Economy, Business And Markets

Stock Market Trading Marks Turning Point

Stock Market Trading Marks Turning PointStock Market Trading Marks Turning Point

The implementation of Iran's landmark nuclear deal with world powers this past Iranian week (ended Jan. 22) breathed new life into the stock market that has been stagnating at two-year lows until recently.

The UN nuclear watchdog's late Jan. 16 announcement that Tehran has been abiding by its promise to curb its nuclear program meant years of sanctions imposed by the West are finally over and done with.

The stock market, seen as a gauge of overall economic performance, responded favorably to the news.

“The lifting of sanctions will have a direct impact on the profitability of many companies and sectors such as banks and industrial companies, making it cheaper and easier for them to transact globally,” said Ramin Rabii, chief executive officer of Turquoise Partners in Tehran.

Tehran Stock Exchange's main index, TEDPIX, jumped 2.12% on January 16 (Implementation Day) to 64,860.90 points—its highest since August 23 by the market's close, as banks and financial services, petrochemicals, shipping and telecoms led the rise.

The main index of Iran's more nimble over-the-counter market, Iran Fara Bourse, which has been shadowing the TSE, surged 2.82% to a four-month high of 731.32 points by Saturday's close, as its petrochemical-heavy portfolio gained.

"The rally has good momentum. Most of the demand has come from non-institutional investors while institutional investors, battered by the market's two years of decline, were sellers. I think the market will continue its uptrend, unless new problems surface," Seyyed Ali Khosroshahi, Amin Investment Bank's senior bonds analyst, told Financial Tribune.

> Weekly Report

TEDPIX rose 3,046 points or 4.79% during the week that ended on January 22, compared to the previous trading week to stop at 66,562.

Over seven billion shares worth $357.4 million changed hands in 445,000 transactions, registering 29%, 19.3% and 27.4% growth in weekly trade volume, value and number of transactions respectively compared to last week.

The First Market Index gained 2,070 points or 4.74% to end at 45,733. The Second Market Index added 7,019 points or 4.89% to 150,501.

Telecommunication companies were top gainers of the week with a 16.01% share of weekly market transactions, followed by automobile and auto parts manufacture with 13.39% and transportation and storage with 10.05% respectively.

The IFB benchmark IFX jumped 7.8 points or 1.1% during the same week to settle at 719.

IFB’s markets witnessed the trading of 1.4 billion securities valued at $319.3 million in 173,000 transactions. Weekly trade volume registered an 8% decline compared to the preceding week, while trade value and number of transactions rose 54% and 24% respectively.

Banks and credit institutions had the highest share of transactions with 11%, followed closely by hotels, restaurants and chemical products.

> Monthly Report

TEDPIX jumped 5,044 points or 8.20% during the month that ended January 2o (Iranian month of Dey) compared to the previous month to end at 66,562.

Close to 22.3 billion shares were traded in 1.2 million transactions valued at $1.3 billion, filing a 190.5% and 148% rise in monthly trade volume and value respectively. The number of transactions grew 122%.

The First Market Index jumped 3,544 points to end at 45,733 and the Second Market Index was up 10,945 points to 150,501, recording 8.40% and 7.84% growth respectively.

Over 1.9 million participations bonds valued at $54.2 million changed hands, indicating a 69% decline in both volume and value compared to the previous month.

The automobile and auto parts manufacture sector accounted for the highest share of monthly transactions with 39.70%, followed by medical and optic equipment with 38.91%, oil and gas extraction and related services with 35.89%, metal products with 30.71%, electrical machinery with 23.49% and industrial machinery and equipment with 21.26%.

The IFX grew 44.3 points or 6.6%–its highest since July 23–to end at 719.

Close to 5.6 billion securities were traded in 549,000 transactions worth $952.8 million, according to IFB.

IFB's monthly trade volume and value recorded a 75% and 37% growth. The market cap jumped $1.08 billion or 5% to end at $22.5 billion.

On average, about 266 million shares worth $45.3 million were traded on a daily basis during the month.

Base Metals accounted for the highest share of the monthly transactions with a 12% share. Banks and credit institutions, chemical products and insurance and pensions group followed with 11%, 10% and 8% respectively.