Are Large U.S. Firms Preparing For Business In Iran?
General Electric, Apple, HP Inc., Schlumberger and other U.S. companies are reportedly preparing for the lifting of economic sanctions against Iran so they can enter the market of 77 million people.
Concerned they might lag Asian and European competitors in Iran, some U.S. companies plan to hit the ground running as soon as sanctions are lifted, by drafting contracts and sending envoys, the Wall Street Journal reported.
Sanctions are expected to be eased in the wake of this year’s agreement among Iran, the U.S. and several other nations concerning Iran’s nuclear program.
Iran’s young, well-educated and tech-savvy consumer market is seen as potentially lucrative for Western firms.
Interested U.S. companies are dotting their I’s and crossing their T’s by consulting with officials from the State and Treasury departments to ensure that talks with Tehran by their non-U.S. subsidiaries remain compliant with the law, sources told the Journal.
HP Inc.‘s (NYSE:HPQ) Swiss unit reportedly circulated draft agreements with Iranian distributors last month in order to resell its computer products.
Non-U.S. HP distributors held meetings in Dubai and Tehran with the potential distributors.
Last year, Apple (NASDAQ:AAPL) began contacting Iranian distributors about possibly entering the nation to sell iPhones, desktop computers and opening Apple stores if Western sanctions are sufficiently relaxed.
But the negotiations have been slowed by Iran’s less-than-robust legal protections for intellectual property, according to the Journal.
Once sanctions are eased, Iran is expected to attract billions of dollars worth of investment in oil and gas fields, attracting GE‘s (NYSE:GE) oil service unit as well as Houston-based Schlumberger (NYSE:SLB), the world’s largest oilfield service company.
Elsewhere, Egypt raised interest rates for the first time in more than a year as the central bank seeks to curb inflation and boost the pound’s appeal amid a foreign-exchange crunch that has fueled speculation of a currency devaluation.
Policymakers, headed by Gov. Tarek Amer, increased the benchmark overnight deposit rate by 50 basis points to 9.25%, according to a statement on the central bank’s website.
The overnight lending rate was increased by the same amount to 10.25%.
Headline urban inflation accelerated to 11.1% at the end of November, the highest in five months.
The increase comes amid speculation the central bank will loosen its grip on the pound to counter a dollar shortage threatening to derail Egypt’s economic recovery.
The two largest state-owned lenders raised interest rates on local deposits in the past month to boost the pound’s appeal vs. the dollar, and the government began to provide cheap food items to contain inflation.