Joe: Do you like Persian food?

Joe: Yeah. Oh, yeah. Definitely. Yeah. I make I'm very proud of this if I say so myself. A mean gourmet sapsi. I actually don't know if I'm pronouncing it wrong, but supposedly it's the Iranian national dish, and it's a sort of like beef stew with spinach and a bunch of different herbs in it. So, it's really green and then with kidney beans, it's delicious. And the thing I like about it is you can make it and then store it, freeze it, and it actually gets better over the next week or so.

Joe: This is my idea for a restaurant, which is just like make food and then put it in the fridge for overnight and then serve it cold cuz I think like every dish is better like after a night in the fridge somehow like all the flavors come out. I was like, why don't we just make this the default eating?

Joe: Look, I know very little about Iran. I also feel like in my professional career there are multiple rounds of this big protests etc. Is this the moment regime change? And to your point which you say like there is very little that I trust when I see it reported. I am extremely skeptical. Oh, tonight was the biggest set of protests we've had in years. There's never been a protest. Look at which city this is. I'm sure there are well-informed people talking about this. I don't have the heristics to know generally I don't know who is well informed what is actually signal versus what is noise but obviously yet another sort of extraordinary development unfolding here in uh 2026

Tracy: ma what have you been hearing

Matcha Voit: so I agree that it's difficult really to tell what are the actual facts for sure there's been a lot of deaths and uh it's horrible and it's tragic and it's definitely in thousands of of of deaths but at the same time, you know, there's complete blackout. What works right now is the actually outgoing landline calls but with limited time. So, for example, my one of my analysts who is actually in London at the moment, he's able to speak to his parents when they call him and then the call gets interrupted quite quickly, but at least he he can hear from them. We weren't actually sure for quite some time whether the stock market was working or not because of the blackout because it was not possible to even to read any news from the official news agencies in Iran.

Matcha Voit: So everything was down including from what I've read including even like the internal um domestic like an internet network in Iran that is uh that is very controlled. This was this was also down. Even ATM stopped working for a moment. uh I think just like a one day brief moment cash transfers were working bank transfers apparently the local you know Uber equivalent called snap was working all the time however GPS was not working properly so it was difficult to locate the driver and so on so exactly what you said it's it's it's difficult to understand exactly what is going on

Tracy: So this is of course Matcha Voit he is the CEO of Amtalon Capital which is a fund that specializes in Iranian equities and there aren't that many of those ground.

Tracy: I don't even know if there's a second one.

Tracy: Yeah. So, we enjoy talking to him and he has really good insights into what is actually happening on the ground in Iran. The first question I should ask directly is, is your team okay? Are they safe and well, the people that you actually have in the country?

Matcha Voit: Thank you for asking about that, Tracy. We have uh we have a local team in Thran, part of which is actually in London at the moment. Now, analysts who are in Tehran, who were in Tehran, they left Thran a few days ago when the protests were getting more intense to smaller cities to their hometowns. So, the last time we've heard from them was a couple of days ago. At that time, they were they were in a safe place. So, I believe they're they're all fine.

Tracy: I mean, just your intuition, let's actually set aside the question of like, is this a moment where the regime would get toppled or something like that, etc. Does this feel either quantitatively or qualitatively different from various episodes over the last two decades in which suddenly the internet is looking at fairly blurry videos of Iranian protesters and asking like does this feel different somehow?

Matcha Voit: Yes, it definitely does.

Matcha Voit: Okay. So first of all obviously looking at you know the history it teaches you not to get excited or to I don't know hopeful for any meaningful changes. However it does feel different and maybe maybe two things could be interesting here. First of all as you said Joe at the beginning it's it's not the first protest it's you know another protest over the years. And if you look at comparable situations for example Poland Poland is always close uh to my heart. I'm I'm Polish originally and Poland when we were trying to get rid of the Soviet Union it took 9 years and every year there was a massive protest this protest you know died and then uh you know with very brutal reaction from from the government. Then the next year there was another protest. In the meantime there was martial law with you know military on the streets and so on. But finally many things came together and there was a tipping point at which everything collapsed. Although it didn't collapse actually it was it was a negotiated transition to a different regime. So you know the establishment got a got an offramp to move on and it was a peaceful negotiated transition. Similar in South Africa based on what I know I mean it was you know happening in the 80s and then in the '90s uh there were actual changes in Iran. The situation is different because for many reasons demographics have changed. So now you have uh I believe around 93 million people out of which 50 million is between you know 15 and 49 years old like the active part of the population and there are many more young people who are educated who have you know access to internet have their own aspirations and they don't believe they can achieve those aspirations in the current environment and they also look at their parents and they think that they just wasted the whole generation, you know, waiting and doing nothing. So, this makes them more angry and also like more decisive and confrontational. That's why I think it's uh you know, the protests were so intense and so widespread. Another reason, another thing that's changed is like you remember a few years ago three uh 2022 uh there were in 23 there were protests around social freedoms after um an Iranian girl Maramini died and this was driven by basically by social freedoms and and mainly involved young people. Right now is driven by economic difficulties and this is this touches every every single household in Iran.

