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Market Cap Surges, TEDPIX Ends Down

Market Cap Surges, TEDPIX Ends DownMarket Cap Surges, TEDPIX Ends Down

A new Initial Public Offering (IPO) pushed the market cap up by 600 billion rials, while the Tehran Stock Exchange’s main index (TEDPIX) slid briefly to end in red territory for the second consecutive day on Sunday.

Cement Investment and Development Company (CIDCO)’s IPO grabbed the investors’ attention, leading them to shore up their portfolios with the company’s lucrative shares, weighing on some of the TSE indices.

CIDCO, the 481th listed company and the 31th cement producer at the TSE, offered 400 million shares on Sunday, accounting for 10 percent of the company’s total shares. The offering helped the market cap to witness a dramatic surge, SENA quoted Hassan Ghalibaf-Asl, head of the TSE as saying.

As the investors always tend to snap chances to hedge their bets, they prefer to sell off their other shares to be able to buy the ‘hot’ IPO shares – a trend which was evident through yesterday’s trade. Most indices closed lower at Sunday’s close, while free float index was one of the two indices that ended the day in green.

TSE roller coaster trading day started with an uptick, followed with a drop, pushing TEDPIX down 17.1 points or 0.02 percent to 75,929.4.

The first market index inched down 2.4 points to end a flat trading day. The second market index slipped 131.1 points or 0.09 percent to 147,981.1. The free float index managed to post some gains, climbing 246.3 points or 0.28 percent to end at 87,304.2. The industry index lost 98.7 points or 0.16 percent to 63,402, and the blue chip index gained 8.7 points or 0.25 percent to finish in green.

The equity market investors have preferred to act in a conservative manner in the past few trading days, as the market sentiment now relies much on reports from the possible outcome of the nuclear talks between Iran and the P5+1 .

Due to the semi-cloudy atmosphere at the TSE, trading volume and value witnessed a downturn, after almost 1 billion shares were traded, valued 2.8 trillion rials.

As expected, CIDCO heavily influenced the TEDPIX, recording the highest volume of trades. Zamyad Company, a commercial vehicle manufacturer, stood second, and Rena Industrial Group Investment Company took the third place.

Banking group members are trying to retake their position back on the top of the trades.

On Sunday, Pasargad Bank managed to top the positive contributions to the TSE’s benchmark. Iran Aluminum Company and Mellat Bank took the second and third spots, respectively.

Market analysts describe the current downturn as a brief gap between the recent and the future bullish trend at the TSE, expecting the positive trading days to come back again, especially if the long-awaited ‘permanent’ nuclear deal is reached by the November 24 deadline.

As the market is still experiencing brief volatilities, investors are highly recommended to behave cautiously in their trades, observing diversification, avoiding hurried selloffs or share buys based on unofficial news and unrealistic predictions.

Financialtribune.com