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Growth in Market Liquidity
Economy, Business And Markets

Growth in Market Liquidity

More than 120 trillion rials have been injected into the capital market within the first half of the current year, ending Sep. 22, demonstrating a tepid growth in comparison to the same period last year, Hassan Ghalibaf-Asl, director of the Tehran Stock Exchange (TSE) told SENA.
He also said that trading codes within the same period indicate that more investors felt convinced of the strength of the market, as 110,000 trading codes had been issued in the period. The move suggests that new investors with fresh cash flows have now entered the equity market compared with the same period last year.    
The new trend at the stock market is to benchmark the equity market against competing markets in the country.
The TSE director also said that one of the most crucial challenges in the capital market liquidity is the government’s large ownership of liquidity, which is unpopular with large firms.
The bi-annual reports of registered firms at the TSE coupled with new money invested by traders would kick-start the economy, Ghalibaf Asl added.
“Given the ongoing slump in many industries, the bi-annual reports were inevitably realistic about their profit earnings.  However, new forecasts on the country’s financial future have begun to foster a more vigorous economy”, he added.
Responding to questions on the listed companies’ biannual earnings reports, he added that “These reports have indicated the realistic picture of earnings in the local sluggish economy,” going on to say that since these reports are not gloomy in the whole, they suggest that the economy is beginning to move out of its slump.  
Meanwhile, he emphasized that most of the industries have met their estimates on their budgets, as they have competently managed financial and operational expenditures.
Ghalibaf-Asl also reiterated that the limping economy couldn’t fundamentally affect the firms’ operations, as most of them enjoyed stable budgets.
Regarding the sluggish trend of new firms’ admission at the equity market within the first half of the year, he noted that the admission of 13 newly listed companies is underway and some of them have been already accepted at the TSE.
Ghalibaf-Asl went on to say, different regulations have been applied for companies, holdings, and other companies with consolidated financial reports engaged in the equity market to submit their first quarter and bi-annual reports.
As Ghalibaf-Asl said, holdings have up to 60 to 70 days compared to the other types of companies to submit their financial reports. He also added that those who fail to present their financial reports within the legal deadline will be referred to the organization’s disciplinary committee.

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(Stock market analysts were expecting a boost after the disclosure of the biannual reports of registered firms at the TSE, while the result was not as positive as it was expected to be.
Considering the government’s plan of action to help the country step out of recession, and the Securities and Exchange Organization’s strategic plan to tackle the equity market challenges, final results from the biannual reports were tepid at best, dampening previous speculations previously that there would be a huge uptick in profit.
The slowdown, which is still rippling through different sections of the economy, has negatively impacted the companies’ functions, but due to the economy’ overall performance, market sentiments have begun to turn around.
Both internal and external factors may contribute to the industries prosperity or their fall. Hence, when it comes to shoring up and diversifying portfolios, external factors such as global shifts in the price of materials should also be considered.
On the other hand, geopolitical unrest mostly in neighboring countries is another huge challenge for certain industries.
As the pace of recovery is increasing, and capital market continues to strengthen the future is beginning to look more positive in the medium to long term. )

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