Lining Up to Invest in Iran

Investing in Iran
Investing in Iran   

Amid the prospect for easing sanctions against Iran's nuclear program, a London based firm specializing in emerging markets is preparing to invest in the Islamic Republic.

Charlemagne Capital and one of Iran's largest investment firms Turquoise Partners announced a partnership Tuesday.

Perception & Reality

"Iran is one of the biggest mismatches between perception and reality that I've seen in 25 years in emerging markets," said Dominic Bokor-Ingram, a portfolio manager with Charlemagne on Power Lunch Tuesday.

Customers use computers at an Internet cafe in Tehran, Iran.
Raheb Homavandi | Reuters
Customers use computers at an Internet cafe in Tehran, Iran.

Tehran's stock exchange is up eight percent in the week since an interim agreement was reached between Iran and the P5+1 made up of the United States, Great Britain, France, China, Russia and Germany. However year to date the market is down three percent.

Charlemagne plans to look at Iran's banking and telecom sectors first but Bokor-Ingram believes Iran's market is so well developed all sectors are ripe for investment.

The Tehran Stock Exchange has a market cap of 160 billion dollars with 300 public companies. If the Iranian market went into the global frontier market index immediately it would be worth one quarter of that index right now.

Terms You Can't Get Anywhere Else

"The market is trading at price to earnings multiple of five and the dividend yield is in the teens" according to Bokor-Ingram. He adds "these are terms that emerging market investors can't find anywhere else in the world."

When asked by CNBC's Tyler Mathisen how he feels about investing in a country that is heavily involved in terrorism and has vowed the destruction of Israel Bokor-Ingram said "our policy is to follow sanctions and if the US government says it is okay to invest or the European government says it is okay to invest then I don't see what we're doing is any different than what happens in the rest of the world."