The stocks rout at the Tehran Stock Exchange is triggering alarm, as leading listed companies keep weighing on indices, and drag down the benchmark to stretch losses it has been piling up since April 7.
There is no end in sight to the slowdown that is rippling through listed industries at the TSE amid severe sanctions – imposed by the West against Iran over its nuclear energy program –hanging over different sections of the economy, and poor performance of listed companies including the high-yielding ones. Unsettled investors are scrambling to take shelter in rival markets. The persistent pullback at the TSE has caused thousands of dollars to flow out, effectively draining the equity market.
Despite the fact that the equity market is gearing up to host international fund managers once the sanctions are lifted, the dramatic retreats, the bearish sentiment, regional tensions, and speculations about a prospective nuclear agreement is keeping the inventors on the edge.
The TSE overall index wrapped a seesaw trading day in red at Sunday’s close, and notched down 64 points or 0.1 percent to settle at 63,363.8. The first market index lost 38.7 points or 0.08 percent to 45,798.1. The second market index was down 177.8 points or 0.14 percent to 130,246.2. The free float index slipped 20.1 points or 0.03 percent to 72,691.8. The industry index retreated 65.9 points or 0.13 percent to 52,131.7, and the blue-chip index as the only positive contributor to the TEDPIX ticked up 3.3 points or 0.11 percent to end at 2,907.4.
Despite recent upbeat news about the equity market’s limit up-limit down price band, the monthly issuance of listed companies reports, and a cut in interest rates, bearish sentiment is still reigning over the equity market, with a slump in trade volume and value.
TSE data illustrates that more than 357 million shares changed hands, valued at around $20.6 million, with Zamyad Company - an Iranian commercial vehicle manufacturer – leading the highest trade volume.
More than 62 percent of listed companies at the TSE underperformed, with Khorasan Steel Company (KSC) leading the list of market laggards. The KSC with 34.12 points in downbeat performance had the most negative impact on the REDPIX. Mapna Group, and Islamic Republic of Iran Shipping Lines, with around 30 and 26 points took the second and third place respectively.
Sevetral other giant companies at the TSE, including Persian Gulf Petrochemical Industry Company and National Iranian Copper Industries Company, also weighed on the benchmark.
Mobile Telecommunications Company (MTC) of Iran, with Price to Earnings ratio of 3.7, and 29.48 points gave the biggest boost to TEDPIX. Parsian Oil and Gas Development Company, and Bandar Abbas Oil Refining Company with close to 21 and 20 points respectively followed the MTC.
