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Stocks Cap Largest Gain in 7 Months
Stocks Cap Largest Gain in 7 Months

Stocks Cap Largest Gain in 7 Months

Tehran Stock Exchange’s benchmark advanced over 1,000 points or 1.31% to 80,340.70 points, grabbing a fresh 6-1/2 month high
Shares on Iran Fara Bourse also rallied, driving the market’s index up 1.28% to an eight-month high of 839.23 points

Stocks Cap Largest Gain in 7 Months

Stocks rallied in Tehran on Saturday, and Tehran Stock Exchange capped its largest daily gain since March 12, on improving petrochemicals and metals prices.

A majority of market analysts remain pessimistic about the market's future though.

"I see no positive outlook for world markets, our economy and industries. The market's rally has no fundamental basis. I don't think it will last," Ali Khosroshahi, Omid Investment Bank's head of bond trading, told Financial Tribune.

Tehran Stock Exchange's benchmark advanced over 1,000 points or 1.31% to 80,340.70 points, grabbing a fresh 6-1/2 month high. National Iranian Copper Industries, Ghadir Investment Holding, Persian Gulf Petrochemical Industries Company, Parsian Oil and Gas Development Company and Gol-Gohar Mining and Industrial Company led the market's climb.

The Islamic Republic of Iran Shipping Lines, Iran's largest shipping company, was the biggest drag on the market. Its shares plummeted 7.94% to 4,500 rials after posting disappointing earnings results. The company was one of the main sanctioned bodies by Europe and the US, and it is struggling in the current global economic slowdown.

Earlier, IRISL Chairman Mohammad Saeidi told Reuters that he expects his company to have recuperated by the middle of next year the business lost while Iran was subject to nuclear sanctions.

"It seems like new money flowed into the market, and in such cases, institutional investors take advantage of market conditions and offer shares. Smalltime investors, battered by sluggish market conditions, try to ride the wave," said a veteran trader on condition of anonymity.

Shares on Iran Fara Bourse also rose, driving the market's index up 1.28% to an eight-month high of 839.23 points. The rise of petrochemical producers, which make up half the market, pushed IFB's benchmark higher. Maroun, Zagros and Khorasan petrochemical companies took the largest gains, followed by Shiraz Refinery.

Trade volume shot up on IFB. Over 1.37 trillion rials worth of shares changed hands in IFB, ten times the previous trading day on Wednesday. Trading volume on TSE was only slightly higher than on prior days.

> Fishy Trading

Another bank executive was much more pessimistic, saying the market is being propped up because of the upcoming 50th anniversary of TSE's founding. This executive did not wish to be identified either.

TSE was launched on February 4, 1968. Tehran's exchanges have been criticized for alleged rigging of the index.

A group of non-institutional investors wrote a letter to the head of Iran's market regulator earlier this month, objecting to rules that are allegedly benefiting large institutions in primary offerings.

The letter, addressed to Shapour Mohammadi, the head of Securities and Exchange Organization, leveled allegations of insider trading and favoritism, especially in primary securities offerings and at brokerages and exchanges.

The investors also criticized increasing failures in market trading platforms since Mohammadi took office and questioned the reasoning behind them, alleging that these are part of a larger scheme to defraud small investors.

Trading started late on Saturday due to system failures.

> Other Markets

The dollar edged lower from its 10-month high reached on Thursday to 36,160 rials per greenback, despite its slip against most currency majors, excluding sterling and the Swiss franc in international markets on Friday.

The euro also gained 0.5% to 39,820 rials, following the European currency's 0.8% rise against the dollar in international markets on Friday. The euro's official exchange rate against the rial was also strengthened by the Central Bank of Iran by 0.77% to 34,881 rials on Saturday.

The Imami gold coin, benchmark of gold trading, rose 0.38% to 11,108,000 rials in Tehran on the back of a 0.56% gain to $1,275.4 an ounce in international markets.

Imami futures for Dec. delivery fell 40,000 rials to 11,075,000 rials on the Iran Mercantile Exchange on Saturday.

 

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