Economy, Business And Markets

Stocks on the Rebound

Stocks on the ReboundStocks on the Rebound

After three weeks of rout at Tehran Stock Exchange, TEDPIX wrapped up the week ending June 17 in green, pulling up 1,238 points or 1.99 percent to settle at 63,559.7.

Following the previous trading week’s trend, the TSE benchmark was limping to mixed close or posting brief gains or losses in the first four trading days of the week. However, dovish signals from the ongoing nuclear talks between Iran and the P5+1 were accompanied by a massive rally on Wednesday to help TEDPIX accumulate breathtaking gains and end the week in green.

US Secretary of State John Kerry signaled for the first time on Tuesday that major sanctions against Iran might be lifted long before international inspectors get definitive answers to the longstanding accusations about Iran’s nuclear energy program.

It was enough for unsettled but intrepid investors to shrug off the limping economy and flock back to the equity market to garner stocks, some of which are even being traded below their intrinsic values.

According to TSE data for the past week, all indices helped TEDPIX to wipe out massive losses incurred since April 7. The first market index notched up 980 points or 2.19 percent to end at 45,738.7. The second market index rose 2,015 points or 1.55 percent to 131,900.3. The free float index surged 1,900 points or 2.69 percent to 72,659.8. The industry index gained 638 points or 1.24 percent to 52,118.6. The financial index dramatically soared 7,404 points or 5.69 percent to stand at 131,900.3 and the blue-chip index jumped 72 points or 2.75 percent to 2,910.

About 2.6 billion shares changed hands to post 34.8 percent growth compared to the prior trading week. Weekly trade value, including rights offerings, reached $196.1 million to register a 62.7-percent surge.

The rebound is expected to extend in the coming days; however, the gains might not be as robust as Wednesday’s rally. Disclosure of upbeat news on the ongoing nuclear talks, the recent Central Bank of Iran’s report on last year’s economic growth and the listed companies’ positive adjustment are expected to give a boost to the equity market.

Gross domestic product in the Iranian year that ended March 20, 2015 reached 2,031 trillion rials ($70 billion at official exchange rate) at prices using 2004 as base year, according to a preliminary report released by the CBI’s Economic Research and Policy Department.

The expected relief from western sanctions is expected to triple Iran’s economic growth rate, by eliminating restrictions on shipping oil exports to the US and Western Europe, while ending the nation’s breakup from the global financial and banking systems.