All indices contributed to help TEDPIX get back on track at Monday’s close, persuading risk-averse investors to garner devaluated shares, instead of lining up to get rid of them.
After the overall index’s broad retreat in the past few days, which was mainly caused by unreasonable expectations and overreactions, the Tehran Stock Exchange (TSE) recorded the week’s first positive trading day.
Due to estimations of a possible budget deficit over the recent plunge in oil prices, investors were portraying a gloomy prospect for the economy in the long-run, while the new budget bill submitted on Sunday to the parliament demonstrated that no budget deficit would be in sight for the next year, at least from the Rouhani administration’s point of view.
Due to a sudden drop in oil prices, Iran is expected to lose close to 30 percent of its revenues, said President Rouhani in the parliament Sunday. However, according to the newly revealed budget bill, the administration is going to offset the drastic cut in its revenues by increasing taxes.
In addition, the government is supposed to reduce the reserves held by the National Development Fund of Iran, from 30 percent to 10 percent, in a bid to fortify the economy and avert a potential deficit.
As was predicted by most of the fundamental and technical analysts, the rising volatilities failed to scatter veteran traders, though they did push part of the newcomers to mull over taking cash to competing markets like gold and foreign currencies.
The economy has been buoyed by cuts in expenditures and the implementation of ‘resistance economy’ policies, there is no solid indicator of a persistent bearish trend at the equity market.
Irregular investing behavior was quite evident as investors switched sell and buy lines, while the market witnessed swinging prices for high-yielding shares. The irrational investing approach is the source of heavy losses for the stock market, while paying attention to simple indicators may circumvent dramatic losses.
The TEDPIX has recorded fluctuations around 5 percent within the past 30 days, which triggered selloff lines for prominent listed companies. Institutional and veteran investors could manage their trade strategy, and deal with the unprecedented ups and downs, though groups of unsettled investors resorted to the unofficial reports, and misleads, selling shares at the lowest Price Earning (P/E) ratio.
Glimmer of Hope
The TSE’s early morning rally continued to Monday’s close, aided by all indices that pushed the TEDPIX to recoup at least a small portion of recent broad losses.
According to TSE data, the benchmark posted 206.6 points or 0.29 percent to settle at 71,376.6. The first market index jumped 181 points or 0.34 percent to end at 52,662.1. The second market index rose 217.8 points or 0.16 percent to stand at 139,848.8. The free float index led the gains, with a 0.43 percent or 351 points to 81,847.7. The industry index pulled higher 78.8 points or 0.13 percent to end the day at 59,799.2, and the blue chip index climbed 11.7 points or 0.36 percent to finish week’s first positive trading day at 3,226.4.
As the TSE is offering a glimpse of hope for the investors, trade volume recorded tangible growth compared the prior trading day, while the trade value slightly fell below the previous trading day.
Carmakers topped the volume of trade. Pars Khodro had the highest trade volume, with a 2.86 percent positive contribution to the benchmark, although Iran Khodro Diesel, which recorded the second largest volume of trade, witnessed a negative trading day in terms of where the value of its shares stood at the end of the day.
As uncertainties start to fade, the automakers and banking groups are making a fresh start, regaining their previous positions on top of the trades.
Mellat Bank managed to revise down, turning into the most positive contributor to the TEDPIX’s uptrend. Iran Khodro took the second place, and MAPNA Group stood third.
Various factors jacked up the TSE’s gauge, including the positive signals from the budget, the active role of the market development Fund, which helped bring stability back to the market, and a positive approach toward the devaluated shares.
Observing professional strategies to practically hedge the bets helps investors shore up portfolios. Covering macroeconomic news, along with reports on the related industries, will help investors ensure tangible earnings.
