Economy, Business And Markets

Gold, Housing Most Profitable in 2004-14

Gold, Housing Most Profitable in 2004-14Gold, Housing Most Profitable in 2004-14

Those who invested in gold and housing markets in the past decade have made tenfold profit from their investment, while those involved in foreign exchange and stock markets have respectively made threefold and sevenfold profit, a stock exchange analyst says, citing a new study.

Commodities, gold, housing, foreign exchange, equities and banking market are major sectors for investment, Amir Hossein Esameelpour, a market analyst said, addressing a conference in Isfahan focusing on investment in the equity market.

The gold coin market in Iran has two sides, as it is influenced by changes in both foreign exchange rates and gold prices, ISNA quoted him as saying. In 2004, US dollar exchange rate stood at 8,700 rial and in March-April 2014, the figure fluctuated between 31,000 rials to 35,000 rials per dollar, he explained. “In other words, in the past decade, the US dollar market has registered a triple profit.”

Housing market is one of the oldest and most attractive investment destinations for Iranians. Survey results indicate that the housing prices have grown almost tenfold from 2004 to 2014.

In the meantime, the Tehran Stock Exchange’s index has risen from 11,000-pint mark in 2004 to seven times more at 70,000-point mark in 2014. The US dollar exchange rate, as Esmaeelpour puts it, has significant impact on the TSE’s index. Any rise in US dollar value positively affects service fees of the listed companies and pushes up their profit. As listed companies at the TSE are export-oriented, their pricing trends follow the global suit. In addition, since mining and petrochemical companies are the major drivers of the TSE, any changes in the US dollar exchange rate significantly affect their prices and accordingly the TSE.

Meanwhile, he said, hope and positive expectations can help the equity market grow. For instance, depreciation of the dollar in late 2013 was due to the interim nuclear deal reached between Iran and six world powers. But when hopes that Iran could have access to its frozen assets overseas faded away, the TSE index plunged, the analyst said.

However, he added, the index is said to be more sensitive to the changes of the dollar value.

On possible impacts of oil revenues on the TSE, he noted that the index grew to its record highs during former president Mahmoud Ahmadinezhad’s term, when oil sales reached record highs as well. When the government has sufficient resources to inject money to the economy, the TSE index will grow faster, he added.

The development budget is another factor that can help the TSE’s overall index rise, as it defines the infrastructure status to which the TSE reacts.

Today, the TSE is facing two major challenges, according to Esmaeelpour; the first is the impact of the ongoing nuclear talks on the market and the second is the plunging global prices of metals to oil products to auto industries.