Economy, Business And Markets

TEDPIX Hits Record Low as Stocks Slide Headlong

TEDPIX Hits Record Low  as Stocks Slide Headlong
TEDPIX Hits Record Low  as Stocks Slide Headlong

Massive gain evaporation at the Tehran Stock Exchange (TSE) eventually dragged down the benchmark to notch a record low within the past 15 months at Wednesday’s close.

Indices kept losing ground, and pushed the overall index to settle at 68,970, hitting a new record low, spurring concern among both individual and institutional investors.

A steeper-than-expected drop since November 12 at the equity market, accompanied by a persistent bearish trend, pushed the benchmark to nosedive and lose more than 10 percent, according to the Financial Tribune analysis.

Stocks’ uncertain sentiment due to the limping economy has made investors feel that the economy could fall back into a recession.

Market analysts indicate that the recent 4 percent economic growth along with other positive economic indicators means that all that glitters is not gold, referring to the imminent budget deficit to the dramatic plunge in crude price.

Despite the fact that so many of the shares are below intrinsic value, given the lowest average Price Earnings (P/E) ratio at the equity market, stocks kept caving on lingering worries.

According to TSE data, the benchmark tumbled 284.5 points or 0.41 percent to end at 68,970. The first market index slipped 189.3 points or 0.37 percent to settle at 50,914. The second market index plummeted 693.1 points or 0.51 percent to 134,948.9. The free float index was down 339.9 points or 0.43 percent to 78,974.2. The industry index dipped 172.4 points or 0.3 percent to 57,877.2, and the blue chip index shed 9.7 points or 0.31 percent to finish at 3,095.4.

More than 506 million shares changed hands during Wednesday trading, valued almost 1.27 trillion rials, indicating a brief surge in both value and volume of trade, though the TEDPIX’s unprecedented freefall has put investors on the edge.

Mine and Metal Development Investment Company (MMDIC) topped the volume of trade; however, it had the most positive contribution to the TSE’s gauge. Eghtesad Novin Bank and Saipa Diesel took the second and third places in terms of trade volume, respectively.

The MMDIC as well as Tamin Pharmaceutical Investment Company had the most positive contribution to the TEDPIX; yet, the lingering ambiguities dragged down the benchmark.

The Persian Gulf Petrochemical Industry Company once again topped the market laggards, as has been the case within the past few days. The company had the highest negative impact on the TEDPIX. In addition, MAPNA and Eghtesad Novin Bank were the other listed companies dramatically weighed on the benchmark.

Cloudy atmosphere over the prospect of the economy and the ongoing downtrend of the oil price spooked investors and triggered massive selloffs over the course of past couple of months. Based on the trade volume, equity market’s liquidity has found a way out due to the rival markets’ fluctuations.

Moreover, banks’ annual 22 percent interest rate along with fixed rate bonds with the same interest rate has curbed enthusiasm for listed firms’ shares at the equity market.

To conclude, new economic plans announced by the officials and positive indicators didn’t bring hope for investors. It means that such factors are not likely to change the TSE’s sentiment.