Economy, Business And Markets

TSE Stocks Continue to Underperform

TSE Stocks Continue to UnderperformTSE Stocks Continue to Underperform

Stocks in Tehran Stock Exchange staged yet another rout at Wednesday’s close, with oil refining companies, petrochemicals, and minerals pulling down the TSE’s overall index to stay in red for the fourth consecutive trading day.

Oil is extending its gains above $60 a barrel, boosting the outlook for inflation, and performance of part of the listed companies at the TSE; however, it may trigger the alarm for petrochemicals, amid expectations about a probable retreat in projected earnings.

Bandar Abbas Oil Refining Company, which has recorded seesaw trading days within the past couple of weeks, with almost 58 points topped market laggards. Persian Gulf Petrochemical Industry Company, with the highest market cap at the equity market, along with Esfahan Oil Refining Company took the second and third place respectively.

The TSE data illustrated that the benchmark piled up more losses, and notched down 99 points or 0.15 percent to settle at 64,069.1. The first market index slumped 137.3 points or 0.29 percent to end at 46,431.8. The second market index slightly rebounded and pulled up 211.9 points or 0.16 percent to 130,916.9. The free float index eked 187.5 points or 0.25 percent to 73,572.3. The industry index was down 89.6 points or 0.17 percent to stand at 52,468.7, and the blue chip index edged down 7.3 points or 0.25 percent to finish week’s last trading day at 2,939.8.

TSE registered an almost flat trade volume and value, with almost 546 million shares changing hands, valued at close to 1.8 trillion rials.

Informatics Services Corporation with 70.55 points in positive contribution to the TEDPIX outperformed at the equity market. Mobin Petrochemical Company is still popular with the investors, as they lined up again to garner its newly debuted shares. The MPC and Tamin Petroleum & Petrochemical Investment Company with close to 40 and 37 points followed the ISC, and took the second and third place respectively.

 Preparing for Flood of Foreign Investors

“We have worked intensely on the exchange infrastructure during the past four or five years,” the Financial Times quoted deputy head of supervision of financial institutions at the Securities and Exchange Organization Ali Saeedi as saying. “Sanctions gave us time to prepare for the day a nuclear deal is signed,” he added.

Since a framework nuclear deal was signed between Iran and the West in Switzerland on April 2, the number of foreign investors requesting meetings with Iranian entrepreneurs has jumped, according to businessmen.

“One of the biggest asset managers in the US had a meeting with us in Tehran two weeks ago,” says Saeedi, although he declined to name the investor.

“They have a $50bn target for this region’s capital markets and we have to see how much our advisers can attract to Iran’s market.”

Tehran’s bourse trades a range of shares, funds and financial instruments, including Sukuk and Islamic funds. Under its new structure, Tehran’s exchange has online trading, an arbitration board to fast-track disputes, digital signature, enhanced investor protection, surveillance mechanisms as well as post-trade systems.

Saeedi also said the exchange has recruited expatriate Iranian investment advisers who are familiar with international financial markets, adding that the Central Bank of Iran (CBI) has also pledged to make it easier for foreign investors to open bank accounts.

Most of the 440 companies listed in TSE are affiliated with the state, even though they have been supposedly privatized. Many suffer problems such as mismanagement, overstaffing, opaque auditing systems, obsolete marketing and distribution networks and high levels of debt.

Almost all of Iran’s industry operates well below capacity and is in desperate need of investment and new technology.