Economy, Business And Markets

Major Firms Again Drag TEDPIX Lower

Major Firms Again Drag TEDPIX Lower
Major Firms Again Drag TEDPIX Lower

The Tehran Stock Exchange (TSE)’s main index recorded a fresh decline on Wednesday, as the largest listed companies left a negative impact on the benchmark at the end of the day.

The financial group and auto manufacturers posted big losses to continue their recent retreat and push the TEDPIX down. However, the number of companies ending Wednesday with gains witnessed a raise comparing the previous trading days.

It has been a few days since the TSE has again started to experience a bearish trend, mainly caused by the skittish mood of the investors, and their overreactions to the recent political developments, market fluctuations and speculations about the future of the equity market.

Investors immediately resort to selloffs at the first hint of any trouble or slight changes in political and economic spectra, as they conceive these as hurdles to gathering profits at the equity market. But overreliance on unofficial speculations will neither bear any fruits, nor will stop them from making losses as a result of their irregular decision making.

The TSE’s gauge has a striking distance from its record low this year, proving that the stocks are massively undervalued, providing a unique opportunity for investors to garner shares.

The downtrend is happening at a time when the administration has successfully managed to tackle the stagflation, and the economy has returned to the path of recovery.

Market analysts are critical of the selloff lines, emphasizing that unsettled individual and institutional investors should rely on foresighted policies. These analysts also indicate that some ambiguities have contributed to the recent downtrend. Investors, for instance, are kept waiting to see what details the government’s budget bill will contain for the upcoming year.

The administration is about to unveil the import tariffs for some key commodities, including iron ore, steel and sulfur, Siad Hossein Khezli Kharazi, CEO of Noor-e-Anvar Financial Holding, adding that “determining feedstock tariffs is also an important part of the government’s budget planning job, which can pave the way for the refineries to boost their trades.”

With regard to the recent bearish trend of the stock market, and Wednesday’s downward finish in particular, Kharazi underscored the method used for calculation at the TSE’s benchmark in Iran. “The major listed companies can push the gauge up or down, as the TEDPIX measurement is being done via a base-weighted method, which is called Laspeyre.”

The TEDPIX is a Laspeyres index, which measures price changes against a fixed base period quantity weight.

 TSE Trade on Wednesday

The indices failed again to help the TEDPIX to stay in green, pushing the benchmark down to dip 398.3 points or 0.55 percent to settle at 71,860.2.

According to TSE data, the first market index lost 244.7 points or 0.46 percent to 52,793.8. The second market index dropped 1,102.9 points or 0.77 percent to end the day at 142,275.1. The free float index ticked down 487.8 points or 0.59 percent to stand at 82,165.8. The industry index fell 289 points or 0.48 percent to finish at 60,323.3, and the blue chip index tumbled 19.4 points or 0.6 percent to close Wednesday at 3,232.2.

More than 764 million shares changed hands, valued at almost 2.2 trillion rials, which demonstrated a slight decline compared to the prior trading day.

Tejarat Bank recorded the highest volume of trade on Wednesday, although it ended negatively contributing to the TEDPIX. Iran Transfo Corporation, a leading manufacturer of various ranges of small distribution transformers to large power transformers in the Middle East, took the second place, while it was one of the key positive contributors to the TSE’s gauge.

Parsian, Oil and Gas Development Company topped the list of positive contributors to the TSE benchmark, and Fars and Khuzestan Cement Company took the second place.

The TSE’s benchmark shed more than 3 percent of its value this week, recording a massive retreat in just 5 trading days.