Economy, Business And Markets

Benchmark Limps to Mixed Close at TSE

Benchmark Limps  to Mixed Close at TSEBenchmark Limps  to Mixed Close at TSE

While most of the listed firms at the Tehran Stock Exchange (TSE) had a downbeat performance, Persian Gulf Petrochemical Industry Company (PGPIC), with the highest market cap, lifted the TEDPIX to edge up briefly at Tuesday’s close.

More than 70 percent of the TSE’s listed companies settled in red, though the TSE’s benchmark notched up 6.7 points or 0.01 percent to end at 63,853.4.

According to TSE data, the first market index slipped 37.2 points or 0.08 percent to 47,337.6. The second market index rose 291.5 points or 0.24 percent to stand at 123,615.5. The free float index tumbled 281.1 points or 0.3 percent to settle at 72,696.8. The industry index ticked up 35.7 points or 0.07 percent to 53,434.3, and the blue-chip index was down 3.3 points or 0.12 percent to end at 2,851.

Skeptical investors are waiting for the lingering ambiguities at the equity market to vanish before they can gear up for a potential bull market, though trust deficit over the outcome of nuclear talks has curbed the investors’ enthusiasm to shore up their portfolios.

Lack of liquidity hung over the equity market, with the low trade volume and value at the TSE adding to both individual and institutional investors’ stress.

TSE data illustrates that sluggish trades persist, with almost 400 million shares changing hands, valued at close to 814 billion rials.

The banking sector fell short of maintaining its place among top performing industries and turned into a market laggard on Tuesday, with Saderat Bank becoming the most crucial laggard, despite recording the highest trade volume.

Iran Khodro and Mobile Telecommunication Company of Iran also weighed on the TEDPIX, as they following Saderat Bank with almost 35 and 16 points in negative contribution respectively.

The PGPIC with close to 102 points in positive contribution shifted the benchmark’s sentiment, pulling up the TEDPIX as most companies at the TSE weighed on the benchmark. Ghadir Investment Company and Tose’e Melli Investment Company also contributed positively to the TEDPIX.

  Refining Companies Comeback

More than a year since the refineries’ ticker symbols were closed, mostly due to lack of transparency in financial statements and feedstock pricing, the possiblity of the refining sector’s comeback to the equity market is around the corner.

Head of the Securities and Exchange Organization (SEO), Mohammad Fetanatfard, declared earlier this month that the Financial Stability Committee resolved the sector’s pressing issues, hinting that their return could be expected soon.

Three major oil refining companies released their production and sales report on Tuesday, which is considered as a concrete indicator of refining companies return to the equity market.

Massive loss of the giant sector’s investors and possible price correction has raised speculations on negative impact of listed companies in the sector on the benchmark.

The comeback by refining companies is expected to lead to lineups by investors willing to get rid of their shares, though market analysts predict that the benchmark retreat after the refining companies’ comeback is only temporary.

State-owned refining companies were officially informed about feedstock prices on Tuesday, which underscores their potential return to the equity market. Shiraz Oil Refining Company, Lavan Oil Refining Company, and Tehran Oil Refining Company have already released their production and sales report.  

With the fear-gripped investors and dramatic price changes highlighting the lack of stability at the equity market, the refining companies’ comeback is likely to help the market outperform in the mid run.