Iran and Cuba – Lifting Sanctions Translates to $$$$$!

What happens to a country when the US and it’s buddies lift sanctions? Will Iran and Cuba stem to profit? Or is it big business that profits?

Already the lines are forming as the calculations of mega $$$$ create foam on the mouths of greed…. Iran needs infrastructure, they need commercial buildings, housing, and of course, banks. But there is another flood, Tehran’s stock market (Did you even know they had a stock market? I didn’t). While it isn’t much, ‘futures’ are everything. Brokerage Renaissance Capital is predicting that $1 billion will flow into the economy the first year alone! Other brokerages are already setting up compliant funds so that investors can begin hedging the Iranian market.

CEO, Richard Adley, made the obvious statement that Iran’s market is ‘underweight‘. Really, you think so?  Do they pay you to make those sort of analyses?

The Tehran stock market has 339 listed companies worth over $104 billion in industries such as chemicals, agriculture, telecommunications, automobiles, mining, steel, insurance, etc… In other words, well diversified. Over the last month their market has traded from a low of about 64,400 to 69,400 representing an increase of 8.33%. It rose 130% in 2013 and another 33% in 2014. Women are traders, companies are being privatized, inflation is still high, but lower than the staggering 35% it was.

The population is highly educated due to state funding for tuition, room and board at their universities. 97% of the adult population between 15 and 24 are literate. Oddly, the US and the UK refuse to provide their literacy rate on any website that I have uncovered. Woman make-up 60% of the student body at universities, and 35% of the 15-24 age group are in enrolled in higher education. Like Norway, their system trains high schoolers in a technical or vocational diploma.  While education is a top priority, jobs are scarce, but once the doors are open and conglomerates move in, they will find a very worthy, highly educated workforce to pick and choose from as candidates will most likely be quite eager.

Cuba’s stock market which is comprised of ‘one’ stock fund, has also seen a dramatic spike since the lifting of sanctions became a real potential. Last year their market hovered at the very real number of – 8 – (yes just 8), but spiked over 14 last December. A 75% increase!

Because the Cuban government invested heavily in medicine and bio-markets over the last 60 years, these are the areas that will see the most interest by outside investors initially. But there is a tremendous tourist market that will boost airlines, hotels, building, cruiselines, and food over the near and immediate term. Airbnb has already launched into Cuba with over 1000 listings.

While Cuban real estate is the new must-have, international buyers are still held at arms length. Marrying a Cuban is an option, given that property can only be legally bought by full-time residents, however, if you were to divorce, the property automatically reverts to the Cuban spouse 100%. Of course, if you want to move to Cuba and remain their – forever – you can buy real estate.

A new economy is a burgeoning one – it has nowhere to go but up! But, the respective governments in these two economies leave the slope a bit slippery and caution is the prudent attitude to maintain. While Iran is mostly Shi’a, this could become a threat to the Sunni majority of Saudi Arabia, our ‘other ally’. Not to mention Israel. And while Cuba remains communist, their trust in the US is minimal for obvious reasons. Time will tell whether these instabilities can calm. Only time.

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