Stocks massively underperformed at Tehran Stock Exchange on Saturday trade, dragging down the overall index to keep wiping out the gains it made earlier this year (started March 21) after a preliminary framework nuclear deal was reached between Iran and the P5+1 on April 2.
More than 76 percent of listed companies at the TSE settled in red and dragged down the TEDPIX to plummet 0.83 percent, stoking concern among investors amid the ongoing gloomy atmosphere of the equity market.
Saturday rout was driven by losses piled up in banking sector, which dramatically underperformed to reverse back to its previously record lows.
According to TSE data, the benchmark tumbled 544.9 points or 0.83 percent to stand at 65,089.2, and to add on investors stress. The first market index dropped 480.1 points or 1 percent to 47,413.2. The second market index was down 575.5 points or 0.44 percent to 131,472.5. The free float index slumped 757.7 points or 1 percent to 75,071. The industry index shed 329.3 points or 0.61 percent to settle at 53,403.7, and the blue-chip index tumbled 33.4 points or 1.1 percent to 2,991.8.
Bearish sentiment at the TSE once again spooked investors and drastically pulled down trade volume and value, with more than 373 million shares changing hands, valued at around 662 billion rials.
A few companies managed to slightly push the TEDPIX in green, however, the majority of the listed firms heavily weighed on the benchmark, with Bank Mellat leading the laggards. Mapna Group and Saderat Bank with almost 45 and 41 points stood after Bank Mellat, and took the second and third place respectively.
IFB Benchmark Settles in Red
More than 167 million shares changed hands in Iran Fara Bourse at Sunday’s close, valued at more than 983 billion rials, with the IFB’s gauge (IFX) notching down 2.48 points or 0.33 percent to 738.31, IFB public relations reported.
Iranian Investment Petrochemical Group (IIPG), with more than 19.2 million shares, valued at about 61.72 trillion rials registered the highest trade volume and value among other listed firms at the IFB.
Shiraz Oil Refining Company (SORC), Asia Zarin Amadan Company, and Saman Insurance Company lured investors, and recorded the highest surge in their shares’ value.
The report also noted that the IIPG, along with Tehran Oil Refining Company and SORC left the most positive impact on the IFX.
Market Laggards
Insider trading, obscure financial information, favoritism on the part of the brokers, escalating tensions in the region and enduring western sanctions against Iran over its nuclear energy program – as the most crucial factor – drastically keep weighing on the TSE’s benchmark.
The Money and Credit Council recently lowered the cap on banking deposit interest rates by two percent to 20 percent, which will be binding for all commercial banks as of May 3. The move was aimed at alleviating inflation and credit crunch, reviving lending businesses, and making the equity market looks more attractive, though not at a time when bears are reigning over the stock market.
The shaky atmosphere of the TSE has led to investors shrugging off the MCC’s latest move, which underscores that, the TSE’s predicaments – western sanctions on top of all – need to be addressed first.
Despite lingering ambiguities, some market analysts believe that there are a variety of both small and big cap stocks that have the capacity to outperform even if Iran and the P5+1 fail to clinch a nuclear accord due by the end of June.
