The TSE’s main index (TEDPIX) kept paring losses on Sunday to notch up to a new record high since February 18, with the equity market underpinned by fresh fund inflows that were unleashed following encouraging news over the ongoing talks between Iran and the world powers.
Within four consecutive trading days, the benchmark’s winning streak wiped out almost 1.76 percent of the hefty losses incurred in the past couple of months to highlight the stock market’s positive sentiment amid optimistic speculations about the prospect of economy in the long-run.
According to TSE data, the TEDPIX staged a fresh rally, assisted by all indices, gaining 370.3 points or 0.57 percent to stand at 64,980.6 and stay in the green territory.
The first market index rose 273.1 points or 0.57 percent to end at 47,949.6. The second market index surged 727.3 points or 0.57 percent to 127,275.3. The free float index pulled up 775.2 points or 1.05 percent to become the main contributor to the TEDPIX. The industry index was up 92.3 points or 0.17 percent to finish at 53,987.8. The blue-chip index notched up 27.1 points or 0.94 percent to settle at 2,912.8.
More than 770 million shares changed hands, valued at close to 2.55 trillion rials to maintain trade volume and value almost flat in comparison with the previous trading day. It should, however, be noted that many investors scrambled to grab the opportunity and shore up their portfolios with the leading companies’ shares having the lowest ever Price Earnings (P/E), though unsettled shareholders are not avid to get rid of shares.
Ghadir Investment Company and Golgohar Mining and Industrial Company recorded the highest volume of trade as their shareholders lined up to get rid of their shares.
The financial sector once again surpassed other listed sectors to become Sunday’s safe haven, with Mellat Bank leading the gains with 71.54 points contribution to the benchmark’s rally. Pasargad Bank and Islamic Republic of Iran Shipping Lines followed with 57.28 and 40.31 points respectively.
Investors are still cautious, as only 54 percent of the listed companies at the TSE recorded positive performances, among them being the leading companies with the most market cap.
Apart from the market leaders, which are most likely to post outstanding reports once the western sanctions (imposed against Iran over its nuclear energy program) are lifted, the other companies’ performances are still surrounded with ambiguities.
Parsian Oil and Gas Development Company (POGDC) heavily weighed on the benchmark with 32.19 points downbeat performance. Khuzestan Steel Company and Mapna Group followed with close to 31 and 24 points to take the second and third place respectively.
Investors are highly recommended to take a variety of indicators into consideration in a bid to hedge their bets and avoid sharp losses. Observing the systemic risk is the most significant factor that is expected to lead the investors’ sentiment to managing their portfolios precisely.
Systematic risk, also known as “undiversifiable risk,” “volatility” or “market risk,” affects the overall market, not just a particular stock or industry. This type of risk is both unpredictable and impossible to completely avoid. It cannot be mitigated through diversification, only through hedging or by using the right asset allocation strategy.
Tackling unexpected losses, picking up the right shares, mapping mid-run performance of listed companies, or sectors are likely to be achieved, given macroeconomic parameters taken exactly into the consideration.
Tracking different sectors’ capacities, relevant indicators that weigh on each industry, global economic growth, oil price, feedstock price, latest developments in rival markets such as currency market, and banking interest rate are all part of a strategy that both individual and institutional investors can rely on.
