Foreign investment in Iran's equity markets is growing fast.
More foreigners are getting trading licenses and buying shares on Tehran Stock Exchange and Iran Fara Bourse. The influx of foreign money is cited as one of the minor reasons behind the rally in stocks after the lifting of sanctions on Jan. 16 when TSE rose by a fifth during the month-long rally.
According to the Central Securities Depository of Iran's CEO Mohammad Reza Mohseni, foreign investors bought 511 billion rials ($14.8 million at market exchange rate) worth of Iranian securities in Bahman (the Iranian month ending Feb. 18), according to state-owned IRNA.
That indicates a 34% jump compared to the 381 billion rials ($11 million) registered in the preceding month of Dey (ended Jan. 20).
The rise in the volume of foreign investment is small compared to the market's overall trade. Total volume rose 116% to 101.8 trillion rials ($2.9 billion) in Bahman, according to Securities and Exchange Organization's news website SENA.
That puts trading by foreigners at only 0.5% of all trading.
> Monday's Rebound
TEDPIX, TSE's main index, rebounded 0.46% from two days of losses to 77,587.70 points on Monday, official data show. Trade volume dropped 7% to 1.75 billion shares worth over 4.6 trillion rials ($133 million) compared to Sunday.
The index rose to a three-day high of 77,781 points in the first half hour of trading but slowly edged down to end a mere 353 points higher.
A more upbeat tone in international commodity markets and rising crude prices due to a shady deal to halt production increase between major oil producers and a lower US rig count helped boost Iranian equities.
Isfahan and Bandar Abbas refineries, along with lender Mellat and MAPNA multi-industry holding, were the big risers of Monday's trade.
Oil prices rose on Monday as a fall in US oil rig numbers lifted the prospect of lower crude production and a bounce in stock markets encouraged buying sentiment.
US crude futures CLc1 rose above $30 a barrel, gaining 95 cents to $30.59 a barrel by 0956 GMT, or 3.2%. International benchmark Brent LCOc1 was up 89 cents at $33.90 a barrel, Reuters reported.
In Tehran, Jam Petrochemical Company, Telecommunications Company of Iran and Fars Petrochemical Company put the brakes on TEDPIX's climb, down 3.76%, 2.9% and 1.7% respectively.
> Over-the-Counter Outperforms
IFB outperformed the TSE again. Its benchmark, IFX, advanced over 1% to 827.22 points on Monday. The index is just shy of the 13-month high of 828.55 points it hit on Feb. 9th's market close. More than 4 trillion rials (about $116 million) of shares were traded on IFB on Monday.
Tehran Oil Refinery Company and Esfahan Steel Company were the leading risers of the market, each up 5% for the day.
Oil's climb, which sent refiners soaring on Monday, pushed down gold, the main hedge against turmoil. Gold fell 2% as the dollar strengthened and investor appetite for risk increased, but the metal remained above $1,200 an ounce after a rally that pushed prices to one-year highs this month, according to Reuters.
Concerns over financial instability and the repricing of expectations for US interest rate rises have helped the metal outperform most assets so far this year with a 15% gain.
Spot gold, which posted small losses last week on profit-taking after rallying to $1,260.60 on Feb. 11, was down 2% at $1,204.30 by 1113 GMT. The fall sent benchmark gold coin Azadi down 0.94% to 9,790,000 rials. Each Azadi coin has a quarter of an ounce of pure gold.
> Brexit Rout
The rial held steady against major currencies in Tehran on Monday. However, sterling's sharp drop in international markets sent it down 0.5% to 50,150 rials, while the dollar traded at 34,690 rials.
The pound fell the most in 11 months versus the dollar after London Mayor Boris Johnson, one of the UK’s most popular politicians, said he’ll campaign for Britain to leave the European Union in a June referendum, Bloomberg reported.
Sterling dropped at least 1.1% against all its 16 major peers, reversing a gain made on Friday when Prime Minister David Cameron secured a deal on membership terms with EU leaders in Brussels and set a June 23 date for the vote.
Morgan Stanley analysts wrote on Friday that Johnson’s decision would be key for sterling, given his popularity with the British public.
