A capital market analyst believes that nine-monthly reports of listed companies will give more in-depth information about their direction which in turn should help bring analysis-oriented decision-making back to the market.
Sina Soleimani, investment manager at Novin Investment Bank Consultant Company , said the reports, due in the coming days, would be a better gauge than the half-yearly reports currently available, Security and Exchange News Agency reported.
He said the decline in demand for shares and investors' retreat from the capital market in the wake of companies' market value being adjusted with an exchange rate of 75,000 to 80,000 rials to the USD in the secondary market (instead of much higher open market rates) was nothing extraordinary and was expected.
On the other hand, increasing systematic risks in the market at the same time as the imposition of new US sanctions plus ambiguities surrounding currency policies have lowered the Price Earnings Ratio expectations in the market.
After losing 2.8% of its value on Monday, the Tehran Stock Exchange almost wiped out all gains it had made at the beginning of autumn.
Soleimani added that the recent global decline in the oil price – also a factor behind TSE's fall - is beyond economic logic and reason and the black gold will once again go back to its heydays.
He attributed the oil price fall more to political factors and less to economic developments as “none of the influential factors in oil the market can explain a $40 decline in barely two weeks.”
Mounting Pressure
He expressed optimism over global oil price prospects and maintained that with the deadline for Iran’s oil export waivers drawing closer, the US is endeavoring to reduce oil prices and mount pressure on the government in Tehran.
But after the expiration of the exemptions and emergence of signs of supply shortages in the oil market, it could be said that crude oil would return to the $60-65 range sooner than expected.
Earlier this month, the United States re-imposed bans on Iranian oil exports after announcing its withdrawal from the Iran nuclear deal in May. The agreement, negotiated in 2015, traded a reduction in international sanctions on Iran for limitations on its nuclear development program. The Trump administration’s renewed embargo targets Iran’s petroleum and shipping industries and places tough restrictions on financial transactions that are critical to the country’s oil and natural gas exports.
Soon after Trump announced the new sanctions regime, his team granted waivers to eight countries—among them the largest importers of Iranian oil— China, India, South Korea, Japan, and Turkey.
Soliemani said the moves by jittery investors and stock market's so-called "negative over-reaction" to events have led to the reduced analyzability of the market and caused a selloff.
He hoped that with companies publishing nine-monthly reports the return of logical behavior across the market would ensue and investment trends will be premised on informed analysis.
