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Sluggish Economy Drags Down TEDPIX

Sluggish Economy Drags Down TEDPIXSluggish Economy Drags Down TEDPIX

The Tehran Stock Exchange’s benchmark recorded a fresh record low within the past 14 months at Wednesday’s close, amid brittle economic state that has underscored the persistent shaky sentiment of the equity market within the past 3 weeks.

Due to the ongoing uncertainties about Iran’s fiscal budget for the next year (starting March 21, 2015), and the hobbling economy, TSE’s stocks have been particularly hit hard and undervalued.

Recent benchmark nosedive has spurred concern among both individual and institutional investors. Though most of the stocks have hit rock-bottom value, pushing the average Price Earnings ratio (P/E) to an unprecedented low level, investors are not convinced yet to garner shares.

Ambiguities over the tumbling oil price have slashed the expectations on companies’ yields, as the performance of a big number of listed firms is somehow associated with the oil price.

The newly appointed chief of the Securities and Exchange Organization (SEO) on Wednesday announced that his new strategies will boost the capital market, and persuade investors to shore up portfolios once again.

As the benchmark dramatically plunged to a historic 14-month low in face of heightened economic woes, the equity market is more likely to witness the introduction of a concrete stimulus in the upcoming days.

Stocks waxed and waned on week’s last trading day, with the TEDPIX retreating 114 points or 0.16 percent to record a fresh negative day after its uptick on Tuesday.

According to TSE data, the first market index lost 48.2 points or 0.09 percent to end at 50,956.3. The second market index tumbled 495 points or 0.33 percent to 138,247. The free float index plummeted 252.3 points or 0.32 percent to settle at 79,178.5. The industry index fell 142.3 points or 0.24 percent to stand at 58,285.4, and the blue chip index 3.3 points or 0.11 percent to finish at 3,115.6.

Trade volume kept falling down compared with the past two days, with more than 616 million shares changing hands, valued at almost 1.87 trillion rials. Trade value indicated almost 13 percent growth in comparison with Tuesday.

Financial groups’ shares are turning to eye-catching ones, with most of the investors trying to shore up their portfolios with banking shares. Even though there is no correlation between the dramatic plunge of the oil price and the market value of financial groups, banking shares along with most other shares massively lost their values, portraying a golden buying opportunity.

Once again, Mellat Bank topped the positive contributors to the benchmark. Ghadir Investment Company took the second place, and Saderat Bank, as one of the leading commercial banks, took the third place.

Iran Khodro had a gloomy trading day with more than 24.9 percent negative contribution to the TEDPIX. Chadormalu Mining and Industrial Company was the second biggest laggard to the benchmark.

Financialtribune.com