Lingering worries along with ambiguities surrounding the equity market have kept dragging down the TEDPIX since November 12, notching new record lows within the past 15 months.
Institutional and individual investors are shrugging off the well-flagged positive economic indicators, weighing on the benchmark via their panic selloffs and short-term approach to the stock market trading.
Monday’s trade at the Tehran Stock Exchange (TSE) was accompanied by more evaporation of gains with a higher proportion of listed firms ending in red.
According to TSE data, the overall index slipped 201.5 points or 0.29 percent, extending recent massive losses, ending at 69,424. The first market index retreated 130.7 points or 0.25 percent to stand at 51,245.2. The second market index plummeted 513.1 points or 0.38 percent to 135,862.9. The free float index tumbled 271 points or 0.34 percent to 79,491.9. The industry index pulled back 128.5 points or 0.22 percent to settle at 58,135.5, and the blue chip index shed 11.1 points or 0.36 percent to finish at 3,114.7.
Unlike the previous trading days, the benchmark pullback was not due to the downbeat performance of a heavyweight companies. The shares of most companies slightly lost their values and three of them weighed heavily on the TEDPIX at the end of the day.
Persian Gulf Petrochemical Industry Company left the most negative impact on the TSE’s gauge. Eghtesad Novin Bank and Saderat Banks were other market laggards on Monday.
694m Shares Traded
In spite of the TSE’s shaky sentiment, both trade value and volume dramatically soared on Monday. More than 694 million shares changed hands, valued at almost 2.47 trillion rials. The TSE was, therefore, witnessing close to 100 and 300 percent surge in trade volume and value, respectively.
According to the Financial Tribune analysis, institutional investors were the key players during Monday’s trade, with more than 68 percent contribution both in selling and garnering of shares.
The lowest average Price Earnings (P/E) ratio of the equity market here has triggered mass garnering of undervalued shares, while the continued shaky behavior of unsettled investors pushes them to get rid of shares despite heavy losses they may bear as a result.
It should be noted that TSE’s exceptionally low P/E has always been a double-edge sword, pushing unsettled investors to make random decisions, like fleeing away to competing markets including the currency market in a bid to hedge their bets. However, veteran investors snap up the chance, garnering rock-bottom shares, though taking diversification into consideration at the same time.
Stock-Picking Strategies
Tracking the overall performance of the listed industries at the equity market, following the global economic developments and other internal and external contributors can practically help investors to pick securities they deem profitable.
When it comes to personal finance and the accumulation of wealth, so many indicators may cross investors’ mind, however the unexpected economic volatilities are a great concern.
Value Investing
The strategy of selecting stocks that trade for less than their intrinsic values. Value investors actively seek stocks of companies that they believe the market has undervalued. The TSE is already representing such firms, as institutional investors always snap the bargain in a twinkle of an eye. Monday’s trade has proved the theory, when institutional investors garnered Persian Gulf Petrochemical Industry Company shares.
Qualitative Analysis
Fundamental analysis has a very wide scope. Valuing a company involves not only crunching numbers and predicting cash flows but also looking at the general, more subjective qualities of a company. Company’s performance in the long-run, management, and positioning at the relevant industry are some of the key factors.
Growth Investing
A strategy whereby an investor seeks out stocks with what they deem good growth potential. In most cases a growth stock is defined as a company whose earnings are expected to grow at an above-average rate compared to its industry or the overall market. Market analysts have always urged investors to precisely determine companies’ quantifiable aspects, considering internal and external factors are likely to affect them.
According to market analysts, patience is an essential tool that investors should be equipped with in a bid to avoid irregular trade behavior. Moreover, in such a volatile market, long-term approach should always be the case.
