Tehran Stock Exchange index hits record

By NASSER KARIMI

TEHRAN, Iran

The Tehran Stock Exchange rallied to a record high Wednesday, extending a months-long climb despite U.S. and U.N. sanctions that have hammered the economy.

The benchmark index rose half a percentage point to close at 15,080. The rise has pushed the exchange's total value to more than $70 billion, up from $59 billion at the start of the year.

Greater liquidity and investor enthusiasm over the government's push to privatize state-run firms by the end of 2011 have helped drive the market higher, according to analysts.

Iranian officials are looking to privatize more than 500 state firms through the end of next year in an effort to generate more than $12 billion.

Earlier this week, Iran finalized a deal to sell an 18 percent stake in Iran-Khodro, the country's biggest car maker, for about $430 million.

The automaker produces some 700,000 cars and trucks annually. It has joint ventures with France's Renault SA and Peugeot Citroen SA. A group of Iranian holding companies and a consortium of car parts producers bought the stake.

Iran plans to sell a stake in its second largest car maker company, Saipa, in the future.

Shares of 337 mostly government-run Iranian companies trade on the 43-year-old exchange.

Foreign investors with deeper pockets are largely steering clear of the market because of sanctions on Iran over its controversial nuclear program. Iran desperately needs cash to renovate its oil sector, which provides about 80 percent of its foreign revenue.

The country has planned to invest more than $200 billion in its oil industry over the next five years.

The West suspects Tehran of using its nuclear program to develop weapons. Iran denies the charge, saying the program is geared toward peaceful purposes like power generation.