Iran’s equity market has entered one of its strongest phases of retail liquidity inflow in recent years, marking a decisive shift after months of persistent capital flight.
Between late September and early December 2025, more than 4,300 billion tomans ($35 million) of fresh retail deposits flowed into brokerage accounts. At the same time, 5,310 billion tomans ($43 million) were withdrawn from fixed-income funds, most of which moved toward large, export-oriented stocks.
This 75-day period represents the most significant rotation of capital since 2021 and placed the main index within reach of a historic breakout.
The turning point emerged in early autumn, when retail investors injected 1,800 billion tomans ($14.6 million) into brokerages. Net retail inflows into equities reached 1,380 billion tomans ($11.2 million), while a remarkable 4,120 billion tomans ($33.5 million) targeted major index-moving stocks, particularly in metals, petrochemicals and refined products.
Simultaneously, fixed-income funds saw 1,840 billion tomans ($15 million) in redemptions, signaling a clear shift away from low-yield instruments. The benchmark index responded with over 6% growth, led again by dollar-linked sectors.
Momentum accelerated in October–November. Although retail deposits dipped slightly to 1,500 billion tomans ($12.2 million), the quality of inflows strengthened: index-heavy stocks absorbed an unprecedented 5,930 billion tomans ($48.2 million). Redemptions from fixed-income funds increased to 2,400 billion tomans ($19.5 million), much of which moved directly into blue-chip names.
For the first time in 18 months, institutional investors—previously consistent net sellers—reduced sell pressure by roughly 25% and occasionally became net buyers. These forces contributed to an 8.2% rise in the main index and a 9.1% increase in the equal-weighted gauge.
The first half of December showed a calmer but still constructive pattern. Retail deposits reached 1,000 billion tomans ($8.1 million), net inflows to equities totaled 1,050 billion tomans ($8.5 million) and 1,980 billion tomans ($16.1 million) were directed to key index drivers. Fixed-income redemptions amounted to 1,170 billion tomans ($9.5 million), implying that the broader rotation away from conservative instruments remains intact even as the pace cools. The market has clearly shifted from an aggressive accumulation phase to a more selective, stable mode.
Five Factors
Five factors explain why retail liquidity has returned with such force. First, the sheer scale of outflows from fixed-income funds—more than 5,300 billion tomans ($43 million) in just three months—reflects a meaningful change in risk appetite. Second, roughly 78% of all new inflows—over 12,000 billion tomans ($97.5 million)—targeted about 30 large, index-moving stocks, mirroring patterns seen in past rally cycles. Third, institutional behavior shifted materially as legal entities reduced supply and even turned net buyers in some sessions, easing pressure on retail participants. Fourth, nine-month earnings surprised strongly to the upside, averaging 22% above analysts’ forecasts, particularly in metals and petrochemicals. Finally, a period of relative macro stability and softer political-risk perceptions provided confidence for renewed focus on export-driven sectors.
Despite these tailwinds, vulnerabilities remain. Geopolitical risks, sanctions uncertainty, the persistent pull of parallel markets such as gold and FX, and still-shallow daily turnover keep the market sensitive to news flow.
In the near term, maintaining monthly inflows above 1,000 billion tomans ($8.1 million) could support a further 5–8% rise in the benchmark by late December.
Over the medium term, sustained monthly inflows around 1,500 billion tomans ($12.2 million) and strong year-end earnings could lift the index into the 3.7–3.8 million range. Looking into 2026, if macro stability holds, the market may attempt to test a historical peak near 4.2 million.
The recent inflow cycle demonstrates that, despite structural challenges, Iran’s capital market remains capable of attracting and mobilizing retail liquidity when confidence, fundamentals and macro signals align.
