The number of active trading codes in the stock market has shot up in the past two years, surging to 37.5 million by the end of the last fiscal year to March 20.
This was 260% higher from March 2019 as the deluge of new investors entered the market, IRNA reported, citing data published by the Securities and Exchange Organization.
The number of trading codes in March 2019 was 10.3 million. It was hardly 1.9 million a decade before in April 2011. The figures show that the number of investors in the stock market investors increased 19-fold over a decade.
This upsurge in a relatively short period was apparently due to the growing traction of the share market in light of its historic gains in the first half of fiscal 2020-21 (March-August, 2020).
In the period Iran’s stock market saw a tsunami of new investors unseen in the history of the domestic bourse.
The main index of Tehran Stock Exchange, TEDPIX, grew more than 300% in little more than four months -- from 500,000 points to 2.2 million points.
However, the heydays didn’t last long and the tide turned for the worse when share prices crashed and the bourse was exposed to unending heavy losses forcing investors of different stripes to flee and save whatever they could.
Observers say such an unusual number of investors, mostly those lacking financial acumen, is a bane for the market, arguing that such complex markets are the function of expertise and newcomers should abstain from direct investment in stocks letting investment funds and asset managers handle the task on their behalf.
Currently more than 80% of stock trade is undertaken directly by individual investors, according to Reza Kiani, a former deputy at the Tehran Stock Exchange for research and development.
“Investment funds account for 5% of stock trade. A stable market means a bigger role for investment funds not direct investment,” he said.
