Stock markets have their breathtaking ups and downs, and as matter of fact, both individual and institutional investors may experience losses, though unsettled investors may possibly go wrong in certain circumstances, selling off shares that have hit rock-bottom values.
The Tehran Stock Exchange (TSE) has been recently grappling with the problem of high expectations causing investors to respond in a reactionary manner. The irregular sentiment has pushed the benchmark down, triggering a broad wipeout and leaving the TEDPIX at a striking distance from its record low within the past 12 months.
Market analysts warn that emotional decision-making brings volatility back to the equity market, and may speed up the TSE’s downtrend. Failing to observe rational trading regulations, including diversification, and picking up the valuable shares, may jeopardize the capital market, and may even leave a bad impact on the economy.
The market development fund, financial institutions, the TSE itself and the Securities and Exchange Organization (SEO) should resort to practical actions to reassure that the stock market will soon get back on track. So far, no palpable step has been taken.
Considering unprecedented fluctuations in the value of the listed companies’ shares, it is not hard to conclude that groups of shaky investors have lost their bets during their rush for trade within the negative trading days. However, veteran investors and institutional investors always track downward days, snapping up the bargains to shore up their portfolios.
Suffering steep losses should not naturally be a stimulus for the investors to line up and get rid of shares. Furthermore, selloff lines may not drive investors to alter their attitude toward the value of shares.
Despite the ongoing anemic economic recovery, the bearish trend won’t be a persistent one, because the listed companies’ performance has not changed. Based on the semi-annual reports, they have not outperformed, yet they have published acceptable financial reports. Moreover, their estimations about the third and fourth quarter show signs of improvement.
The overall atmosphere at the equity market may be a bit gloomy. Therefore, all investors are strongly recommended to be patient, garner devalued shares, while being cautious about the financial statements and fundamental situation of the listed firms. However, other crucial contributors, including oil price, inflation, and economic growth, should be taken into consideration.
Negative Trade at TSE
The TSE’s benchmark extended its downward trend for another day to tumble 338.6 points or 0.47 percent at Wednesday’s close amid shaky sentiments among the investors.
According to the TSE data, the first market index lost 308.7 points or 0.59 percent to end at 71,043.1. The second market index retreated 276.9 points or 0.2 percent to settle at 139,868.1. The free float index pulled back 417.6 points or 0.51 percent to spur concern among various investors about the ongoing downtrend at the stock market. The industry index also erased 280.9 points or 0.47 percent to stand at 59,521.7, and the blue chip index followed suit, weighing negatively on the TEDPIX as it dipped 19 points or 0.59 percent to finish the week’s last trading day at 3,206.
Wednesday’s trade was marked by a drop in trade value, while the trade volume witnessed a brief upward. According to the report, more than 673 million shares changed hand, valued at almost 1.3 trillion rials.
Most of the sell and buy lines were related to Tejarat Bank, the National Investment Company of Iran, and the Oil Industry Investment Company, as these firms recorded the highest volume and value of the trade, respectively.
Behran Oil, Iran Transfo and Telecommunication Company of Iran left the most positive impact on the benchmark, while Ghadir Investment Company, Tejarat Bank, and Iran Khodro were market laggards, with the highest negative impact on the TSE’s gauge.
The TEDPIX’s fall on Wednesday came after two positive trading days, and overall TSE performance was gloomy, with more than 1 percent slide.
Market analysts believe that Wednesday’s poor sentiment was due to the upcoming holidays and investors’ expectations for next trading week. After the submission of next year’s budget to the parliament on Sunday, many argued that the bill provided evidence of only a small part of the government’s policies for the next fiscal year. Investors, above all, expect further details including the feedstock prices. The continued freefall of oil price is likely to be another significant contributor to the investors’ sentiment.
