Stocks swung between small gains and losses on Sunday, with the Tehran Stock Exchange main index (TEDPIX) inching up 0.07% after the listed petrochemical firms contributed positively to the benchmark.
The TEDPIX clung to its winning streak, with the majority of the listed petrochemical firms settling in green on the week’s second trading day.
The overall index edged up 45.9 points or 0.07 percent in a seesaw session to stand at 66,139.2. The first market index lost 136.5 points or 0.28 percent to end at 48,880.2. The second market index soared 1,208.9 points or 0.94 percent to 130,261.9. The free float index slipped 219.9 points or 0.29 percent to 75,409.2. The industry index gained 104.9 points or 0.19 percent to 55,756.2 and the blue chip index ticked up 3.2 points or 0.11 percent to finish at 2,984.7.
Bears however still reign over the equity market, with small trade volume and value underscoring the unsettled sentiment of both individual and institutional investors.
Despite the fragile uptrend at the TSE, just close to 321 million shares changed hands, valued at almost 882 billion rials, with the majority of listed companies settling in red.
Once again, listed petrochemical companies lifted the TSE’s gauge, with the Persian Gulf Petrochemical Industry Company, Tamin Petroleum & Petrochemical Investment Company, and Parsian Oil and Gas Development Company contributing over 146, 75 and 45 positive points respectively.
The chemical industry has come under spotlight at the equity market, with the TSE data indicating that investors garnered more than 47 million shares of the sector’s listed companies, valued at almost 241 billion rials.
Based on our analysis, over 78 percent of the listed companies settled in red, with Ghadir Investment Company leading the market laggards. Iran Khodro and Telecommunication Company of Iran also dragged down the TEDPIX with almost 25 and 21 points negative impact respectively.
While the TSE’s sentiment is not bumpy, it is not on a smooth path either. Tumbling oil prices, fears of a budget deficit, global slowdown, lingering negotiations between Iran and the P5+1 are portraying a cloudy atmosphere for the upcoming months. Meanwhile, the benchmark’s dramatic downtrend, massive devaluation of stocks, and the lowest-ever Price Earnings Ratio (P/E) make it hard to imagine further downbeat at the equity market.
“The stock market is grappling with systematic risks that are inherent in the market as a whole or in some segments of the market,” said Hossein Khezli Kharazi, CEO of Noor-e-Anvar Financial Holding, adding that: “The ambiguity over Iran’s macro economy in 2015-2016 is the most crucial challenge surrounding the equity market.”
Global uncertainties have grabbed the headlines in recent months, with the ongoing downtrend dampening the prospect of profitability at Iran’s stock market. As risk-averse investors always try to hedge their bets, it is likely to witness further downtrend in trade value, with many individual investors preferring to flock to safe havens in rival markets such as banks with up to 22 percent annual interest rates.
