Economy, Business And Markets

Undervalued Shares Still in Vogue

Undervalued Shares  Still in VogueUndervalued Shares  Still in Vogue

The recent broad retreat at the Tehran Stock Exchange (TSE) pushed down the benchmark to its previous record low, highlighting the TSE's unique Price Earning (P/E) ratio, which provides an exceptional opportunity for investors to shore up portfolios.

Considering the P/E ratio at the equity markets across the industrialized world and also in the regional countries, Iran is offering the lowest rate, almost 5.4, which indicates that so many shares have been undervalued at TSE.

Investors generally seek to hedge their bets specifically when slowdown is rippling through the economy. Low P/E ratio is one of the key indicators for both individual and institutional investors that the right time has arrived. However, experts usually emphasize both the fundamental and technical approaches to the listed companies.

Veteran scalpers are snapping lucrative trades, as some of the high-yielding shares are witnessing breathtaking ups and downs, which is mostly due to the unsettled investors' uneducated trade strategies.

As the pace of recovery is increasing, both big and small industries are more likely to witness unprecedented growth, although cautious moves in listed firms' evaluation are strongly recommended by market analysts.

As was estimated by analysts, market jitters have contributed to the most to the recent sloppy trend, while there has been no fundamental change to the overall atmosphere of trading at the stock exchange.

The dramatic plunge of crude prices and temporary fluctuations of the foreign currencies market could be considered as market laggards, though the unprecedented fall is mostly due to the high expectations and emotional decisions made by shaky investors.

Shares at the TSE have lost their nominal values, letting investors garner the popular stocks at their rock-bottom price and make spectacular gains in the blink of an eye.

The upbeat news in the equity market is that the general terms of the government's bill to help the economy step out of recession have been approved by the parliament, as reported by Tasnim news agency on Tuesday, paving the way for the resumption of the economic recovery.

It is hard to escape the conclusion that a possible comprehensive nuclear agreement between Iran and the P5+1 will dramatically boost both the volume and the value of TSE's trade.

A Flat Trading day at TSE

After the benchmark rally on Monday, the TSE had a seesaw trading day, leading the TEDPIX to briefly edge up 5.1 points or 0.01 percent to stand at 71,381.7.

According to TSE data, the first and free floating indices failed to contribute to the fresh uptrend, weighing largely on where the TEDPIX stood at Tuesday's close.

The first market index shed 39.8 points or 0.08 percent to 52,622.3. The second market index gained 297.2 points or 0.21 percent to end the day at 140,145.2. The free float index inched down 17.9 points or 0.02 percent to settle at 81,829.8. The industry index edged up 3.4 points or 0.01 percent, wrapping up Tuesday at 59,802.6.

Bahman Group and Pars Khodro were the most popular ones, as they recorded the highest volume of trade for the day.

Mobile Telecommunication Company of Iran had a lucrative trading day, as investors lined up to buy its shares, which left more than 40.08 percent positive impact on the TEDPIX. MAPNA Group was another significant contributor the benchmark uptrend with 25.68 percent.

The TSE's atmosphere is getting clearer day by day, and this is expected to trigger a new wave of lines to be formed for devaluated shares.