil is not really publicly traded. 0:14:23.440 --> 0:14:29.280 There is one Iranian monopoly called National Iranian Oil Corporation 0:14:29.440 --> 0:14:32.080 or company that is responsible for production. 0:14:32.680 --> 0:14:35.200 Yeah, I think this is all centralized in one company, 0:14:35.240 --> 0:14:37.080 and this is held by the government, so it's not 0:14:37.160 --> 0:14:37.920 publicly listed. 0:14:38.360 --> 0:14:42.840 You have some exposure to oil through oil refineries that 0:14:42.920 --> 0:14:46.400 are listed, but refineries don't trade. They're not sensitive to 0:14:46.720 --> 0:14:49.400 the price of oil. They are sensitive to the to 0:14:49.440 --> 0:14:52.960 the crack spread, right, which which defines their margin on 0:14:53.200 --> 0:14:56.360 the refining margin, so they are not really per proxy 0:14:56.400 --> 0:14:59.960 to oil prices. The whole stock market actually is will diversify, 0:15:00.200 --> 0:15:04.479 so you have you know, large sectors such as chemicals. 0:15:04.520 --> 0:15:07.560 Mainly these are like petrochemicals, I don't know companies that 0:15:08.200 --> 0:15:11.960 produce different products different versions. Use natural gas that is 0:15:12.360 --> 0:15:16.480 in large supply as a cheap commodity and produce fertilizers 0:15:16.520 --> 0:15:18.560 or products like this right, so this is probably twenty 0:15:18.600 --> 0:15:21.320 percent of the stock market. Then you have steel companies. 0:15:21.400 --> 0:15:24.440 The largest steel company in the Middle East is in Iran. 0:15:24.720 --> 0:15:28.000 You have car makers that produce around one million cars, 0:15:28.480 --> 0:15:31.920 more than one million cars a year. So with car 0:15:32.000 --> 0:15:36.520 manufacturers you have all the related industries suppliers you know, 0:15:36.560 --> 0:15:40.680 to the car manufacturing businesses. You have banks, financials as 0:15:40.680 --> 0:15:45.280 an important sector, plus some consumer exposures, some building materials, 0:15:45.360 --> 0:15:48.120 some man companies are one of the best performance performance 0:15:48.160 --> 0:15:50.920 over the last few years. Actually, yeah, so it's a 0:15:50.920 --> 0:15:53.880 well diversified stock market like you ran an economy. 0:15:54.200 --> 0:15:57.120 Well, sorry, just to follow up on the question before. 0:15:57.880 --> 0:16:02.960 In usd terms, generally, how has the Tehran stock market 0:16:03.120 --> 0:16:05.160 been performing? Setting aside the fact. 0:16:04.920 --> 0:16:08.240 That sorry I didn't ask the question. Yes, so over 0:16:08.280 --> 0:16:10.800 the last I don't know, eight years, I think. So, 0:16:11.120 --> 0:16:14.320 let's say since the US and you ran signed the 0:16:14.400 --> 0:16:18.120 nuclear deal back in twenty sixteen, so almost a decade ago, 0:16:18.600 --> 0:16:22.720 it should be roughly double that level. 0:16:22.640 --> 0:16:25.360 Right now, So we doubled since then. 0:16:25.560 --> 0:16:27.640 But in the meantime there's been quite a lot of 0:16:27.720 --> 0:16:31.320 roller coster So right in stocks in dollar terms are 0:16:31.880 --> 0:16:35.560 three times lower right now, around three times lower compared 0:16:35.560 --> 0:16:38.440 to the level back in twenty twenty. So if you 0:16:38.480 --> 0:16:41.680 compare to August twenty twenty when there was a peak 0:16:41.720 --> 0:16:44.800 of a local let's say, bull market and a bubble, 0:16:45.240 --> 0:16:48.120 right now stocks are around three times lower than that 0:16:48.240 --> 0:16:50.960 in dollar terms, and that's the main reason for that. 0:16:51.280 --> 0:16:56.000 Over the last two years has been the sentiment. 0:16:56.440 --> 0:17:01.520 Because twenty twenty three started to really well for the region. 0:17:01.600 --> 0:17:06.920 There was this historical breakthrough agreement between Saudi Arabia and Iraq. 0:17:07.440 --> 0:17:11.159 Both countries decided that they don't want conflict. They it 0:17:11.200 --> 0:17:15.000 was basically like a peace treaty. They opened up embassies 0:17:15.040 --> 0:17:18.600 in both countries and that was huge because Saudi finance 0:17:18.640 --> 0:17:21.520 minister was talking about investment opportunities in Iran. 0:17:21.840 --> 0:17:23.320 Iran and exporters were. 0:17:23.200 --> 0:17:26.879 Hoping for new export markets to open up in the 0:17:26.920 --> 0:17:30.679 region from Egypt to Saudi Arabia to whatever, all the 0:17:30.680 --> 0:17:31.399 countries around. 0:17:31.840 --> 0:17:34.520 So there was like a very positive moment. 0:17:35.080 --> 0:17:38.359 At the same time, by the administration was negotiating with 0:17:39.040 --> 0:17:43.240 the former Iranian government, so everything looked really really promising. 