With Iran’s stock market gaining increasing traction for investors, the number of novice investors applying for trading codes is rising in tandem.
According to the Central Securities Depository of Iran data, more than 822,000 trading code were issued for investors during the last fiscal year that ended March 19, putting the total number of stock market investors at more than 11.65 million.
This indicates an average 68,500 codes a month, with the number in ascending as the year came to an end.
Accordingly, the number of issued codes rose from 55,000 per month during at the beginning of the last fiscal year to over 172,000 during the last month of the previous calendar year.
As per the CSDI report, the upward trend started from the beginning of the new fiscal year as brokerages received almost 652,000 applications during the period.
Monday marked a record in the number of codes issued when more than 100,339 people registered.
The number of applications for trading codes is surging dramatically in the run-up to the listing of the Social Security Investment Company (Shasta).
The company is touted as the largest Iranian holding company and the news of its IPO is apparently appealing to investor appetite.
Normally, large numbers of investors participate when a company goes public as investors expect high gains from investing in such shares.
Pundits point out that higher number of trading codes indicate added attraction of the capital market for new investors, especially in light of the lackluster performance of parallel markets.
The stock market in Iran has seen a dramatic surge thanks to fresh liquidity. The main gauge of Tehran Stock Exchange grew more than 200% in the last fiscal year. This is while gold and currency markets trailed behind.
Professional Investors
Reviewing the performance of investors, CSDI estimates that only 1.5 million of the trading codes regularly traded in the market last fiscal year.
This means that more than 90% of trading codes were either dormant or engaged in trade occasionally.
However, investors’ inactivity was consistent, as a relatively higher percentage of codes participated in the market when a newly listed company offered shares.
As such, in many cases large numbers of investors buy shares via IPOs, but at times only professional investors dominate the market.
Individual and real entity investors are a majority in the stock market with 84% of the total. This is while trading codes owned by legal entity investors contributed more to the value of trade, accounting for 30% of the total.