Tracy: Yeah. I wanted to ask you about precisely this because the I don't want to say the cause of the recent unrest, but certainly one of the sparks seems to have been a further collapse in the currency, even higher inflation. And wasn't there something about a bank as well? Um, a bank that was going bust um supposedly with ties to the regime. How much did financial stress play into the current round of civil unrest?

Matcha Voit: Well, 100% this was the main cause. Look, the protest started on the Grand Bazar in Tehran. So these uh bazaris, I mean people who operate bazaars, they many of them run like multi-million dollar revenue companies there actually. It's like this massive shopping mall with tens of thousands of you know smaller or bigger traders there and they need stability to just you know do business right. protesting revolution like this is the last thing they would think about but they are in a situation you know where that many of them are importers to import you need uh to be able to obtain a hard currency to just pay your supplier from Vietnam China whoever it's it's impossible to obtain to access hard currency or there's not enough of it and that's obviously because of sanctions because of sanctions exports of Iran just went down Iran is exporting oil only to China so China's is dictating all the terms including big discounts in the price that they are paying but also the terms of the payments. You know the China is paying a big part of their payments are in yuan and they and they arrive in bank accounts in some Chinese banks. So Iran, you know, the only thing Iran can do with it is is to buy some Chinese goods and and and what Iran needs is is to pay for essential goods like, you know, some food products or some medical products that they need to import at at any cost. And once they allocate all their hard currency reserves to those essential products, there is not much left for other businesses. So this is one thing that is difficult to run a business when you cannot obtain currency, you have uh you know inflation running wild. But on the other hand, your consumers are losing their purchasing power at an extraordinary pace. So no one is buying basically right. You have to spend on uh you know eggs, milk and bread probably you know more than 10% of your average uh monthly salary. So it looks it looks really difficult on the economic side.

Tracy: Can I ask very quickly do you have a sense of what the current exchange rate actually is? because you know this is one of the few currencies in the world that we cannot look up on a Bloomberg terminal.

Matcha Voit: Yeah, it's around 1.5 million realale per $1, which means it went down uh around 97 98% over the last decade and around almost 50% since before the war with Israel last year. So over the last 7 months. So it's really it's really falling fast. Oh, and one more thing you asked about the bank. Yes, actually there was a bank collapsing in Iran just a few months ago. I mean they formally recognized that it should be nationalized and it's extraordinary because the size of the collapse it was so big that it actually affected the budget of the country the country budget for this year. So they had to reduce subsidies and and just change you know the expenditures of the budget to make room for the amount that they had to I think it was like $5 billion that they had to put into this bank so that it doesn't you know collapse. It was basically and it's another it's another example that you know makes people angry obviously because it's it's it was a huge example of corruption. So, you know, there was a local well-connected entrepreneur who was running a few construction companies and it wasn't the case that, you know, he called a few banks and asked for some preferential loans. No, he set up a bank, offered the highest interest rates on the market. So, many people just put their deposits into this bank and then he was using those deposits to make loans to his own companies.

Tracy: I think it was like a majority of the loans were to his own companies. He built the biggest shopping mall in the in the region, which was, you know, a crazy idea from the beginning and many things like this, right? So, another example of thronism and corruption.

Joe: This is the shopping mall that's like as big as the Pentagon or something.

Tracy: Yeah. Twice as big. According I I read the Wall Street Journal article, twice as big as the Pentagon, this luxury shopping mall in Iran suffering from massive hyperinflation and all the sorts. But I have to say starting your own bank to then just fund your construction company, a kind of a brilliant idea. B, this is why bank supervision and various things

Joe: is important

Joe: actually exist. It's surreal to me this reality of here is a country that right now is a de facto information black hole. You mentioned we don't know if the stock market is trading. Here's a country on earth and right now where we are in New York or where you are in London, we can't even answer the simple question, is the stock market functioning right now?

Matcha Voit: Yeah, exactly. So all the stories that I that I hear is that the way people were able to communicate is because someone had access to a Starlink operating in Iran or someone's friend was working at a hospital and hospital had some access to either the wide internet or some of these local networks. So that's why also it's it's not possible for the country to keep the blackout at this scale and intensity for too long because you know the whole economy stops right actually the administration of the countries is not possible right without uh without internet so it's it was it was sharp intense but it has to be shortterm because otherwise you know the country will will just stop. what happens to your portfolio in this particular scenario, your investments.

