Books of brokerage firms operating in Iran's capital market show significant improvement in performance in the Iranian month to Dec. 20.
Deals worth 6,750 trillion rials ($27 billion) were recorded by the brokers, which was 180% higher than a month earlier.
On annualized basis, the deals shot up 680% thanks to a myriad of factors, most importantly the entry of new investors in the bourse, increase in listed companies and trading instruments plus traction of the market.
Brokerage companies processed deals in shares, bonds, derivative contracts and exchange-traded funds, according to Securities and Exchange News Agency (SENA).
Deals reached 13,000 trillion rials ($52 billion) during the third quarter of the current fiscal ending Dec. 20 and 42,600 trillion rials ($170 billion) since the beginning of the year in March.
Online trade accounted for 5,300 trillion rials ($21.2 billion) of deals last month, indicating that brokerage firms handled 78% of deals via online trade platforms.
Deals worth 20 trillion rials ($80 million) were conducted using algorithmic trading programs. Algorithmic trading is the process of using computers programmed to follow a defined set of instructions (or algorithms) for placing a trade in order to generate profits at a speed and frequency that is impossible for a human trader.
The defined rules are based on timing, price, quantity or other mathematical models. Apart from profit opportunities for the trader, algo-trading makes markets more liquid and makes trading more systematic by removing the impact of human emotions on trading activities.
Deals in bonds and future contracts reached 57 trillion rials and 5.4 trillion rials, respectively, during the month. In the period, brokers handled deals in ETF units worth 622 trillion rials. Like stocks, ETF units are traded on exchanges and can be bought and sold via a broker or on an online trading platform.
Main Players
While 109 brokerage companies are operating in the stock market, majority of capital market deals are processed by a handful of brokers.
According to SENA, 61% of deals last month were processed by 15 brokerage companies. Mofid Securities Company was in the lead processing 25% alone. The major brokerage company handled deals worth 1,650 trillion rials ($6.6 billion). It also accounted for almost all deals via electronic platforms.
This was followed by Agah Brokerage with deals worth 800 trillion rials ($3.2 billion) or 12% of the total.
Mobin Sarmaye and Farabi brokerages were third and fourth, respectively, accounting for 250 trillion and 200 trillion rials of the deals.
