Business And Markets

TEDPIX Up for 2nd Straight Session

TEDPIX Up for 2nd Straight Session
TEDPIX Up for 2nd Straight Session

Tehran stocks rallied on Tuesday, posting another daily gain with TSE benchmark rising 0.16% to 71,930.8.

Major indices posted modest gains on Tuesday, pushing the TSE main index (TEDPIX) up 115.6 points to end second straight upward trading day on Tuesday.

According to the TSE website, the first market index climbed 95.3 points or 0.18 percent to 52,942.1. The second market index was up 165.1 points or 0.12 percent to 141,811.1. The free floating index edged up 84 points or 0.1 percent to 81,081.8. Industry index gained 118.3 points or 0.19 percent to 60,903.7, and the blue chip index inched up 5.7 points or 0.17 percent to 3,322.

The volume of shares changing hands in the TSE was modestly higher than Monday as it reached 425,013,508 shares valued at 1.6 trillion rials, almost doubled in total value.

After recording weak numbers within last 30 days, the equity market seems to be nearing a turning point, market analysts believe. However, TSE's path to stability might be a long way as the market anxiously waits for the international anti-Iran sanctions to be lifted if the ongoing nuclear negotiations result in a final agreement between Tehran and the P5+1 group of major world powers.

On Sunday, officials from the Securities and Exchange Organization discussed the capital market recovery plan with officials from the Ministry of Economic Affairs and Finance. The move can substantially change the market's bearish trend or at least stop further slump in its value.

On the other hand, investors are waiting for the companies' reports, which weigh on the cautious investors' approach and subsequently on the market trend in the near future.

Among other contributors that left a positive impact on the market were the announcement of an international coalition against the advances of terrorist group IS in Iraq as well as the recent reports of economic recovery.

Iran's foreign minister Mohammad Javad Zarif has also expressed hope that Iran could reach a 'comprehensive agreement' with the P5+1 within the timetable mentioned in the Geneva interim deal. 

Iranian negotiators held 'useful' talks with Americans last week, deputy foreign minister Abbas Araqchi stated.  The two sides, however, need to bridge the differences that remain. The Joint Plan of Action has been extended until November 24. 

Equity Market Investors

Market analysts believe that individual investors feel unsafe by market jitters, while some of them do not precisely realize the real jitters as they don't care about long term investments.

Market jitters can be caused by poor corporate earnings, high rates of unemployment or uncertainty about the banking policies on interest rates among other things. Besides, lack of transparency is a major impediment to the frontier market investors. 

Many investors bypass the step of finding trust. They move from adviser to adviser, from stock to stock, from fund to fund. Often, without realizing what they are doing, they make major changes in their asset allocation based on flimsy information and emotional reactions.

Even though this behavior is counterproductive to long-term investment results, the market's speculators may encourage such investment. 

Many people place their trust in publications like newspapers, veteran investors, while their trust may be misplaced in a twinkle of an eye as they don't analyze the companies listed in the TSE in details.

Following the harsh and fluctuating conditions in the market in the past 2 years, individual investors seem to be more interested in quick return investments, something which is often emphasized in the equity market.

Many people may don’t have a clue about the fact many of the articles they rely upon were spawned in the public relations departments of mutual fund companies, brokerage houses or other investment product firms.

This behavior may change with courses for investors as well as the market transparency.

Considering the government's successful moves to curb inflation and stimulate the economic recovery, the TSE analysts hope to see a dramatic shift of the market trend in the next few months.