Economy, Business And Markets

TSE Benchmark Stages Small Rally

TSE Benchmark Stages Small RallyTSE Benchmark Stages Small Rally

Stocks rally at the week’s last trading day forced the overall index to recoup a small part of the recent massive losses at the Tehran Stock Exchange (TSE), with most of indices settling in green.

After days of fragile performance by the TEDPIX, which was due to block offerings at the equity market, most of the listed companies at the TSE positively contributed to the benchmark.

According to the Financial Tribune analysis, nearly 59 percent of the listed firms posted small gains, 34 percent weighed on the TEDPIX, and 7 percent waxed and waned.

The TSE data illustrate that the TEDPIX gained 128.4 points or 0.2 percent to hover around the 65,000-point mark at Wednesday’s close. The first market index was up 102 points or 0.21 percent to end at 48,031.8. The second market index went up 203.3 points or 0.16 percent to 128,600.3, the blue chip index had a flat trading day, and the industry index, as the only laggard, edged down 11.4 points or 0.02 percent to finish at 54,782.8.

As the TSE witnessed investors lining up to garner devalued banking shares, trade volume and value surged in comparison with the prior trading day. More than 537 million shares changed hands, valued at almost 893 billion rials, which indicate close to 67 and 20 percent surge for trade volume and value respectively.

Saderat Bank with a Price Earnings ratio of 2.7 topped the volume of trade on Wednesday. Iran Khodro and Mobarakeh Steel Company (MSC) took the second and third place respectively. Regarding the trade value, Iran Khodro took the first place. National Iranian Copper Industries Company (NICIC) and Saderat Bank stood next after Iran Khodro.

Mapna Group had the most contribution to the TEDPIX uptrend with almost 35 points. Saderat Bank and Tejarat Bank also outperformed and pushed up the benchmark with 33, and 23 points respectively.

The NICIC was the biggest loser, with more than 63 points negative contribution to the TEDPIX. The MSC and Omid Investment Company were other major market laggards at TSE’s Wednesday’s trade.

Despite recent upbeat news about the economic growth, feedstock prices and speculations about a probable decline in mining royalties, the equity market continues to bear the brunt of the dented sentiment amid gloomy outlook of the economy. However, creation units and small triggers managed to push the benchmark to hover around the 65,000-points resistant level.

Many investors used to place order at the equity market based on technical and fundamental analysis, however the recent dramatic nosedive at the TSE has come as quite a surprise. With this in mind, past record is not a guide to future performance; although precaution is crucial for any investor in the market. Iran’s economy is not stable now, but it should be noted that the stock market has a special ability to draw investors’ attention since it is relatively large and liquid, and could be an interesting part of a frontier fund for listed industries.

Market analysts believe that leading companies at the TSE have always provided investors with a good opportunity to experience guaranteed earnings, however, the recent fluctuations in oil prices, and other indicators have slashed expectations about high yielding companies. In a volatile market, these companies have the potential to sneak up seemingly out of nowhere and bite the stock market. However, performance of some small-scale companies with no correlation with the tumbling oil prices may be spectacular even in time of stress.