Stocks’ early rally helped the overall index to snap 2 days of losing at the Tehran Stock Exchange (TSE) at Saturday’s close, after positive speculations on lingering nuclear talks triggered investors to shore up their portfolios.
In the latest development regarding the ongoing nuclear talks between Iran and the P5+1 group, comprising the United States, the UK, France, China, Russia and Germany, head of Atomic Energy Organization of Iran (AEOI), Ali Akbar Salehi has joined the negotiations. This is the first time that the AEOI head is taking part in the nuclear talks with the P5+1, which raises speculations a final deal is within reach.
According to the TSE data, about 50 percent of the listed companies outperformed and the TSE’s gauge pulled higher 147.1 points or 0.23 percent to settle at 64,867.1, wiping out almost half of the losses incurred over the past trading week, which ended February 20.
The first market index rose 158.2 points or 0.33 percent to 48,077.9. The second market index, as the only laggard slipped 37.6 points or 0.03 percent to stand at 125,651.4. The free float index gained 166.4 points or 0.22 percent to end at 74,136.8. The industry index also ticked up 24.1 points or 0.04 percent to 54,315.1, and the blue chip index edged up 6.4 points or 0.22 percent to finish at 2,902.5.
TSE recorded a fresh rally and was on rebound at Saturday’s close; however the mood remained fragile, with lingering ambiguities squeezing out all listed companies.
More than 596 million shares changed hands during Saturday’s rally, valued at close to 878 billion rials, though both trade volume and value diminished compared to previous trading days.
The equity market is still grappling with prevailing uncertainties that keep dragging down the benchmark, and now only companies that heavily weigh on the TSE’s gauge can shift the stock market’s sentiment.
Saturday trading saw lucrative trades on telecommunication industry, as well as financial groups. The TSE data illustrated that Telecommunication Company of Iran with 75.61 points, topped positive contributors. Saderat Bank and Mobile Telecommunication Company of Iran took the second and third place respectively.
Tamin Petroleum & Petrochemical Investment Company (TPPIC) was the leading laggard to hinder the TEDPIX uptrend. Parsian Oil and Gas Development Company, and Mobarakeh Steel Company came after the TPPIC.
Reduced Profitability
A quick look at the performance of most listed companies at the TSE over the past few months shows that enthusiasm has faded to some extent. Some firms have retreated more than others, while expectations on earnings of other companies have been dramatically trimmed.
The TSE has been witnessing massive retreats since Iran and the P5+1 failed to clinch a final accord, and extended nuclear talks in late November, which was accompanied by breathtaking selloffs for most of the listed firms.
As market analysts indicate, investors should avoid garnering devaluated shares. They also caution investors against buying the shares of popular companies with weak stocks.
Unprecedented fluctuations at the equity market have pushed investors to change their long-run approach to short-run, in a bid to enjoy daily price swings.
Political and economic indicators stoke concern among investors, as most of them are in a skittish mood, bouncing between selling off at the first hint of trouble and snapping up bargains when things calm down.
Many investors have already lost faith in formerly high-yielding companies that have registered dismal performance over the past 5 months. They move from adviser to adviser, from stock to stock, from fund to fund, often without realizing what they are doing, making major changes in their asset allocation based on flimsy information and emotional reactions.
Veteran market analysts advise investors to observe diversification in their portfolios, while insisting on fundamental analysis for companies prior to any trade. Moreover, due to the massive evaporation of gains, and historic low Price Earnings (P/E) ratio, it is likely to see a persistent bullish trend once Iran and the P5+1 sign a comprehensive nuclear agreement.
