Economy, Business And Markets

SEO to Help Address Key Industries’ Challenges

SEO to Help Address  Key Industries’ ChallengesSEO to Help Address  Key Industries’ Challenges

The new chairman of the Securities and Exchange Organization, Mohammad Fetanatfard, has underlined tackling serious challenges facing the listed industries at the equity market as his main concern, SENA reported.

Speaking in a meeting with SEO managers, the newly appointed chairman went on to say that the government's approach toward the capital market is totally positive, adding that "the equity market reflects the state of the economy as it is."

Given the ambiguities and challenges faced by the key industries like refining, petrochemical, mining as well as the banking sector, utmost efforts will be made to trim the challenges in the short-run, said Fetanatfard.

He further stressed that the SEO's long-term policy is to bolster and expand the capital market, adding that "details of a concrete plan, aimed at reinvigorating the stock market will be revealed officially in the near future."

According to the report, constant interaction with capital market activists, institutional investors, and the relevant decision makers in the parliament and governmental bodies is prioritized by the new SEO management in a bid to help the equity market back on track, convincing individual investors to flock back to stock market.

"Providing the listed industries with adequate liquidity through the stock market is the core policy of the administration and in doing so, first market and secondary market should be bolstered", Fetanatfard stated.

Making remarks on the importance of the secondary market, he underscored that mitigating the risks, specifically systematic risks, is the most significant contributor for attracting both individual and institutional investors to hedge their bets again at the stock market, said Fetanatfard.

TSE Lackluster Week

The Tehran Stock Exchange (TSE) posted one of the most negative weeks within the past 14 months, with the benchmark dipping more than 2.18 percent, extending its massive retreats amid the gloomy outlook of the economy.

According to TSE data, the stock market's main overall index plunged 1,548 points or 2.18 percent to settle at 69,495, hitting a new record low during the past 14 months.

The persisting downfall of the oil price, followed by predictions of a potential budget deficit was a huge trigger to push the TEDPIX dramatically down just within two weeks.

Uncertainty won’t continue to loom large over the stock market, say most of the market analysts, emphasizing a unique opportunity to garner undervalued shares.

The equity market is struggling with overreactions, as shaky behavior heavily weighs on the benchmark, IRNA quoted Saied Shirazi deputy of Civil Pension Fund Investment Co., who added that "a big number of shares are undervalued enough, so the dented sentiment can't continue like this."

Shirazi further stressed that considering the lowest ever average Price Earnings ratio (P/E), investors have an unprecedented opportunity to garner a hoard of securities.

But as a result of the prevailing recession that has gripped various industries along with economic hardship due to the western sanctions and crude price slump, panic selloff has recently dominated the stock market. Adding to the ambiguities surrounding investors is the uncertainties over the feedstock price in the fiscal budget of 2015, which can leave the most crucial impact on the petrochemical complexes already listed at the equity market. Any move to stimulate direct foreign investment may boost the petrochemical industry in Iran, yet, western sanctions, especially on money transactions, should be considered as a major laggard.  

The administration is trying to revive positive expectations for the prospect of the economy in the long-run, helping industries to shrug off potential budget deficits, though mere data does little to dispel doubts about the future of the economy.