Stocks underperformed for the third consecutive trading day on Monday at the Tehran Stock Exchange (TSE) with the benchmark wiping out its earlier gains, slipping to a new low within the past 7 trading days.
The TSE data illustrate that the overall index shed 329.9 points or 0.48 percent to lose grip on the 69,000 level.
The first market index lost 300.3 points or 0.59 percent to 50,338.9. The second market index edged down 278.3 points or 0.21 percent to stand at 135,216.7. The free float index tumbled 601 points or 0.75 percent to 79,198.5. The industry index was down 166 points or 0.3 percent to 55,900.6, and the blue-chip index shed 36.3 points or 1.12 percent to settle at 3,195.1.
More than 1.2 billion shares changed hands in a seesaw trading day, valued at almost 2.04 trillion rials. Both trade volume and value were relatively flat.
The banking sector’s shares once again topped the highest trade volume, though they settled in red. Bank Saderat came on top once again, with the highest volume of trade among all listed firms at the TSE. Pars Khodro, and Tejarat Bank followed next.
Most listed companies pushed the TEDPIX in red territory, with refining and petrochemicals weighing the most. Bandar Abbas Oil Refining Company with about 74 points was the worst market laggard by Monday close. Tamin Petroleum & Petrochemical Investment Company and Bank Mellat with close to 61 and 55 points took the second and third place respectively.
Esfahan Oil Refining Company with 110 points in positive contribution to the benchmark had a stellar trading day, as investors lined up to prop up their portfolios with its shares. Islamic Republic of Iran Shipping Lines, shrugging off the EU sanctions, which were re-imposed on April 8, outperformed and took the second place.
Despite speculations about a possible interest rate cut, which has always been a positive contributor to the equity market, unsettled investors still prefer to snap bargains in the short run, instead of taking long-run approaches in the equity market.
Banks in Iran are already grappling with non-performing loans and credit crunch. Regardless of positive signals from the speculation, banking sector shareholders are concerned about a possible dramatic cut in the banks’ dividends.
The economy hit by sanctions and global slowdown, coupled with uncertainties over a comprehensive nuclear deal between Iran and the P5+1, are stoking concern among investors, making it complicated for them to count on a prosperous economy in the mid run. Hence, investors are in a skittish mood, bouncing between selling off risk at the first hint of trouble and snapping up bargains when things calm down. The approach is likely to weigh on the TSE’s gauge, pushing the TEDPIX to keep retreating amid lingering ambiguities.
Stock Watchers Eye Dubai Names
As world powers move toward ending anti-Iran sanctions, bargain-hunting stock investors are circling, the business week reported. The primary focus for many of them, though, isn’t Iranian companies themselves, but rather multinationals that are located in nearby countries as well as those that have kept ties with the Islamic republic during sanctions. Their business, the thinking goes, would get a big lift from an opening up of the Middle East’s second-biggest economy. Negotiators are seeking to finalize a deal by June. The biggest beneficiaries could include banks and developers in Dubai and a Malaysian shipper that may see orders climb if Iran resumes global oil exports.
