After solid gains a session earlier, Tehran stocks staged another rally on Sunday and climbed 3.18% to extend a nine-day winning streak.
Adding 21,242.42 points, the main gauge of Tehran Stock Exchange, TEDPIX, climbed above 690,000 points to put the benchmark’s monthly growth at an unprecedented 35%.
The rally was led mainly by giant petrochemical and metal companies and banks. However, the equal-weighted index closed lower at 1.9% amid sell-off in many small cap stocks as investors traded cautiously in the late hours of trading while many sold shares to save earlier gains.
Sunday marked a record in the value of trade as investors exchanged shares worth 100 trillion rial ($650 million), indicating yet again the inflow of huge amounts of liquidity into the market, according to analytical Donyaye Bourse website.
Observers ascribe the growing traction of stock market largely to sluggish parallel markets and the government’s declared policy to support the stock market.
Lower interest rates on bank deposits compared with soaring annual inflation, restrictions on gold and foreign currency trade and a prolonged recession in the real estate market has encouraged investors to embrace the bourse.
The most telling evidence of the increasing attraction of the stock market is the steep rise in the number of trading codes issued for novice investors.
According to the Central Securities Depository of Iran data, more than 822,000 trading codes were issued for investors during the last fiscal year that ended March 19, putting the total number of stock market investors at more than 11.65 million.
President Hassan Rouhani has ordered his economy minster to cut red tape and remove hurdles to listing of big holding companies on the stock exchange and step up efforts to render it a reliable and low-risk market.
However, Mehdi Tahani, a market analyst, says that the market could face a massive outflow of liquidity if the government stops supporting the stock market, IRNA reported.
“Incongruity in listed companies’ profits with their share prices is also one of the biggest threats to the market,” he added, recalling the unreasonable surge in share prices.
Market Performance
The TSE's main index TEDPIX gained 21,242.42 points, or 3.18%, on Sunday to end trading at 690,147.6.
About 10.97 billion shares valued at 102.83 trillion rials ($672.11 million) changed hands at TSE for the day.
Trading at TSE and over-the-counter Iran Fara Bourse starts on Saturday and ends Wednesday.
Parsian Bank was the biggest winner as its shares went up 32.67% to 1,275 rials per share.
Pars Electric Company incurred the biggest loss among all TSE-listed companies and went down 4.68% to 74,308 rials per share.
Tehran Stock Exchange contributed the most to the benchmark's fall, followed by Iran Mercantile Exchange, Sepid Farab kavir Steel manufacturing Company and Ofogh Koorosh Chain Stores Company.
Persian Gulf Petrochemical Industries Company gave the biggest boost to the benchmark index, followed by Mobarakeh Steel Company, Parsian Bank and National Iranian Copper Industries Company.
IFX Up 1.71%
Iran Fara Bourse main index, IFX ,gained 144.64 points, or 1.71%, to close Sunday trade at 8,583.18.
About 3.7 billion securities valued at 48.17 trillion rials ($314.85 million) were traded at the over-the-counter exchange for the day.
Esfahan Steel Company had the highest number of traded shares as 455.48 million of its shares worth 1.73 trillion rials ($11.34 million) were traded.
Iran Fara Bourse, General Mechanic Company, Jahrom Power Plant Development Company and Kerman Development Investment Company had the most negative impact on IFX.
Middle East Mines and Mineral Industries Development Holding Company gave the biggest boost to IFX, followed by Saba Tamin Investment Company, Hormozgan Steel Company and Esfahan Steel Company.
