Economy, Business And Markets

New Equity Indices Unveiled

New Equity Indices Unveiled New Equity Indices Unveiled

Three new indices were unveiled at the equity market by the Securities and Exchange Organization (SEO) on Monday to give investors and portfolio managers access to more transparent information, SENA reported.

Speaking at a meeting on capital markets, attended by Minister of Economic Affairs and Finance, Ali Tayebnia as well as parliament members and high ranking economic officials, head of SEO, Mohammad Fetanatfard said market analysts had been asking for other indices in addition to the Tehran Stock Exchange (TSE)'s dividend and price index (TEDPIX), to enable them carry out precise financial analyses.

"The 'price index' used to be calculated before 2008, however the use of the index came to a halt due to technical issues and the current benchmark, which is based on dividend and price, was picked up as the TSE's gauge," Fetanatfard said.

The newly unveiled indices cover various indicators which are expected to increase the equity market’s transparency. The first of the new indices is based on price and weight, while the second index is calculated based on price and dividend, giving equal weights to the companies.

The third index is based on the value of the listed companies, said CEO of Noor-e-Anvar Financial Holding, Hossein Khezli Kharrazi in an interview with the Financial Tribune.

Fetanatfard also announced that according to the latest forecasts, most firms are expected to record higher earnings in the upcoming year, which starts on March 20, compared to the current year, noting that: “The overall earnings by all listed companies in the upcoming year is expected to reach 560 trillion rials ($163 billion), which surpasses the current year’s earnings of 520 trillion rials ($152 billion).”

TSE registered 8 percent growth in earnings compared to the previous trading year, in spite of the global decline in metal and iron ore prices as well as the oil prices freefalling in the global markets, said Fetanatfard, noting that Iran’s equity market is tied closely with the global market.

“So far, 178 companies have officially announced their expected earnings for the upcoming year, of which 106 companies have recorded positive adjustments, while 71 companies have registered negative adjustments,” SENA quoted Fetanatfard.

 Funding Projects via Equity Market

Minister of Economic Affairs and Finance, Ali Tayebnia said on Monday the equity market’s share in funding the projects is set to increase to 70 percent from its current 30 percent, observing that so far, the majority of financial resources have been provided by the banks.

Tayebnia also underlined the need for educating the investors and increasing their knowledge of the financial markets in order to help the equity market get back on track.

 Consistent Economic Growth

Prudent economic policies adopted by the parliament and the government is key to sustainable economic growth.  In the case of feedstock pricing, it was observed that sudden price swings were the main obstacle in the way of attracting foreign direct investments.

“Iran has had nine consecutive months of positive economic growth since the beginning of the year, which ends on March 20,” said Tayebnia, expressing hope that the country will continue to experience growth, SENA reported.

Commenting on the importance of transparency in the equity market, Tayebnia noted that the government should not interfere with price discovering in both the TSE and the Iran Mercantile Exchange (IME), saying: “Supply and demand is expected to boost trade, and bring competitiveness back to the stock market.”