Matcha Voit: So, the stock market seems to have been stable over the last week. I don't see the exact numbers yet in terms of, for example, liquidity. And I and I suspect that, you know, there was not much going on because I'm not sure if even local investors had a chance to were able to put orders online, right? Maybe maybe it was old school, you know, calling your broker or going to your broker. So, it was stable. So, so, so nothing actually actually it went up by 4% and the currency was stable too. The currency is easier to to manipulate by by the central bank using some reserves especially when when there is low liquidity. So, I think what will be more interesting is the next few weeks. So, for example, what happened last year after the war when there was a war between Iran and Israel in June, the stock market was shut down for around two weeks. After it reopened, the prices didn't change much. But then local investors, mainly retail investors, this uh retail driven market started selling because they didn't have access to their funds. So they started selling at any price just to get money out. And there was a massive selling pressure that lasted from July until September. And when the buyers saw a selling pressure like this, so every day you can see the queue of unfilled orders building up that will go to the next day and the next day and the next day. So people just stopped buying as well obviously. So the market went down like uh irrespective of you know which stocks, what quality, what valuation or whatever just a massive sell-off which lasted two three months and then it rebounded. So um it went down like in dollar terms from let's say index of I don't know 360 to 230. Yes, if I'm if I'm looking at at this correctly. So let's say 36% in dollar terms in just two and a half months. The selling pressure then was exhausted. All the selling all the sales were were absorbed. valuations went down to the one of the I think very close levels to the like all-time lows in the history of the of the Iranian stock market which is around 20 years old. So, you know, it's always cheap, right? But this time it went, you know, below three times uh net earnings a median median for the market, right? So, you could probably find stocks, you know, at two times earnings. Then it rebounded, but it's still around, you know, like three and a half times earnings. So, valuations are very much still driven by war. So everything is priced for war, right? So that's that's the sentiment hasn't really recovered after the last war and now we had protests. So everything in Iran is priced for war basically.

Tracy: You know in the news obviously we hear or I think we get a better grasp and again I plead a lot of ignorance. This not something I have a lot of familiarity with but what the protesters want and you hear about young people and wanting more freedoms. Can you give a sort of I don't know political economy breakdown of like you know you don't hear about the people who obviously don't want regime change generally speaking they we don't know much about them or who they are. Who are the sort of different factions socioeconomically that and how they allocate to either side sort of I guess a a class understanding of the tensions. M h so there's a big group of young people and young people want freedom and opportunities and like fair rules in the economy basically there are older people adults in larger cities which are more liberal definitely than tean is a big city it's like 12 million people altogether and life in Thran looks different to most other cities in Iran with you know women no longer wearing hijab perhaps it's much more open. It's much more liberal. But also there is a big group of people who are very very religious and they support the government that is also um there is a religious government. So they the the concept of Islamic republic is very close close to their heart and they support it and and it's part of their religion and part of their traditions. uh so in terms of you know the how they observe religious holidays uh uh you know going to mosque uh dressing in a in a certain way and so on and now how does this split I would say that uh probably between 10 and 30% is the religious part 10 like very religious and just listening to the to the prayer and you know whatever political advice comes from the mosque and so on 30% or let's say a third of the society just being religious and and supporting the um Islamic Republic in the as as a religious uh state. Just a small note that it's an Islamic republic but very tolerant of of other religions. I mean all the churches work normally there from um Jewish to Christian to Zarustrian you know everyone is doing his own thing in terms of religion in Iran and it's and it's okay. So, and the rest are people who want a modern open state with the young including the young people who want it fast basically and and and want to be able to follow their dreams and aspirations. So, so, so that would be the breakdown.

Joe: So, I should just say we're recording this on January 15th. The headlines are coming pretty fast nowadays. So, who knows what will happen by the time we publish this episode in just 24 hours or so. But the latest headline is that tensions seem to have eased a little bit with the US because the Iranian government said they're not going to kill any more people or told Trump they're not going to execute more people. How should we interpret that? Is this all over or do you expect uh some unrest to continue?

Matcha Voit: Well, it's hard to predict. It's it's it's very unpredictable. I mean unrest is difficult to predict the dynamics around the unrest. Then you know the government of Iran is difficult to predict but you know the government of the US is difficult to predict because you know right now yesterday today yesterday you had news you had news that President Trump was saying that yes he got information that you know killing stopped so this is what he was you know what he wanted to achieve so it looks better the day before everyone thought that you know they are getting ready to strike Iran so I think those things can change in 24 hours so it's it's it's just impossible to predict the Only thing I would I would say is that because it does feel different this time the scale of the protests and the reasons of the protest and also the government just can't spend you know their way out of the problem. It's it's the the financial situation is really tough but some changes are likely. I'm not saying that within the next few days or weeks maybe it will take months but I think it's just moving this direction. So there are some changes that are likely and many scenarios are possible. I mean look at Venezuela. There was no regime change there, right? I mean there was a like again negotiated solution with you know Maduro taken out and and the rest of the uh government and establishment just in place but but they have to cooperate right. So there's probably more than one scenario possible uh for the future. What a world we live in where civil unrest is uh becoming a major investment theme. Thank you, Matcha, for coming on Lots More. Really appreciate another update from you.

Tracy: Thank you for having me.

Joe: Lots More is produced by Carmen Rodriguez and Dashel Bennett with help from Moses Andam and Kale Brooks. Our sound engineer is Blake Maples. Please rate, review, and subscribe to OddLotss and lots more on your favorite podcast platforms. And remember that Bloomberg subscribers can listen to all our podcasts ad free by connecting through Apple Podcasts. Thanks for listening.