A new supply of liquidity into the equity market, along with the increased interest of funds in buying shares, has led to 91.9 percent surge in TSE’s weekly trade volume, SENA reported.
Close to 3.5 billion shares changed hands valued at 5.571 billion rials in the week that ended Oct. 1, demonstrating 17.1 percent increase in value compared to last week.
Recording a single uptrend day, the equity market’s benchmark failed to shift the persistent downward trend, as TEDPIX lost 147 points or 0.21 percent to remain stuck in the red territory.
The TEDPIX has been grappling with a persistent downtrend during the past six months, as it plunged 7,375 points or 9.3 percent within 129 working days from the beginning of the year (March) until October 1.
According to the TSE website, the first market index was down 229 points or 0.43 percent to 52,501. The free floating index dipped 365 points or 0.45 percent to 80,634.8. The industry index also plummeted 34 points or 0.06 percent to 60,827.5. The financial index lost some value as it slumped 1,464 points or 1.13 percent to 127,879.9. The blue chip index stood in red, like most other major indices, losing 23 points or 0.7 to finish the week at 3,282.2.
The second market index, which is a major performance indicator at the TSE, was an exception as it rose 470 points or 0.33 percent to 142,667.5.
Fixed rate bonds traded over the week recorded a tepid growth, with the total value of their trade reaching 465 billion rials to record a 43.1 rise compared to last week.
Most investors are studying the high yield stocks in the equity market, while unsettled investors have already suffered big losses due to the current downward trend.
A new report released by the TSE indicates that investors’ taste has changed as they are becoming more reluctant to the once popular industries listed at the TSE, while now they have become more open toward investing in small industries. Various contributors motivate investors to move their money in different directions. Among the top 10 listed firms at the TSE, considering the value of the trade, are 8 companies in chemical, mining, metal and petroleum. Currently these sectors are struggling with global fluctuations of raw materials and currencies.
This tendency causes them to suffer from unprecedented volatilities, which have somehow left a negative impact on their earnings potential, so the companies have failed to meet market expectations on their earnings.
The current stagflation in the raw materials market, and its downtrend contributed the most to the net profit of these companies. Besides, the short term anticipation demonstrates stability for the currencies market and has trimmed the expectations on the earnings of these industries.
It should be noted that these companies are a challenge for the stock market and, therefore, an unexpected change in the value of their shares will result in the bearish trend’s persistence at the equity market. This would also have a long-term impact on both the value and the volume of trading in the market.
However, the change in investors’ mood, i.e. their tendency to invest in small industries, has helped these industries to grow and has convinced nervous investors to pay special attention to the small firms listed at the TSE.
The government, in collaboration with the Securities and Exchange Organization, is determined to bolster the capital market by providing extra funds for the industries. For now, small companies can reap the benefit from this move, but the leading industries would still have to face global market fluctuations.
