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January 4th, 2021 
Awake Goy 
According to Note 2 of the budget law of the current Iranian calendar year (began on March 20, 2020), the government is allowed to offer and sell its remaining shares in the state-owned companies in the usual way or through the exchange-traded funds (ETFs).
Following this legal capacity, at the beginning of this year, the cabinet allowed the Ministry of Finance and Economic Affairs to transfer the remaining government shares in the framework of three ETFs.
An ETF is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occasionally occur.
In May, 2020, the government sold shares in three banks and two insurance companies via the first exchange-traded fund (dubbed Dara First).
The bank-based ETF holds 17 percent of government stake in Tejarat Bank, 17 percent in Bank Mellat, 18.32 percent in Bank Saderat Iran, 17.34 percent in Alborz Insurance Company and 11.44 percent in Amin Reinsurance Company.
Dara First, listed on Tehran Stock Exchange, which is Iran’s major stock exchange, was the first fund from a series of three ETFs, through them shares of some state-owned organizations and companies are planned to be offered.
The shares to be offered via the mentioned Iranian ETFs belong to those governmental bodies defined in Iran’s privatization program, a comprehensive plan seriously followed up by the government to downsize and reduce its role in the economy.
The second ETF (dubbed First Refinery, or Dara Second), which holds government shares in four major oil refining companies, namely Tehran Oil Refining Company, Isfahan Oil Refining Company, Tabriz Oil Refining Company and Bandar Abbas Oil Refining Company, was offered on August 26.
The government owns 20 percent of shares in each refinery.
It has also a plan to divest shares in giant auto and metal companies through a third ETF (dubbed Dara Third). The third fund is expected to hold 12.05 percent of government stakes in the National Iranian Copper Industry Company, 17.2 percent in Mobarakeh Steel Company, 14.04 percent in Iran Khodro, and 23 percent in SAIPA (the two main domestic carmakers).
Now, while the subject of second and third ETFs offerings is still hot in the media and there is a lot of speculation about the timing of these offerings, some experts and those active in the capital market believe that the ETF idea is essentially wrong, saying that although the government may have achieved its goals of offering ETFs, but the capital market and shareholders have not benefited.
Behrouz Shohadaei, a capital market expert, believes that the way the government has planned for these offerings is wrong from the beginning and the government should not continue to insist on staying in the wrong direction.
In a recent interview, the expert has said, “As sanctions and financial problems escalated, the government decided to provide some of the funding it needed, but still refused to provide management to those who owned it. So the government decided to pursue the transfer of government shares through ETFs, thereby trying to raise some of its funding.”
“What we are seeing in the market now is that this type of divesting has not worked well. The government planned a wrong thing and still insists on it. No one doubts that the government should be downsized, but it has not done the right thing in this regard”, he concluded.
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