The TEDPIX as the stock market’s main index climbed 0.2 percent and notched third straight win on Monday, after its declining trend in past six months.
According to the Tehran Stock Exchange website, main gauge of the economy ended its rally --which started at the very beginning of the trading day, with tepid gains to highlight the hidden potential of the equity market.
Like on Sunday, all of the market indices stood in green and helped the TEDPIX to continue its rally, which initiated from the first trading hour.
The TEDPIX ticked up as it rose 140.5 points or 0.2 percent to 71,685.8. The first market index was up by 128.7 points or 0.24 percent to 52,679.5. The second market index climbed 116.5 points or 0.08 percent to 141,835.5. The free floating index finished with tangible gains as it added 253.7 points or 0.32 percent to 80,711.2. The industry index jumped 81.6 points or 0.13 percent to 60,751.9, and the blue chip index edged up 9.2 points or 0.28 percent to be the last index help lift the TEDPIX.
As the market upward trend was fairly predictable, trading value and volume surged respectively. Close to 524 million shares changed hands, indicating a significant growth in transactions. Besides, the trading value soared to almost 1.5 trillion rials, which illustrates close to 100 percent increase.
Khouzestan steel company as the first producer of iron and steel in Iran topped the charts with most trades, as this company had the biggest contribution to the market’s upward trend by a 41 percent. Saderat Bank and Iran Khodro stood next as they helped to lift the TEDPIX by 34.46 and 12.72 percent growth in terms of trading value of their shares respectively.
As the prospect of the negotiations over the nuclear program between Iran and the P5+1 becomes clear and both sides strive to reach a comprehensive agreement, cautious investors are expecting positive results from the continuing meetings.
Most of the market analysts insist that the nuclear talks are the most crucial stimulator to the equity market. Due to the positive atmosphere over the attendance of President Rouhani in New York, the markets have been buoyant with the hopes of the president giving a keynote speech at the UN general assembly.
Declining prices are another contributing factor to the ongoing positive atmosphere which is currently influencing the equity market.
“Continuing cuts in commodity prices over the past 8 months coupled with clearance of credit transactions as well as positive news over the nuclear talks were the main stimulators for upward trend on the main gauge of the economy in the equity market, Mohammad Reza Khaje Nasiri, head of Tehran Bourse affairs told FNA.
Investors Cautious Approach
Shares at the TSE lost their nominal values and seeing spectacular gains, letting investors garner the popular stocks at rock-bottom price.
The recent decline put investors on the edge, as they became panicked making them sell their stocks. This group of people prefers to hedge their bets, and are more likely to invest outside of stocks and shares.
Many investors watching the market may jump to buy stocks immediately after a major move in the stock’s price, hoping to take advantage of the surge in the price.
Nevertheless, the downward trend over the past six month in the equity market caused the stocks to touch their rock-bottom value. The TSE’s new atmosphere is enticing some novice investors into the stock market as they can enjoy a safe haven; shoring up their portfolios, garnering the quality stocks.
“Following the government’s policy towards boosting the capital market, the liquidity in the capital market increased in past two months, while most of the stocks touched their rock-bottom values, which led to create an attractive stock market,” Khaje Nasiri told FNA.
To conclude, the government should manage the capital market so that the investors eye the equity market as the most profitable area for their investment.
