Economy, Business And Markets

TSE Benchmark Stages Broad Rally

TSE Benchmark  Stages Broad RallyTSE Benchmark  Stages Broad Rally

Stocks at the Tehran Stock Exchange pushed the TEDPIX up, staging a broad rally at Monday’s close, amid positive expectations among investors on a possible comprehensive nuclear agreement between Iran and the P5+1.

The lingering ambiguities weigh on the stock exchange tend to fade away, as unsettled investors keep their hopes up, grabbing the bargains in a bid to enjoy market boom, given the western sanctions are lifted. Hours before the deadline on Monday, negotiators from Iran and the P5+1 group of major world powers planned to extend the talks for another seven months, a Western diplomat told the New York Times.

An agreement on the main elements of the accord is to be drafted by March 1, the diplomat said. The final details are to be completed by July. The negotiations are to resume next month. The location for the December talks has yet to be announced, but over the past month, Secretary of State John Kerry has met with his Iranian counterpart, Mohammad Javad Zarif, in Muscat, Oman, and in Vienna.

Individual and institutional investors are mulling over garnering as much shares as they can, although some skeptical investors resort to other policies to avoid unexpected losses.

Regarding the market cap and the daily trade volume, market liquidity has significantly surged, indicating that the enthusiasm for stock buying would not diminish any more.

According to the TSE’s website, bulls found way to rein again in the equity market, as the benchmark soar 559.4 points or 0.74 percent, settling at 75,949 to approach the 76,000 mark.

The first market index gained 520.8 points or 0.93 percent to end at 56,312.7. The second market index climbed 390.8 points or 0.27 percent to 146,999.8. The free floating index led Monday gains, surging 1,059.9 points or 1.22 percent to stand at 88,190.1. The industry index was up 200.5 points or 0.32 percent to finish at 62,959.8, and the blue chip index rose 40.5 point or 1.17 percent, helping the TSE’s gauge to stay in green.  

Monday’s trade was witnessing a breathtaking growth in terms of trade value. More than 1.6 trillion shares changed hands, valued at almost 4.42 trillion rials.

Saderat Bank recorded the highest volume of trades, contributing close to 50 percent to the TSEPIX upsurge. National Iranian Industries Copper Company took the second place, and Tejarat Bank stood third with an almost 44 percent contribution to the equity market’s gauge.

Mellat Bank left the most positive impact on the TEDPIX, and Pasargad Bank and Mapna stood next with nearly 63 and 57 percent contribution, respectively.

 Market Expectations

Iran and world six powers missed the self-imposed deadline of November 24 to clinch a comprehensive deal, although the Geneva agreement was extended up to July hours before the deadline.

The TSE is not expected to witness a drastic shift into red or a breathtaking surge, as the situation has not changed, and the hopes have not faded away either.

The extension of the interim Geneva agreement demonstrates that both sides are expecting a final deal, as time scheduling has so far failed to resolve the decade-long standoff.

On November 24, 2013, the P5+1 (United States, United Kingdom, Germany, France, Russia and China) reached an agreement with Iran whereby Iran would curb parts of its nuclear program in return for a reversible suspension of certain trade restrictions against it under the western sanctions. The suspension applied for an initial period of six months but is contingent upon Iran’s continued compliance with the November deal.

The equity market has moved recently on the right track, while unsettled investors were expecting a comprehensive agreement. The extension of the current situation means no new embargo will be imposed on Iran, though as market analyst estimate, any change will be temporary.