The weeklong losing streak at Tehran Stock Exchange eventually came to an end on Tuesday after TEDPIX notched up 48.1 points or 0.07% to close at 66,489.5.
According to TSE data, the price index ticked up 19.2 points or 0.07% to end at 26,545.8. The first market index edged down 3.2 points or 0.01% to settle at 47,641.3. The second market index gained 326.9 points or 0.24% to 139,240.9. The industry index perked up 13.3 points or 0.02% to 54,653.2. The free float index advanced 20.8 points or 0.24% to stand at 75,622.6. The TSE 30 index added 5.1 points or 0.17% to 2,963.8 and the TSE 50 index was up 2.3 points or 0.08% to 2,723.1.
Daily trade volume and value were almost flat, as more than 486 million shares changed hands valued at close to $33.31 million.
About 44% of listed companies contributed to TEDPIX’s uplift, including large-cap stocks. Islamic Republic of Iran Shipping Lines with 28.7 points gave the biggest boost to the main index followed by Bank Tejarat and Bank Saderat.
Bank Karafarin with -46.7 points was the biggest market laggard followed by Shazand Petrochemical Company and Behshahr Industrial Development Corporation with -21 and -6 points respectively.
Market analysts believe that TEDPIX has already notched enough lows recently and that Tuesday’s uptrend is likely to continue. Fundamental headwinds are not hindering the performance of the equity market anymore, though lingering uncertainties keep weighing on TSE pending the removal of sanctions (imposed against Iran over its nuclear energy program).
Iran and six world powers came to a nuclear agreement on July 14 to end more than a decade of dispute over Tehran’s nuclear energy program. As part of the deal, sanctions imposed by the US, EU and the UN Security Council against Iran are set to be lifted early 2016.
Lagging Indicators
Much to the astonishment of prevailing expectations, after the nuclear deal was announced, stocks entered correction phase and squeezed the benchmark to wipe out 4.39% in a seven day losing streak.
Lack of liquidity, wobbling economy, irregular selloffs, annual general meetings of listed companies and alleged manipulation of the equity market were to blame for the bewildering retreat of the benchmark.
First Vice President Es’haq Jahangiri announced in April that overdue debts to banks had reached an unprecedented amount of 800 trillion rials ($30 billion), calling it “a major obstacle to proper banking practices.”
The sagging economy is still exacerbating recession in almost all industries. However, as soon as sanctions are lifted, foreign direct investment is expected to gradually revive the economy.
Speculations about a bull market following the nuclear deal did not pan out amid irregular selloffs by institutional investors who lined up to get rid of presumably risky shares.
The annual general meetings of most of the listed firms did not meet investors’ expectations either and were accompanied by negative adjustments or unappealing dividends.
