Economy, Business And Markets

TEDPIX Down on Lack of Liquidity

TEDPIX Down on Lack of Liquidity
TEDPIX Down on Lack of Liquidity

All indices at the equity market dragged down the Tehran Stock Exchange (TSE)’s overall index, amid liquidity scarcity, with the TEDPIX slipping 103.8 points or 0.16 percent at Saturdays’ close to retreat to the red territory.

Lingering ambiguities, investors’ skittish mood, and public offering of investment units of SEPAS Exchange Traded Fund (ETF) with almost 30 percent guaranteed interest rate at its maturity by April 19, 2016, trimmed the earlier gains and weighed on the benchmark.

Toxic debts on commercial banks’ balance sheets are on the rise despite efforts to contain them. Non-performing loans (NPLs) have risen 2.5 times since the creation of Settlement of Overdue Loans Company (SOLC). SOLC was established in 2008 in a bid to tackle the increasing amount of NPLs and the related issues. In addition, enthusiasm to collect shares even below their nominal values has been curbed.

Adding to market stressors is the unexpected gold price drop to its 3-month low, which may trigger investors to take their money to gold market in a bid to recover their heavy losses.

The TSE’s Saturday data illustrated that all indices lost ground and, with second market index leading the losses.

The first market index tumbled 103.8 points or 0.16 percent to settle at 63,911.1. The second market index dropped 384.5 points or 0.31 percent to stand at 47,471.4. The free float index shed 188 points or 0.26 percent to end at 73,084.3. The industry index extended its retreat and was down 82.7 points or 0.15 percent to 53,436.1, and the blue-chip index also edged down 8.8 points or 0.31 percent to finish at 2,858.5.

Most of the listed firms recorded a downbeat performance in a sloppy trading day, with almost 496 million shares changing hands, valued at close to 1.27 trillion rials.

Mapna Group topped the list of companies with the highest positive contribution to the TEDPIX. Mellat Bank and Islamic Republic of Iran Shipping Lines with almost 34 and 25 points took the second and third place respectively. The Persian Gulf Petrochemical Industry Company once again dragged down the benchmark with close to 60 points negative contribution. Ghadir Investment Company and Tejarat Bank with nearly 32 and 26 points downbeat performance followed suit to drag down the benchmark.

Other leading companies like the Mobile Telecommunication Company and Mobarakeh Steel Company, with high market caps were also among the laggards. Bears are still reigning over the equity market with the most crucial contributing factor to the listed companies’ performance being the ongoing negotiations with the P5+1 group (the United States, Britain, France, Russia, China and Germany) over Iran’s nuclear energy program.