TSE, IFB Benchmarks Slide in Weekly Trade

Iran’s stock market was down on all fronts last week, as systematic risks, sliding oil and base metal prices coupled with heavy sales by institutional investors, and a further rial devaluation prevented Tehran Stock Exchange’s benchmark index from crossing the psychological 100,000 barrier and sapped Iran Fara Bourse’s growth.

TEDPIX shed 1,389 points or 1.4% during the week that ended on Jan. 31 to 98,133.5.

The drop for IFB was significantly less pronounced, as IFX lost 0.9 points or 0.1% to stand at 1,089.4.

Last week’s trade was dampened primarily over large-scale institutional investors’ traditional inclination toward selling, as the end of the fiscal year draws closer. Large-cap pension funds and Social Security Organization’s subsidiary companies are expected to cover their owners’ looming expenses, and there’s only a month and a half left to the fiscal yearend (March 20).

The government’s budget deficit has also pushed it toward increasing the pace of debt security issuance, which could potentially siphon money away from equities.

Meanwhile, fixed income investment funds—one of the market’s strongest buyers—have recently been limited by the Central Bank of Iran in expanding their portfolios. The move was meant to keep them from offering return rates higher than what the CBI mandated for banks earlier this year, the Persian economic daily Donya-e-Eqtesad reported.

Multifaceted pressures are expected to persist up to the yearend, which could potentially keep trade down for the next week in the absence of positive signals from global markets.

 Weekly Trade in Detail

Over 4.3 billion shares valued at $307.8 million were traded on TSE last week. The number of traded shares and trade value dropped by 41% and 35% respectively compared to the previous week.

Trading at Iran’s stock markets starts on Saturday and ends on Wednesday.

TSE’s First Market Index shed 1,355 points or 1.9% to end at 69,449.5. The Second Market Index dropped by 1,016 points or 0.5% to close at 210,329.5.

And at IFB, over 1.79 billion securities valued at $165.89 million were traded, with the number of traded shares and trade value dropping by 8% and 36% compared to the previous week.

IFB’s market cap, on the other hand, gained $928.7 million or 3.4% to reach $28.64 billion.

Its First Market witnessed the trading of 120 million securities valued at $4.54 million, indicating a 49% and 52% drop in the number of traded securities and trade value respectively.

About 326 million securities valued at $40.1 million were traded in the Second Market, with the number of traded securities shrinking by 21% and trade value rising 20% week-on-week.

Over 3 million debt securities valued at $59.8 million were also traded at IFB, dropping by 59% and 61% in the number of bonds traded and their value respectively.

Exchange-traded funds, however, grew 14% in trade number and 12% in value to reach 70 million worth $16.84 million.

Housing mortgage rights’ trade also recorded growth, as it reached 40,000 securities worth $6.36 million, up 7% and 5% respectively.

 Euro Trumps Markets in Weekly Gains

There seems to be no stopping the rial’s devaluation against euro. The European currency was again the top gainer on a weekly basis.

The US dollar came next, while gold, TSE and IFB all recorded negative growth.

Gains ranked so far this fiscal year (started March 21, 2017) remained unchanged over last week’s developments. Euro came first, followed by TSE, gold, IFB and USD.

TSE posted a 27% gain so far this year, while the figure stood at 24.4% for IFB.

The rial was quoted at 58,950 against euro by Thursday’s close. It marked a 2.78% growth for the European currency and propelled it to its all-time high against rial.

Euro’s gain so far this year reached 43.3%, having started the year at 41,120.

The US dollar, on the other hand, gained 2.5% against the rial this week to 46,740. Its gain so far this year reached 23.9%, having started the year at 37,480.

As for gold, Bahar Azadi gold coin dropped 0.88% last week to reach 14.61 million rials ($317). Its total return on investment so far this year stood at 24.7%.