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US election could hit Iran, says frontier markets veteran

US election could hit Iran, says frontier markets veteran

US politics is in limbo and whoever assumes the presidency needs to realise that the last thing they should do is isolate Iran, according to Charlemagne Capital’s Dominic Bokor-Ingram.

Speaking to Citywire Selector, Ingram, who runs the Charlemagne Magna New Frontiers fund and also manages the Iran-focused Turquoise Variable Capital Investment fund, said isolating Iran by the US could mean Islamic State (IS) gains control of Iranian cities.

'If IS had been able to get control of cities like Basra, then they would have had access to six million barrels of oil a day which could finance a lot of terrorism.'

'The reason I’m concerned about US politics with Iran is because when the nuclear deal was done there were a lot of people in Iran who were against it.'

'Some of the religious leadership were against the deal and a lot of people have been making money out of the sanctions embargo. Wherever you have an unfree market you have a black market and some people can make a lot of money out of that.'

Ticking clock

Ingram said Iranian President Rouhani has a limited amount of time to showcase the positive impacts of a good relationship on nuclear capabilities between the US and Iran.

'President Rouhani needs to show the positive impacts of a deal otherwise the deal itself will be questioned more and more. You have to generate economic growth somehow and the US have been very slow in clarifying the rules of engagement for foreign companies, and particularly banks, wishing to trade with Iran.’

'The US have been very slow to clarify what the big global banks are allowed to do with regards to Iran, and  because of the fines that have been levied in the past, the global banks are reluctant to engage with Iran.'

Ingram said domestic Iranian politics is fine, but the US needs to be clear on their actions in relation to Iran in order for deals between the two to work.

'The US has to allow the deal to work in order for economic growth to be generated in Iran, which will maintain stability in the Iranian administration.'

'The biggest risk in the Iran story is whether the next US Presidential administration allow Iran to trade freely with the rest of the world.'

The Charlemagne Magna New Frontiers fund returned 27.31% in USD over the three years to the end of September 2016. This compares with a 0.73% rise by its Citywire-assigned benchmark, the MSCI Frontier Markets TR USD, over the same time period.

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