Tehran Stock Exchange (TSE) appeared to be rebounding with a steady early morning rally on Sunday; however, some of the gains were capped as the benchmark retreated at the end of trading hours.
According to TSE data, the overall index posted 75.9 points or 0.12 percent gains in a seesaw trading days at Sunday’s close, accompanied by a tepid surge in trade volume and value.
Most indices contributed to the TEDPIX uptrend, however the second market index settled in red to underline the current fragile atmosphere at the equity market.
The first market index rose 128.6 points or 0.27 percent to stand at 65,105. The second market index, which heavily weighs on the benchmark, pulled back 323.2 points or 0.25 percent to end at 128,126.8. The free float index was up 205.8 points or 0.28 percent to settle at 73,671.2. The industry index edged up 8.8 points or 0.02 percent to finish at 54,813.9, and the blue chip index ticked up 7.1 points or 0.24 percent to 2,931.6.
Due to the shaky sentiment of investors at the stock market, trade volume and value were somehow stable in comparison with the prior trading day. The TSE data illustrated that more than 338 million shares changed hands, valued at close to 617 billion rials.
Saderat Bank, Saipa Group’s Leasing Company and Islamic Republic of Iran Shipping Lines (IRISL) registered the highest volume of trade, however, only Saderat Bank managed to push TEDPIX up, with the other two witnessing selloffs.
Financial groups and auto manufacturers grabbed both individual and institutional investors’ attention, with Saderat Bank topping the list of TSE’s safe havens on Sunday. Iran Khodro and Saipa Group contributed 22 and 16 positive points to stand at the second and third places respectively.
TSE witnessed massive selloffs of the IRISL shares due to the unsettled investors’ sentiment. The lineup came after the recent upbeat news about easing the EU sanctions on Iran’s shipping companies, Reuters reported. The European Union’s second highest court on Thursday lifted EU sanctions on 40 shipping companies whose assets were frozen as part of the pressures put on Tehran over its nuclear program.
The General Court also lifted the sanctions on 40 shipping companies, including Hamburg-based Ocean Capital Administration GmbH, that had been placed on the EU sanctions list for alleged links to Islamic Republic of Iran Shipping Lines.
The benchmark’s recent dramatic nosedive drained invertors’ cash from the equity market, said Ahmad Reza Farahani, a market analyst in a telephone conversation with the Financial Tribune, adding that “overreaction to get rid of the shares, accompanied by lineup and selloffs, heavily weighed on the TEDPIX”.
Other market laggards were Iran Construction Investment Company and Shazand Petrochemical Company with almost 7.4 and 7 points respectively.
Mitigating Investment Risk
Authorities are striving to put the stock market back on track using practical measures aimed at bringing liquidity back to the TSE.
Recently, the head of TSE urged both parliament and the government to reduce the mining royalties, which have been proposed around 30 percent in next year’s budget bill, in a bid to mitigate the investors’ risks and lift the expectations for mining sector’s earnings, IRNA quoted Hassan Ghalibaf-Asl as saying.
“The TSE has made several suggestions for various sectors, including refineries, iron ore, and petrochemicals to slash the negative speculation about their performance in the coming year (starting March 21) arising from ambiguities in the budget bill,” told Ghlibafe-Asl.
The steps taken by the government and other concerned authorities to revive the equity market, along with the upbeat news of listed companies at the TSE may spur temporary optimism among investors, however they won’t trigger a persistent upward trend at the equity market due to the limping economy.
Gov’t-Owned Properties Sold
State-owned premises worth more than 181 billion rials were recently transferred by the Iran Privatization Organization, SENA reported on Sunday.
The highest bids at the auction belonged to Khor ski resort, with a total area of 1,149,252 square meters, with a base price of close to 79 billion rials, and a gas station in the northern province of Golestan, with a base price of 36,661 billion rilas. They were sold sold at 79.23 billion and 40 billion rials respectively.
The report also cited that the highest bid for two other gas stations located in the Golestan province, with the base price of 31,524 and 30,306 billion rials, were registered at 31,8 and 30,4 billion rials respectively.
