The Tehran Stock Exchange’s main index (TEDPIX) posted tiny gains in the week that ended January 28. Despite the unremitting retreat at the equity market within the past few months, with the benchmark tumbling almost 17.4 percent since the beginning of the year (March 21, 2-014) , the TEDPIX registered a 0.35 percent uptrend. However, part of the fragile uptrend was due to the block offerings at the end of trading hours.
Investors have embraced risk at a time when the stock market is limping, lining up for banking block offerings, which pushed the financial index to soar 3,790 points or 3.13 percent, to lead the gainers.
The TSE data illustrated that over the past week the overall index notched up 227 points or 0.35 percent to settle at 65,256.1. The first market index was up 178 points or 0.37 percent to 48,031.8. The second market index climbed 377 points or 0.29 percent to 128,600.3. The free float index rose 357 points or 0.49 percent to 73,883.1, the blue chip index edged up 14 points or 0.48 percent to 2,932.5, however, the industry index retreated 68 points or 0.12 percent to 54,782.8.
More than 1.8 million shares changed hands, valued at almost 3.5 billion rials, while the market is still slack due to the prevailing uncertainties regarding the performance of the stock market in the mid run. Despite the benchmark’s uptrend, the trade volume and value registered 16.7 and 9.9 percent decline respectively compared to the same period last week.
Just as the equity market is shrouded in ambiguity, which is mostly tied to the ongoing nuclear negotiations between Iran and the P5+1, most of the listed industries are still grappling with uncertainties.
Market analysts believe that the stock market normally mirrors economic volatilities. Hence, as long as the outlook of the economy remains uncertain, bears may keep reigning over the TSE.
Market Triggers
The equity market may respond to good news in the mid run, Mohammad Reza Khajeh Nasiri, exchanges and markets supervision director at the Securities and Exchange Organization told IRNA, adding: “However, recent positive news failed to change the TSE’s dented sentiment.”
Khajenasiri also said that systemic risks should be mitigated, but that any shift on the TSE’s trend depends on the market liquidity as well.
With regards to the huge amount of money flowing to the rival markets; Khaje Nasiri noted that daily trade value from a daily base of 5 trillion rials fell to almost 1.5 trillion rials.
The TSE’s sentiment is not bumpy. It is not on a smooth path either. Hence investors are wary that unfounded speculations may not trigger the equity market anymore.
The lingering recession plaguing the listed industries has heavily slashed expectations about the performance of firms at the TSE, with unsettled investors feeling shaky about shoring up their portfolios.
Even diversification may not guarantee persistent earnings as long as most of the industries keep posting downbeat performance.
Monthly Performance
Political and economic uncertainties along with lack of practical support amid the TSE’s persistent plunge, dragged down the overall index to record a 6 percent drop in the month that ended January 20, ISNA reported.
The massive retreat was accompanied by an unprecedented downtrend both in trade value and volume. During the 21 days of trade, trade value tumbled 27 percent in comparison with the same period last month. Moreover, trade volume reportedly witnessed a 22 percent decline.
The market’s uncertain direction dramatically shed the number of transactions at the TSE, and posted a 34 percent retreat to underscore the fragile atmosphere of the equity market.
Upcoming IPOs
Iran Fara Bourse or over-the-counter will witness 2 initial public offerings on February 10, IRNA reported.
The creation units of Ard Tejarat Company (ATC), which accounts for 99.99 percent of its shares, as well as Hafez Insurance Company (HIC)’s creation unit, which covers close to 10 percent of its shares, will be offered to potential customers.
The ATC’s block offering is priced at about 248 billion rials, and the HIC’s creation unit will be offered based on the intitial price of 19.2 billion rials.
ATC’s latest registered capital reportedly stands at 26.5 billion rials. The company belongs to Tejarat Bank, and its IPO will be launched via the bank’s brokerage. In addition, Hafez brokerage will put forward the HIC’s creation unit – which belongs to Sabig Group.
