Stephen Austen, managing director for the Middle East and North Africa for Standard Bank, said there was significant investor interest in Iranian shares despite the threat of US sanctions.
“They are certainly the cheapest market in the region and probably one of the cheapest anywhere in the world, trading at below five PEs (price-earnings multiples),” Austen said.
He said the bank had not taken a decision yet on where it would domicile the fund and planned to get around the market’s relative illiquidity by buying an existing portfolio.
Standard Bank, the international investment banking subsidiary of the Standard Bank Group, set up a full overseas branch at the Dubai International Financial Centre in February to tap into the growing business opportunities in the region.
Austen said the bank was particularly strong in acquisition finance and helped fund deals worth $500 million this summer. Its revenue had grown 35-40 per cent this year and it was rapidly building an equity derivatives and Islamic banking business in the region.
Standard Bank helped float the $200 million gold sukuk of the Dubai Multi Commodities Centre in May 2005 as well the region’s first securitization, the $26 million deal of Saudi Arabia’s KIC Holding.