Economy, Business And Markets

Investor Bias Hurts TEDPIX

Investor Bias Hurts TEDPIXInvestor Bias Hurts TEDPIX

Indices lost steam once again at the Tehran Stock Exchange (TSE) amid massive selloffs by investors, particularly institutional investors, which kept dragging down the benchmark.

Stocks selloffs intensified as the pivotal role of market makers is missing in the equity market in the absence of regular trading approach.

The equity market is increasingly becoming wobbly, thanks to the unsettled investors’ emotional bias, with the TEDPIX plunging more than 4.7 percent within six consecutive trading days.

 Reza Emami, a market analyst believes that launching Initial Public Offerings soon after the preliminary framework nuclear deal between Iran and the P5+1, drained the equity market’s liquidity. “Stocks were mostly slumping within the past 15 months, however, with the elimination of the most crucial systemic risk the benchmark’s sentiment could shift.” He further referred to mismanagement, overreactions as well as market jitters as key laggards.

Investors are highly recommended to observe diversification while shoring up their portfolios. Irrespective of full analysis of listed firms, regional developments and local and global economic prospects may inflict huge losses on individual investors. Recently, traders have tended to hedge or speculate on short-run price movements in the heavily traded shares in a bid to hunt bargains; however data disclosure and lack of transparency may endanger this type of investors.

Panicked investors are getting rid of shares amid mixed ambiguities at the equity market, while international investors are circling around Iran equity market – an untapped stock market to foreigners. Irrespective of TSE’s dented sentiment, most stocks are being traded below their intrinsic values, which entices international fund managers to pump cash into such a lucrative market.

  TEDPIX Slides Mostly on PGPIC

The Persian Gulf Petrochemical Industry Company with the highest market capital at the TSE underperformed at Saturday close, and dramatically pushed down the overall index within the past 11 trading days.

According to TSE data, the TEDPIX lost ground and pulled back 704.8 points or 1.04 percent to end at 67,374. The first market index dropped 449.1 points or 0.9 percent to 49,393.9. The second market index plunged 1,838.4 points or 1.35 percent to settle at 134,057.6. The free float index tumbled 737.1 points or 0.94 percent to 78,050.5. The industry index was down 477.8 points or 0.86 percent to 55,208, and the blue-chip index also retreated 35.2 or 1.11 percent to 3,131.

More than 1.3 trillion shares changed hands at the TSE to underscore that stocks have hit their rock-bottom value again, and could be a good bargain. The high trade volume also boosted the traded value at the TSE, which settled at almost 2.09 trillion rials ($62.8 million). The highest trade volume among listed sectors was recorded for the auto industry.

The PGPIC with close to 157 points topped underperformers. Bandar Abbas Oil refining Company and Telecommunication Company of Iran with around 69 and 65 points took the second and third place respectively.

Among the few positive contributors, Mobarakeh Steel Company and Esfahan Oil Refining Company with close to 57 and 22 points topped the list of positive contributors.