Reuters Insider - Foreign investors 'queuing' for Iran

Baader Bank AG

14/07/2015 21:03

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 Source:             Thomson Reuters                                   
                                                                       
 Description:        European companies including Shell, Eni and       
                     Peugeot have been holding talks with Iranian      
                     officials in anticipation of sanctions against    
                     Tehran being eased.                               
 
 
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Transcript (May be auto-generated)

                 The prospect of the biggest economy in decades coming back into the global fold 
has some in the markets rubbing their hands - even before it happens. Iran 
should bring its oil onto the market. Oil prices will tumble more, so we don't 
face the threat of inflation, we have more spending power, and the Fed maybe has
no reason to hike rates. That means a liquidity high, cheap resources, and the 
global economy, everything's going in favor of shares. Baader Bank's Robert 
Halver is not the only excited one. It may take until the middle of next year 
for Iran's oil exports to start rebounding, a complex web of sanctions to be 
lifted, but bankers say investors are already lining up for when oil revenues 
start flowing. The outlook is tempting: GDP to rise by 5% in the year after the 
nuclear deal, according to one estimate - and by 7% or 8% after that. Meaning 
tens of billions of dollars of contracts for local and foreign companies. And a 
boost in trade with the EU alone to over EUR30 billion per annum over three 
years. Reuters Breakingviews' Edward Hadas: Most obviously, they will spend the 
money on increasing GDP - increasing exports of oil, increasing imports of 
consumer and medical, industrial goods. Some people worry that they'll spend it 
to support terrorism. That seems to me unlikely because one of the goals of the 
Iranian president and the Iranian government right now is to gain respect in the
world. Which could be a breakthrough in the tense relationships of the region, 
according to DGAP's Iran expert, Behrooz Abdolvand. Iran has always been seen as
a part of the problem in the Middle East, Now, it will be seen as a part of the 
solution. Except that is by Israel. The Jewish state's prime minister dead set 
against a deal he says is a sure path to Iran getting nuclear weapons. And 
willing to put as much pressure on the US as possible to decelerate - even halt 
- sanctions lifting. Domestically, there are worries too. An outdated legal 
system, restrictive labor laws, and - after years of sanctions - lack of 
experience with foreign investors some issues on Iran's list. But even if it 
takes time, another million to million and half barrels of oil coming to the 
market every day will mean cheaper energy for the global consumer. And with the 
specter of austerity still hanging over much of the developed world, it's the 
customer that counts