The uptrend in the Tehran Stock Exchange remained intact for a week, a crucial factor that will convince more individual investors to shore up their portfolios in the equity market and lift the TEDPIX into green.
The TSE recorded an upward trend for market's main indices for a consecutive week, which ended Sep 24, after the TEDPIX approached 72,000 and finished the last trading day on Wednesday at 71,888.1.
Based on the TSE website, all the market indices contributed to the overall market potential benchmark uptrend as the TEDPIX was up in all trading days in the week.
The first market index rose 51.2 points or 0.1 percent to 52,729.5. The second market index ticked up 84.9 points 0.06 percent to 142,197.9. The free floating index was up by 218.5 points or 0.27 percent and closed at 80,999.6. The industry index climbed 54 points or 0.09 percent to 60,861.7, and the blue chip index edged up 3.1 points or 0.09 percent to 3,305.4.
The report says, 344,419,216 shares changed hands, valued at almost 990 billion rials, indicating close to 50 percent increase compared Tuesday.
In the last trading day of the week, Pasargad Bank was on the top of the list of most profitable trades, as this company pushed up the TEDPIX by 12.14 percent. After this company, Parsian Oil and Gas Development Company and Shazand Petrochemical Company placed next to Pasargad Bank at top of the list leaving 11.68 and 10.25 percent positive impact to the TSE's main gauge.
After six months of unprecedented slump in the stock market with close to a 9.3 percent plunge --which has been one of the largest drops within six months in the TSE, the market rebounded to encourage unsettled investors to flock to the TSE.
The capital market continues to be hit by the financial crisis, which is apparent in a variety of industries. There is no real surefire way to avoid a difficult situation in the capital market except for pouring money into the equity market, along with a surge in overseas cash to the local industries.
Renewed Optimism
Investors are turning their attention back to the stock exchange as optimism increases over the prospect of a deal in the nuclear talks between Iran and the P5+1.
The trading mood at the TSE is no longer fragile as the economic situation of listed companies in the equity market for the Q3 and Q4 is likely to be positive.
As a matter of fact, most of the popular stocks are currently at rock-bottom prices because of devaluation in the exchanges, suggesting now is the best time to shore up portfolios, although in order to diminish the risk of trading, diversification should be observed.
The economic situation unlike the past few years continues to improve, as the core economic policy of the Rouhani administration has sought to tackle the illiquidity challenges of the market.
As the market is rebounding, investors are more interested in data analysis. Market data is a key to sound trade specifically when it comes to the stock exchange. In the equity market, the first task in analyzing a stock is to understand the company behind it. Its products, services, customers, advantages and competitors are crucial for investing in its shares. With better understanding of potential investment, the investors would make wiser choices.
The three factors of earnings per share in the latest quarter, earnings growth as it should be accelerating, as well as annual earnings at least for the last three years, should be precisely examined.
The economy is on the path of recovery to step out of the recession and the inflation rate is gradually falling. A potential cut in the banking interest rate may take effect in the next few months. These are all positive contributors to the TSE that are slowly weighing on the market's trend.
The bottom line is that despite the market slump, the equity market was desperately waiting for a drastic change to shift its trend. The nuclear talks seem to play a significant role contributing to the market's positive trend, although it should be noted that the country is capable itself of adapting shrewd and foresightful policies to change the market trend away from external contributors.
