Iran’s stock market is bigger than Switzerland’s
Recently, I was casually browsing a list of global stock exchanges ranked by market cap. Buried in the rankings, something made me stop and double-check: Iran’s Tehran Stock Exchange was sitting at number 15 in the world, with a market cap of around $2 trillion as of December 31, 2024. That’s bigger than the SIX Swiss Exchange and the Australian Securities Exchange.
That felt impossible. So I immediately fell down a research rabbit hole.
It turns out, this isn’t the result of a quietly thriving economy. It’s the byproduct of hyperinflation, currency collapse, government control, and a uniquely isolated financial system. It’s one of those cases where a number looks impressive until you understand how it got there.
To make sense of Iran’s stock market, you have to start with its macro environment. For over four decades, Iran has lived under some of the harshest economic sanctions ever imposed. The US and its allies isolated Iran from the global financial system, cutting off its banks from SWIFT, blocking energy exports, freezing overseas assets, and banning access to dual-use technology. The result is an economic island, cut off from international capital flows, with very limited options for preserving wealth.
When your local currency is collapsing and you can’t move money abroad, you look for whatever might hold value. In Iran, that became the stock market. Not because people believed in company fundamentals, but because owning stocks was one of the few ways to avoid watching your savings evaporate.
Between 2018 and 2024, the Iranian rial collapsed from roughly 42,000 to the dollar to over 894,000. Inflation ran between 30% and 50% annually. Against that backdrop, the Tehran Exchange index went from 96,000 points in 2018 to over 2.5 million by 2023.
One academic paper I came across described this perfectly: it called the Tehran market a “rational bubble.” In a situation where people expect prices to keep rising because everyone’s racing to hedge against inflation, even if they know the market is detached from reality, it can be rational to keep buying in.
On top of that, the government actively props up the market. When stock prices waver, it injects capital from its sovereign wealth fund NDF. It pushes state-owned enterprises to IPO to raise cash and deepen the market for policy management.
And then there’s the wildest part: a program called “Justice Shares.” It started in 2006 as a way to distribute shares of major state-owned companies to about 60% of the population. For years, people couldn’t trade them, but only collect dividends. In 2020, under economic pressure, the government opened up trading. Millions of new, financially unsophisticated investors flooded the market, many of them immediately selling their holdings for cash.
State-linked investment funds, military pension groups, and semi-public foundations "Bonyads" quietly scooped up the supply at bargain prices. In the name of market liberalization, the program effectively concentrated corporate ownership into the hands of a few powerful entities.