0:17:43.880 --> 0:17:45.680 Instead, obviously what happened in. 0:17:45.720 --> 0:17:49.720 October was Hamas was Gaza, and that changed everything, like 0:17:49.880 --> 0:17:53.720 sentiment collapse and no one really wanted to look at 0:17:53.720 --> 0:17:56.440 any risky assets in Iran. So you had a situation 0:17:56.520 --> 0:17:59.920 where profits were going up. When you're looking at Iranians 0:18:00.640 --> 0:18:05.600 enlisted companies, profits continue to grow, but the stock market 0:18:05.640 --> 0:18:08.440 was going down. So obviously evaluations are just cheaper and 0:18:08.520 --> 0:18:12.359 cheaper and cheaper. But everyone was focused basically on the 0:18:12.359 --> 0:18:15.480 potential for the regional escalation rightfully so, and. 0:18:15.800 --> 0:18:18.240 Not on you know, taking risk in their portfolios. 0:18:18.400 --> 0:18:21.879 So just a big picture from your perspective, because thinking 0:18:21.920 --> 0:18:24.119 back to your first answer where you talked about, Okay, 0:18:24.160 --> 0:18:26.560 here's in theory what some comps could be and it 0:18:26.560 --> 0:18:30.720 could look like Turkey, or it has resources potentially unscale 0:18:30.760 --> 0:18:34.240 with Saudi Arabia. How much of the bet so to 0:18:34.280 --> 0:18:36.639 speak from your perspective is what people would say, like 0:18:36.920 --> 0:18:42.560 the option value from something happening, either it's a major 0:18:42.640 --> 0:18:47.760 softening between Iran and the West, perhaps regime change, something 0:18:47.800 --> 0:18:51.120 that triggers the big unlock, Like how much in your 0:18:51.200 --> 0:18:54.400 mind is it about it? At some point something will reset 0:18:54.480 --> 0:18:57.879 and some end that massive opportunity could actually be tapped. 0:18:58.720 --> 0:19:01.199 So you're asking about the potential of this opportunity. 0:19:01.280 --> 0:19:04.280 Yeah, Like basically like they didn't like basically Okay, it's 0:19:04.280 --> 0:19:06.520 going to move around. There's sentiment here and there, but 0:19:06.520 --> 0:19:09.560 that at some point down the future that actual opportunity 0:19:09.640 --> 0:19:11.639 to be an economy and be a market on the 0:19:11.680 --> 0:19:15.440 scale of a Turkey could one day actually realize through 0:19:15.480 --> 0:19:17.600 some some switch that gets flipped. 0:19:17.800 --> 0:19:20.720 Look, this is probably, I mean, from my perspective, the 0:19:20.720 --> 0:19:24.679 biggest optionality in enlisted markets, in public markets that you 0:19:24.680 --> 0:19:25.120 can find. 0:19:25.240 --> 0:19:28.160 Yeah, because one thing is GDP and GDP the. 0:19:28.080 --> 0:19:30.679 Way I look at GDP currently, I mean if you 0:19:30.720 --> 0:19:33.320 google it, it say it's around four hundred billion dollars, 0:19:33.600 --> 0:19:36.240 we think it's more like two hundred and fifty billion dollars. 0:19:36.359 --> 0:19:38.480 It depends on the exchange rate that you used to 0:19:39.200 --> 0:19:41.480 calculate it. So let's say Iran is two hundred and 0:19:41.520 --> 0:19:46.119 fifty billion dollars GDP, and now Iranian non oil economy, 0:19:46.480 --> 0:19:50.600 non commodity economy, if everything goes well, could be as 0:19:50.640 --> 0:19:53.920 big as Turkey, and Turkey is one point one trillion, 0:19:54.080 --> 0:19:56.360 and this is without any commodity. 0:19:56.359 --> 0:19:58.000 But do it need to be do it need to 0:19:58.000 --> 0:20:00.480 be an event like something would need happen? 0:20:01.000 --> 0:20:01.200 Right? 0:20:01.320 --> 0:20:07.119 Is right? Catalyst? Yeah? Absolutely, yeah, the catalyst is clear. Right, Okay, 0:20:07.600 --> 0:20:10.160 I'll get back to the potential for GDP in a moment. 0:20:10.160 --> 0:20:12.040 But the catalyst is absolutely clear. 0:20:12.040 --> 0:20:14.359 It must be the opening up of Iran as a 0:20:14.400 --> 0:20:17.199 country and opening up of the economy and sanctions lifted, 0:20:17.359 --> 0:20:20.200 the US sanctions lifted, right, so there must be an 0:20:20.240 --> 0:20:22.600 agreement between the US and Iran. 0:20:22.920 --> 0:20:25.640 And what needs to happen well some sort. 0:20:25.480 --> 0:20:29.679 Of political change, so political attitude must change on both sides. 0:20:29.840 --> 0:20:34.760 But to be honest, many analysts were expecting some big 0:20:34.840 --> 0:20:38.080 dramatic event that needs to happen in Iran for the 0:20:38.119 --> 0:20:41.639 country to properly open up. And when you look at 0:20:41.680 --> 0:20:45.480 Iran right now and you compare to let's say even 0:20:45.520 --> 0:20:48.800 a few years ago, when you had negotiations with the US, 0:20:49.200 --> 0:20:51.119 what were the biggest problem was? 0:20:51.240 --> 0:20:55.680 It was always about two things. Iran and reaching uranium 0:20:55.760 --> 0:20:57.600 too much basically at the wrong level. 0:20:57.920 --> 0:21:03.600 And the second Iranian region policies right, so financing proxies 0:21:03.840 --> 0:21:07.919 from Hesbolau to Hamas you know those assad in Syria 0:21:07.960 --> 0:21:10.960 and so on, right, So these two things were always 0:21:10.960 --> 0:21:13.560 the problem that they couldn't negotiate over. When you look 0:21:13.560 --> 0:21:18.159 at it right now, well, to an art extent, both 0:21:18.200 --> 0:21:22.880 obstacles are gone. So potentially this opens up a path 0:21:22.920 --> 0:21:26.040 to an agreement, an agreement like a proper agreement, so 0:21:26.119 --> 0:21:29.000