Business And Markets

TEDPIX Notches Up to 72,000

TEDPIX Notches  Up to 72,000
TEDPIX Notches  Up to 72,000

The Tehran Stock Exchange’s main index (TEDPIX) set a record within the past 43 days and gained 38 points or 0.05 percent to close at 72,044.6, promising glorious trading days in the upcoming months.

Equity market stocks shed previous losses, making investors keep up their hopes that the TSE would repeat its stellar trading days of 2013.

Battered stocks were struggling with unprecedented ups and downs below 72,000, though they eventually managed to push the TEDPIX just over the 72,000 mark.

The first market index briefly ticked up 52.1 points or 0.1 percent to 52,986.7. The second market index failed to contribute to the TSE’ uptrend and fell 79.3 points or 0.06 percent to 142,080.7. The free floating index was up 53.1 points or 0.07 percent to 81,261.9, and the industry index edged up by 38.9 points or 0.06 percent to finish at 61,096.9.

It should be noted that the TSE is still grappling with its major challenges as a result of a lingering recession and the ongoing illiquidity reining over the stocks. The low volume of trades clearly indicates a shaky atmosphere in the equity market, where risk averse investors are failing to engage in trading at the TSE due to prior bad experiences.

More than 368 million shares changed hands on Saturday, valued at 1.18 trillion rials, demonstrating slight decrease compared to Wednesday.

Tuka Transportation Company had the highest growth of 9.72 percent among other shares. Iran Khodro had the highest volume of trades, which contributed to the TEDPIX’s uplift with a 14.89 percent.

MAPNA Group was the largest contributor to the TEDPIX positive trend with a 52.3 percent as investors lined up to buy its shares. The Islamic Republic of Iran Shipping Line Group (IRISL) stood next with a 46.14 percent. Tamin Petroleum and Petrochemical Investment Company was the TSE’s laggard as it pushed down the bourse by 64.59 percent.

Due to the ongoing stagflation in the economy, the TSE dropped more than 9.2 percent over the past six months; this is while the trend slowed down in the past 3 weeks.

Currently, investors are weighing the pros and cons of companies at the TSE in order to garner profitable shares into their portfolios, although the seesaw sessions during the past 4 weeks illustrated the cloudy atmosphere at the TSE.

Although stocks are beginning to bounce back after their severe losses, the administration will continue to support the industries by providing their required cash flows. Besides, reconsidering part of the stock market regulations has been urged by analysts.

It is an undeniable fact that Iran is one of Asia’s largest and potentially most lucrative future markets and with the dissolution of sanctions likely in the coming year, foreign investors will be flocking to the capital.

 Another Contributor

If anything is going to spook investors, it will likely be the mounting concerns over the equity market downtrend, which has dampened the prospect of exchanges. Meanwhile the outcome of the nuclear negotiations between Iran and the P5+1 is another significant contributor to the unsettled investor’s approach, market analysts believe.

The stock’s value has hit the rock-bottom, and as some analysts recommend, this is the best time to shore up portfolios, while the opponents warn that if Iran and the P5+1 fail to reach a comprehensive agreement, the stock prices will fall further.

The Price Earnings ratio (P/E) recently touched a historical low, which is normally considered a brilliant chance to buy shares, although in other countries this ratio is very high and yet investors still flock to buy shares as they are dividend-rich.

The bottom line is that the turbulences of the capital market are associated with different factors including the Western sanctions, global slump, administration economic policy and physiological behavior of the investors. The administration has initiated practical moves to help the country step out of the recession by supporting various industries. Nuclear negotiations are on track, slowly creeping towards a comprehensive agreement, and finally, the uncertainty over the prospect of the equity market is clearing out, which is promising upbeat economic news in the near future.