Ambiguities keep crumpling the stocks as both individual and institutional investors are bracing themselves for more losses in the wake of massive retreats in Tehran Stock Exchange (TSE)’s overall index over the past three months.
Investors are gripped with fears over the economic prospects. Adding to their stress is the stocks’ value meltdown, which makes them stop trading and cling to shares.
All indices weighed on the TEDPIX once again to push it down 0.41 percent, and mark a record low in trade volume, which proved once again that optimism has left the equity market.
According to TSE data, close to 278 million shares, valued at almost 468 billion rials changed hands to mark a bearish trend at the equity market, accompanied by a record low in trade volume and value.
The TEDPIX tumbled further at Tuesday’s close and lost 270.3 points or 0.41 percent to stand at 65,564.7. The first market index gained 233.4 points or 0.48 percent to end at 48,255.4. The second market index was down 306.1 points or 0.3 percent to 129,230.9. The free float index plummeted 400.4 points or 0.54 percent to settle at 74,321. The industry index ticked down 167.2 points or 0.3 percent to 55,255.1, and the blue chip index pulled back 14.4 points or 0.49 percent to finish at 2,945.4.
According to our analysis, about 78 percent of companies at the TSE settled in red territory, and just 15 percent managed to settle in green.
Among the listed industries at the equity market, the financial sector has been one of the biggest losers of the past few months. Tejarat Bank with zero Price Earning ration (P/E) had the largest negative contribution to the TSE’s gauge. Mellat bank, and Chadormalu Mining and Industrial Company took the second and third places respectively.
Other giant listed companies at the TSE also weighed on the benchmark. Mine and Metals Development Investment Company, Sina Bank, Mapna Group, Mobile Telecommunication Company of Iran, Saderat Bank, and Telecommunication Company of Iran were some of the market laggards.
The Underlying Causes of Downtrend
Bears are expected to dominate the TSE for a while. Various factors and uncertainties is stoking fear among traders.
The outcome of the ongoing talks between Iran and the P5+1 is the most crucial uncertainty at the equity market, which can significantly lift the TSE’s dented sentiment. Speculations over economic growth and positive news over the feedstock prices, mining royalties, and the establishment of Financial Stability Committee also failed to trigger a persistent uptrend at the equity market.
The market analysts blame the western sanctions for the ambiguities surrounding the equity market; however, other factors such as the tumbling oil price and global slowdown have also squeezed next year’s budget bill.
Furthermore, the role of systemic risks and the investors’ unsettled sentiments toward the political and economic developments should also be taken into consideration.
OTC on Tuesday
Iran Fara Bourse or Over-The-Counter (OTC) registered a trade value of more than 1.87 trillion rials, SENA reported.
Similar to the TSE’s downtrend, the OTC’s benchmark was also accompanied by a pullback. According to OTC’s data, the benchmark inched down 5.6 points or 0.76 percent to 723.6.
More than 155 million shares were traded at Tuesday’s close, valued at nearly 1.58 trillion rials. The Iranian Investment Petrochemical Groups had the highest volume and value of trade. The largest increase in shares’ value was recorded for the ASP Construction Company; however the sharpest decline in value was registered for Mino Industrial Group’s shares. The mortgage-backed securities were traded between 800 to 830 rials per share.
