Tehran’s share market showed some sign of recovery on Monday after a relatively deep correction phase that wiped off almost 13% of the value of stocks in five consecutive sessions of bear market.
The market-cap weighted benchmark of Tehran Stock Exchange, TEDPIX, closed the day slightly higher, gaining 2,130 points, or 0.12%.
This is while the equal-weighted index was still down 0.58%, though sell-off pressure eased to some extent. The index gives the same weight to all shares irrespective of their market capitalization.
Value of retail trade reached 180 trillion rials ($800 million) on Monday -- a meaningful 50% increase compared to Sunday’s close.
The TSE plunged close to 90,000 points or 4.7% on Sunday to retreat back to 1,813,574 points, marking one of three largest downturns in the history of the bourse.
The market recovery also coincided with change in TSE trading hours on Monday where majority of small cap shares traded in the first round (8:30-11:45 a.m.) and large cap stocks in the second (12:00- 03:15 p.m.).
Stocks rebounded obviously on support of intuitional traders and big shareholders of giant companies in the second round. Able to trade only in the first (morning) session, many small cap shares could not find much support and closed in the red.
A few minutes after the second trading session opened, ticker symbols in giant commodity and metal stocks turned green sending signals that the correction phase was seemingly over.
Stocks rebounded on a series of positive reports in the past two days. Boursepress reported that the Capital Market Development Fund was instructed to inject 140 trillion rials ($640 million) into the stock market. The fund supports share markets and safeguards the interest of investors.
There were also reports that the Oil Ministry had decided to reduce feedstock prices for refinery and petrochemical companies. This was seen as significantly increasing profit margins of these companies.
In addition, Iran Energy Exchange suspended a plan on Sunday to offer salaf contracts for selling 520,000 barrels of crude oil. There were fears among investors that the plan would lead to capital outflow from stocks to the bond market.
Spike in currency rates also catalyzed the upbeat mood particularly impacting the shares of export-based companies. Exporting listed companies earn more when their earnings are converted into the rial.
TSE Trade
Almost 15.34 billion shares valued at 163.66 trillion rials ($727.41m) changed hands at TSE for the day.
Telecommunication Company of Iran contributed the most to the benchmark's fall, followed by Islamic Republic of Iran Shipping Lines Company, Mobile Telecommunication Company of Iran and Iran Khodro Company.
Social Security Investment Company gave the biggest boost to the benchmark, followed by Mobarakeh Steel Company, National Iranian Copper Industries Company and Parsian Bank.
IFX Down 1.13%
Iran Fara Bourse main index, IFX, lost 218.37 points, or 1.13%, to close Monday trade at 19,123.08.
About 2.69 billion securities valued at 62.88 trillion rials ($279.47 million) were traded at the junior equity market.
Marun Petrochemical Company, Shahid Tondgooyan Petrochemical Company, Day Bank and Esfahan Steel Company had the most negative impact on IFX.
Gohar Zamin Iron Ore Company gave the biggest boost to IFX, followed by Pasargad Insurance Company, Arfa Iron and Steel Company and Melal Credit Institution.
