Economy, Business And Markets

TEDPIX Keeps Rallying, Exceeds 74,000

TEDPIX Keeps Rallying, Exceeds 74,000
TEDPIX Keeps Rallying, Exceeds 74,000

The TEDPIX continued to make gains on Tuesday, with the Tehran Stock Exchange (TSE) indices up more than 1.7 percent each, since Sunday.

The TSE’s main index started rallying once again at the very beginning of the day, hitting 74,000, after the equity market’ gauge notched a record high in more than 10 months on Monday.

Lots of folks are said to be back to the equity market, as they have turned bullish about the stocks these days, lining up to garner shares.

According to the TSE’s website, the market’s main benchmark surged 558.7 points or 0.76 percent to end another bustling trading day at 74,109.1 on Tuesday. The first market index gained 481.5 points or 0.89 percent to 54,648.  The second market index soared 638.7 points or 0.44 percent to settle at 145,408.7. The free floating index jumped 930.8 points or 1.12 percent to close a fresh dynamic trading day at 84,190.7. The industry index was up 259.2 points or 0.42 percent to 62,626.3, and the blue chip index rose 43.8 points or 1.3 percent to finish at 3,403.9.

Despite the broad rally on Tuesday, the TEDPIX failed to get close to the previous day’s record growth (1.75%), although the trading volume increased compared with Monday.

More than 1.012 trillion shares were traded, valued at almost 2.8 trillion rials, indicating that the trading value slightly ticked lower, while the trading volume peaked a new high compared to Monday.

Mellat Bank topped as it recorded the highest volume of trades. Kharazmi Investment Company, with an almost 5 trillion rials market cap came second as investors found its shares profitable.

Regarding the market’s trading value, Mellat Bank came on top and MAPNA group stood next taking the second place.

Persian Gulf Petrochemical Industry Company was in spotlight as it had the greatest positive impact on the equity market’s gauge. Mellat Bank was the second top contributor to the TEDPIX. National Iranian Copper Industry Company took the third place in helping the TEDPIX’s uptrend.

Omid Investment Company was among the rare market laggards and had the most negative impact on the stock market’s benchmark.

As veteran stock dealers believe, stocks have had their ups and downs and bear won’t won’t be reigning over the stock market any time soon.

Although the TSE may not get back to its sloppy trading days, the stocks’ outperforming won’t apparently be long lasting, a market dealer in Tehran told Financial Tribune, adding that the ongoing slump that various industries are engaged with, still exists and keeps affecting them.

“The unprecedented surge at the TSE has shocked the traders and led them to shore up their portfolios, although the main contributor/s of this record high is not known precisely,” Mahtab Samari said.

  Market Speculation

One of the Securities and Exchange Organization’s officials suggested on Monday that new flow of liquidity has bolstered the capital market.

“The historical Price/Earnings ratio (P/E) coupled with companies’ positive six month reports contributed the most to the TSE’s new peak in the past few months,” SENA quoted Mahmoudreza Khajenasiri, head of the supervision on exchanges department, as saying.

There are some speculations that huge amounts of money have been injected to the equity market, causing a drastic shift from sluggish trading days to bustling ones.

Some analysts believe that two or three major individual investors, helped the TEDPIX to record a concrete peak. Financial Tribune could not confirm the statements.

The Iranian economy has been recovering in recent months from a two-year recession. This may also be another promising indicator for investors to shift once again to the equity market.

A prospective comprehensive agreement over Iran’s nuclear program is still the most crucial factor, which seriously influences the decisions of the shaky traders, as sometimes, investors rely just on the irrelevant indicators.

Recently, upbeat news over the potential agreement fueled hopes that the TSE may hit its historical record high in 2013. But Reuters said in a Tuesday’s report that the two sides are “far apart” from each other.

Notwithstanding the challenges ahead, the TSE’s recent rally was breathtaking enough to steel the global spotlight.

Reuters says that economic sanctions have pressed Iran’s economy but created one of the last unexploited opportunities for international portfolio investors, who could start moving their money in this year if geopolitics permit.

As negotiations between Iran and the six world powers continue in a bid to reach a permanent nuclear deal by the November 24 deadline, an agreement would lead to the lifting of Western sanctions, which have largely frozen Iran out of the global banking system, deterring the vast majority of foreign investors.

Those investors are expected to pour billions of dollars into Iran’s economy in the event of a nuclear deal, but negotiating contracts and obtaining licenses for business ventures and factories could take months. So, the fastest way to gain exposure to the Iranian economy may be the stock market - a prospect for which many foreign funds have started to prepare.

Recently, serious investors referring to the leading Iranian investment banks and brokerages, mostly those having branches overseas, have begun negotiating the ways to exploit one of the biggest untouched frontier markets in the world.

In Iran, unsettled investors have started gearing up to diversify their portfolios as the demand on various shares -- specifically those with high dividends -- is significantly rising.