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8.3 Stock market
Tehran Stock Exchange smashes through 2mn points threshold
TSE booming into stratosphere. Data shows €3bn invested in TSE in two months
Capital generation
The Tehran Stock Exchange’s (TSE’s) main index, the Tedpix, smashed through the 2mn mark on August 2, the first time ever it has moved past the threshold, IBENA reported.
Amid Iran’s economic dire straits, investors continue to pick out one of the few profit-making spheres of investment, but anxieties that a massive bubble is building up, ahead of what would be a devastating burst for an economy already under immense pressure, have not gone away.
The Tedpix on the record-setting day at one point gained 49,871 points, or 2.54%, to 2,011,493.
Iran’s clerical rulers have been encouraging ordinary Iranians to invest in local stocks to help lift the country’s economy, hard hit by US sanctions.
Iranian authorities have denied that there is a bubble in the stock market.
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. The recent market gains are clearly under heavy scrutiny, with some investment experts suggesting a correction may be ahead.
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.
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.
Iran - Financial market as of Jan 2020 as of Jun 2019 as of Jun 2018 as of Dec 2017
Equity market index: Tehran Stock Exchange (TEDPIX)
427,139 248,533 111,528.2 95,561.5
Market capitalisation: % of GDP
23.9% (2017) 23.9% (2017) 25.7% (2016) 22.7% (2015)
Market cap: Tehran Stock Exchange 327.20 (Dec 224.85 100.66 105.98 (TSE) (USD bn) 2019)
PE ratio: TSE 8.60 8.41 6.76 7.01 Source: CEIC
40 IRAN Country Report August 2020 www.intellinews.com
