TEHRAN, Iran���Research shows�that countries where businesses can easily raise funds in the bond market typically experience comparatively faster and stronger recoveries from a recession. This finding is important for a nascent market at its embryonic stage, such as Iran. Indeed, with hopes for economic growth, Iran is now developing its�Islamic bond market.

Iran Fara Bourse (IFB) is an over-the-counter (OTC) market, meaning trading is done directly between two parties. It is home to a plethora of modern financial instruments, all of which are Sharia-compliant. These include instruments such as�Murabaha, Musharakah, Ijarah, different types of Sukuk with various maturities�and also�Islamic Treasury Bills�(short-term sovereign debt). The Sharia-compliant Islamic T-bills are the latest addition, having made their�debut on Sept.�30.

According to Amir Hamooni, CEO of IFB, Iran ranks third among Islamic countries in the secondary market trades of Sharia-compliant securities���after Turkey and Egypt���having experienced a 30% year-on-year growth in such transactions. Hamooni also notes that�86% of debt market�transactions in Iran pertain to the OTC exchange market. In this vein, he says that the current value of the�Iranian credit market�has reached 120 trillion rials ($4 billion).

Nonetheless, the Iranian bond market is still in its infancy. The governor of the Central Bank of Iran, Valiollah Seif, has stated�that�with respect to�overall financing needs�in the Iranian fiscal year that ended March 20, 2015, the bond market provided for less than 3.2%, while some 89.2 % was facilitated by money markets and 7.6% by the stock exchange. To provide a better picture of the situation: on average,�credit markets�comprise 75% of capital markets around the world. In comparison, in the past four years, the bond market�accounted for merely 5%�of transactions in Iranian capital markets.
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