Stocks edged up at Wednesday close with the benchmark notching up 0.02 percent, following a seesaw trading day at the Tehran Stock Exchange (TSE) as investors lined up over upbeat news about feedstock, to garner devaluated shares of giant listed petrochemicals.
The TEDPIX was helped by the Persian Gulf Petrochemical Industries Company (PGPIC) and the Parsian Oil and Gas Development Company (POGDC), following the Guardian Council’s ratification of a key regulation concerning the petrochemical industry.
According to the newly ratified law, Iran’s oil ministry should set the prices of gas and liquid feed delivered to the refineries and petrochemical units based on the average revenues generated from selling gas and liquid feed to the domestic and international markets, Ahmad Mahdavi Abhari, secretary of the Association of Petrochemical Industry Corporation (APIC) told SENA.
Setting feedstock prices has always been a critical issue for the industry since the high 13 cent price, which was announced last year, slashed hopes for a probable boom in the sector and triggered massive selloffs in the petrochemical shares.
“It is expected that the oil ministry, the ministry of economic affairs and finance, and the ministry of industry, mine and trade will modify the law, which is likely to get the cabinet approval by the year’s end on March 21” Mahdavi said.
If approved, the law is likely to have drastic effects on the petrochemical sector, adding competitiveness to Iran’s petrochemical commodity market compared with “rival markets in the region” and pave the way for direct foreign investment in the sector, Mahdavi added.
It should be noted that the law proposes a discount of up to 30 percent on long-term contracts with all industrial units in need of feedstock, which is expected to stimulate investment in the sector.
TSE’s Sentiment
The TSE’s indices partly contributed to pushing the TEDPIX into green, with the second market index leading the gains. However, the free float index retreated to hold back the benchmark’s further uptrend.
According to TSE data, the overall index inched up 10 points or 0.02 percent to settle at 65,939.1. The first market index lost 48.8 points or 0.1 percent to end at 48,874.3. The second market index gained 389 points or 0.31 percent to 127,714. The free float index slipped 72.8 points or 0.1 percent to stand at 75,310.2. The industry index ticked up 38.5 points or 0.07 percent to 55,366.1, and the blue chip index was up 1.5 points or 0.05 percent to 2,969.9.
With the ambiguities over the economic prospect still lingering, the TSE was witnessing another day of sloppy trade. More than 430 million shares changed hands, valued at almost 893 billion rials, which registered close to 15 percent decrease both in trade volume and value.
Pars Khodro and Saderat Bank registered the highest volume of trade due to massive devaluation, however only Pars Khodro managed to push to the TEDPIX into green.
The PGPIC and the POGDC helped the most with the TEDPIX’s uptrend with nearly 68 and 59 points positive contribution respectively.
Ghadir Investment Company, Saderat Bank and Tejarat Bank were Wednesday’s market laggards.
Hoard of Gov’t Securities
The Iran Privatization Organization (IPO) offered close to 2.4 million governmental securities, valued at almost 9.5 trillion rials, to both individual and institutional investors in the first 9 months of the current Iranian year, which ends March 21, SENA reported.
According to the report, 36 million shares, priced at 50 billion rials, were transferred within the Iranian month ending April 21. In addition, the public offerings within the next two months (April 22- June 21) accounted for 156, and 1.78 billion shares, valued at almost 1.5 and 6.8 trillion rials respectively.
Almost 107 million shares, valued at 417 billion rials, were sold via equity market towards the end of July; however, the IPO failed to transfer any shares through the equity market in August and September.
The report also noted that 43 million shares, price at 112 billion rials, as well as 257 million shares, valued at 663 billion rials, were transferred to customers in the next two months, though no securities were offered via equity market in December.
“The ongoing nosedive in the equity market, as well as the bearish sentiment of investors weighed on the IPO block offerings,” the IPO director, Abdollah Pouri-Hosseini told IRNA.
