Tehran Stock Exchange’s benchmark index TEDPIX jumped by 1,549 points or 2.03% during the trading week that ended August 3 to close at 77,883.
TSE trading days start on Saturday and end on Wednesday.
The benchmark ended the week after staging gains for 14 consecutive trading days.
Over 4 billion shares valued at $261.6 million were traded during the week. The number of traded shares and weekly trade value grew by 5.3% and 7.5% respectively compared with the previous week.
The First Market Index gained 1,496.3 points or 2.75% to end at 55,266.3. The Second Market Index added 1,649 points or 1% to close at 165,820.
The ‘metal ores’ group recorded the highest weekly rise in share value (3.77%), followed by ‘oil products’ (3.55%) and ‘leather products’ (3.37%).
IFX, Iran Fara Bourse’s main index gained 14.2 points or 1.8% during the same week to end at 813.90.
Over 980 million securities valued at $134.4 million were traded in the over-the-counter exchange. The number of traded shares and weekly trade value dropped by 80% and 46% respectively.
IFB’s market cap gained $300 million or 1% to $27.1 billion.
SEO Reshuffle
Mohammad Fetanat-Fard, the head of Securities and Exchange Organization, stepped down on Tuesday in a surprise move citing heart problem as the official reason.
Deputy Economy Minister Shapour Mohammadi was appointed by the Bourse High Council to lead the organization.
The other four board members of SEO were also replaced. Hassan Amiri, Ali Saeedi, Saeed Fallahpour and Ahmad Araqchi were appointed as board members.
The induction ceremony for the new SEO chief was held on Wednesday in the presence of Economy Minister Ali Tayyebnia.
“Fetanat-Fard took the helm of SEO at a turbulent time. Within the 20 months in office, he delivered outstanding results in the capital market,” he said.
The Economy Minister has appointed Fetanat-Fard as his consultant.
“Iran’s capital market raised $28.5 billion for listed companies during the previous Iranian year (March 2015-16),” Tayyebnia said, adding that the figure stood at $8.5 billion the year before.
According to Fetanat-Fard, Tehran Stock Exchange’s benchmark index has more than doubled since President Hassan Rouhani took office in August 2013 to break above the 77,000 mark.
Mohammadi said he is putting development of new financial instruments on top of his to-do list.
Tax Exemption on Revaluation of Fixed Assets
Another important news in the stock market over the past week was First Vice President Es’haq Jahangiri’s issuance of a directive to government bodies to execute a July 20 Cabinet decision to exempt gains from revaluing fixed assets from tax, if companies revalue their assets before March 2017.
The decision will benefit most listed corporations, as they can restructure their statement to better reflect their state without incurring tax costs.
Rampant inflation due to continued economic turmoil during the past five years has left the book value of corporate assets far behind their market prices, while their liabilities have surged due to high interest rates and recession.
Companies revalue their fixed assets, including machines, buildings, patents or licenses, to accurately describe the true value of the capital goods they own. This should be distinguished from planned depreciation, where the recorded decline in value of an asset is tied to its age. The purpose of a revaluation is to bring into the books the fair market value of fixed assets.
Upward revaluation is not considered a normal gain and is not recorded in income statement. This means it is generally not taxed. However, Iran’s law taxes companies on these gains.
The government had allowed a temporary exemption for companies, if they carried out the revaluation before March 2016. Some companies, including automaker Iran Khodro, did not file the necessary documents on time, overshooting the government deadline. Their stocks took a hit.
However, complaints and lobbying from companies, which had failed to take advantage of the exemption, soon followed with many media outlets supporting Iran Khodro and attributing market declines to ending the exemption.
Now with the Sunday issuance of the directive, the government has in effect extended the exemption’s deadline so companies that failed to sort their books in time get a second chance.
The markets reacted positively to the news which was broken on Monday.
TSE’s benchmark rose 442 points to an 11-week high of 77,089.80 points on Tuesday.
Iran Fara Bourse’s main index advanced a full percentage point to 808.07 point by Tuesday’s close, highest since June 8.
Jahangiri issued the Cabinet decision to four ministries, along with the Management and Planning Organization, for execution. He addressed the Ministry of Economic Affairs and Finance, Ministry of Industries, Mining and Trade, Ministry of Energy and Ministry of Cooperatives, Labor and Social Welfare.
