The fragile uptrend at the Tehran Stock Exchange (TSE) over the past 3 days of weekly trade ending March 4 fell short of wiping out losses incurred earlier this week, with the overall index retreating 37 points or 0.06 percent compare to the prior trading week, to settle at 64,014.9.
Prevailing ambiguities are still curbing skittish investors’ enthusiasm to pour their hot money or cash invested in other markets into the equity market. This is while most shares have hit their rock-bottom values.
According to TSE data, sloppy trades at the TSE saw half of the indices settle in red.
The first market index gained 81 points or 0.17 percent to end at 47,520.5. The second market index lost 785 points or 0.63 percent to 123,510.4. The free float index was up 272 points or 0.37 percent to stand at 73,272.3. The financial index surged 1,148 points or 0.92 percent due to banking sector’s outperform within the week to stand at 125,250.8. The industry index slipped 125 points or 0.23 percent to 53,518, and the blue-chip index ticked up 2 points or 0.08 percent to end at 2,867.3.
Despite the bearish atmosphere at the TSE, trade volume and value posted a brief surge, with almost 2.96 million shares changing hands, valued at close to 5.52 trillion rials to record a 10.6 and 2.7 percent rise in trade volume and value respectively.
The TSE’s gauge has been deeply in red since the beginning of the current year, which ends March 20, with the TEDPIX down 19 percent, to register a historic record low within the past 17 months.
The oil price free fall, lingering uncertainties surrounding western sanctions, and fears of a budget deficit have dramatically slashed the earnings of most of the listed companies at the TSE, though many market analysts believe that a nuclear accord between Iran and the P5+1 can effectively revive the equity market.
Nuclear Talks: TSE’s Achilles Heel
The lingering nuclear talks have always been the most significant contributing factor in the equity market’s performance. Skepticism over the outcome of the ongoing nuclear negotiations was accompanied by breathtaking ups and downs at the TSE within the past few years, however, the extension of nuclear talks in November 12, at a time when everyone was expecting some sort of an agreement, heavily weighed on both TSE and investors’ sentiment.
Now, investors prefer not to rely on speculations, waiting instead to invest in a more transparent market. The recent upbeat news about the nuclear talks fell short of enticing investors to shore up their portfolios with a range of shares in fundamental companies – the ones that are expected to boom once western sanctions are lifted.
The US Secretary of State John Kerry said recently that talks remained “tough and intense” but that the Obama administration would continue pursuing a framework deal by month’s end, CNN reported. “We believe that we are very close, very close,” Iranian Foreign Minister Javad Zarif told NBC News, adding that “there are details that need to be worked out.”
Moreover, Senate Republican leaders ditched plans Thursday to take up a bill next week that would have given Congress an up-or-down vote on any agreement international negotiators – led by the United States – make with Iran on its nuclear program, an aide to Senate Majority Leader Mitch McConnell told CNN.
The latest upbeat news may indicate that bulls might be on their way back to the equity market in a not too distant future; however, the unsettled investors may fail to seize the opportunity.
