The Securities and Exchange Organization is planning to launch a new comprehensive database of all listed companies, known as CODAL system within the next three months.
The new system is compatible with all Internet browsers and features all listed companies’ information, SENA quoted head of SEO, Mohammad Fetanat as saying.
Speaking at a press conference on Sunday, Fetanat added that the total assets of companies listed at Tehran Stock Exchange and Iran Fara Bourse currently amount to $285.7 billion, of which total liabilities and shareholders’ equity account for 80% and 20% respectively.
“Market cap for TSE and IFB stands at $85.15 and $17.57 billion respectively and both TSE and IFB have an average price-earnings ratio of 5.5,” said the SEO head.
The average price-to-book ratio for all listed companies stands at 1.7, indicating the equity market’s tremendous potential for growth, he added.
The price-to-book ratio, or P/B ratio, is a financial ratio used to compare a company’s current market price to its book value. A lower P/B ratio could mean that the stock is undervalued.
According to Fetanat, the average earnings forecast for the listed companies is around $74.8 billion, while the net profit forecast for companies listed at IFB is estimated at $2.42 billion.
“Both TSE and IFB benchmarks have gone up since the beginning of the current Iranian year on March 21, rising by 7% and 17% respectively,” he said.
Book Building for IPOs
Fetanat said new initial public offerings are expected to be launched at the equity market by the end of August.
“IPOs will be launched for small cap companies. The issuers will initially be allowed to choose either the existing auction method or book building. Afterwards, all IPOs will be conducted through the process of book building for more transparency,” he noted.
Book building is a process of generating, capturing and recording investor demand for shares during an IPO or other securities during their issuance process, in order to support efficient price discovery.
Fetanat said a number of factors have contributed to the prevailing stock market downtrend.
“Investors are shrugging off the upbeat news of the nuclear deal reached between Iran and major world powers, which has in turn exacerbated the downtrend,” he said.
He mentioned the current economic atmosphere, global slump in iron ore prices, tumbling oil prices, uncertainties surrounding feedstock prices and a recent decision by the Central Bank of Iran that binds the commercial banks to maintain reserve requirements and slash dividends as other factors affecting the market’s sentiments.
