A subsidiary of Iran's largest bank, Bank Melli Iran, plans to launch a fund of up to €300m to invest in Tehran's Stock Exchange, providing the first chance for foreigners to take a high-risk gamble on Iran's bourse.

Flying in the face of tightening economic sanctions amid international pressure over the Islamic republic's nuclear programme, the First Persian Equities Fund already has verbal commitments of around €100m ($130m, £70m) with strong interest from European hedge funds and emerging markets funds, said Stephen Austen, managing director of Mehr, a subsidiary of the Tehran-listed Bank Melli Iran Investment Company.