Page 40 - IRANRptJul20
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million mark
TSE booming into stratosphere. Data shows €3bn invested in TSE in two months
Capital generation
generated “bubble” panic among investors that took share prices lower.
The TEDPIX all-share index on May 19 reached 1,001,220, up 0.61% d/d. Confectionery, cosmetics and pharmaceuticals company Pars Minoo was the biggest winner. Its share price leapt 59.11%. Next best performer was Zahravi Pharmaceuticals, with a 14.21% gain.
Mellat Investment Bank saw the biggest share price loss. It was down 6.2%. Maker of circuit breakers and disconnectors Pars Switch fell 4.74%.
A total of 1.38mn trades were conducted on the market on May 19, with shares worth Iranian rial (IRR) 10.3tn ($58.1mn at the free market rate) exchanged.
Nearly Iranian rial (IRR) 450tn (around €3bn at the free market rate) has been invested in the TSE since the March 20 start of the 2020/2021 Persian calendar year, Iran’s Securities and Exchange Organisation (SEO) said on May 16.
On May 9, the exchange’s main index, the TEDPIX, crossed the million-point threshold for the first time ever. However, on May 17, the second day of the Iranian trading week, it closed at 968,460, down 1.93% d/d.
The recent market gains are clearly under heavy scrutiny, with some investment experts suggesting a correction may be ahead. Tehran-based economist Saeed Leylaz was cited by Reuters as forecasting that Iran’s stock market will rise to 1.5mn points before dropping by around 12% and then stabilising. “Iran is experiencing tough economic times ... Considering limited investment options ... the stock market is the only place where people’s capital can be protected,” Leylaz said.
The TSE has benefitted from growing interest in its potential for capital generation with other parts of Iran’s economy—including property, gold, cars and forex—laid low by US sanctions and impacts of the coronavirus (COVID-19) pandemic. The appetite of investors has partly been whetted by government moves to sell off assets to raise revenues to fight the health and economic emergency.
Lately, trading permission for ”Justice Shares” held by low-income deciles to be listed on the TSE has added to the extraordinary growth.
“The government might be able to collect cash, but people will get poorer when the bubble bursts sooner or later,” Reuters quoted a senior official at Iran’s central bank, speaking on condition of anonymity, as saying, amid warnings from some academics that a collapse on the bourse could spark social unrest as many people were withdrawing their savings to invest in shares.
The figures on the level of investment that has gone into the TSE in the past two months were provided in a live-streamed press conference by the former head of the stock exchange, and current chief of the Iranian Securities & Exchange Organization, Hassan Qalibaf-Asl. The TSE has seen a vast increase in its liquidity of more than 220% over the past 12 months.
In the past three months, moreover, brokerage firms in Iran have issued 1.6mn new trading codes for individual investors, including foreign firms that are permitted to trade.
40 IRAN Country Report July 2020 www.intellinews.com
