Share market investors welcomed stocks of small-size companies in the last working week as majority of commodity stocks in giant listed companies stumbled.
The main index of Tehran Stock Exchange, TEDPIX, was barely able to stay above the flatline last week as most large caps were under selloff pressure. The market cap-weighted benchmark added 2,940 points or 0.2% throughout five trading sessions.
This is while the TSE’s equal-weighted index gained more than 2.4% in the week, showing rising demand for small caps.
Stock market observers link investor aversion to commodity stocks to the economic consequences of political developments that may impact export-based companies.
The market was buoyed up by optimism about the revival of the long-delayed Iran nuclear deal with world powers.
If a deal is struck, a broad range of domestic industries should start moving forward, namely food, banks, auto and investment companies.
However, a potential accord can impact most commodity stocks and export-oriented companies in the short-term because of its impact on forex rates because lower rates hurt their income.
Most commodity and export-based stocks faltered last week as the decline in currency rates undermined investor sentiment.
The US dollar was traded at its lowest in the past three month on Thursday and was worth 299,000 rials in Tehran’s unofficial market.
Following weeks of inactivity, retail investors in the bourse showed renewed interest emerging as key players in the market. Average daily trade by retail investors stood at 36.39 trillion rials ($117 million), up 44% higher on the week before.
Market observers see increase in trade as a positive sign for the bourse, noting that the struggling market should pick up with the return of retail investors.
