TEDPIX Sinks to 4-Month Low on 2nd Bank’s Comeback

EghtesadOnline: Tehran Stock Exchange’s main index plunged by 0.72% to end Wednesday trade at a four-month low of 77,414.9.

News ID: ۷۳۹۵۸۰

02 February 2017

After breaking the 78,000 resistance level early in the morning, TEDPIX continued to decline slowly, until it fell by 560.50 points on 15:35 UTC.

The main force behind the decline was Bank Tejarat’s return to TSE. By market’s close, its shares shed 33.76% to 665 rials per share.

Tejarat was the second of four banks to resume trading after a near seven-month suspension. It followed Bank Mellat’s footsteps, whose return to trading last week caused one of TSE’s worst routs–TEDPIX nosedived 1.28% on January 24 and Mellat shareholders lost $947.3 million, according to Financial Tribune.

The trading symbols of the four banks, namely Mellat, Saderat, Tejarat and Post Bank, were frozen since July by the Central Bank of Iran and the Securities and Exchange Organization.

For years, the banks were giving out dividends that had no real financial backing, since they were using unpaid loans and debts in their profit calculations. In order to put an end to this practice, the banks were mandated to prepare their financial statements based on International Financial Reporting Standards before being allowed to hold shareholder meetings.

IFRS is a single set of accounting standards, developed and maintained by the International Accounting Standards Board.

Market sentiment was heavily dented. Investors were righteously pointing to the duality of banks offering 20-22% of interest on deposits, while posting sudden significant drops in share value.

According to Ali Khosroshahi, Amin Investment Bank’s senior asset management and investment analyst, CBI and SEO are treading a wrong path by waiting a week to relist each bank’s shares.

“Keeping the investors waiting for months was wrong in the first place, and now the gap between banks’ trade resumption is making it even worse. If not in a single day, they can at least make it happen in a single week,” he told Financial Tribune on the phone.

“CBI and SEO seem to be struggling to prevent more shockwaves in the market, which this will only cause more uncertainty for investors.”

Khosroshahi ruled out the possibility of any considerable market gain till the yearend (March 20, 2017).

Bank Saderat and Post Bank are still bound to return.

TSE, IFB Wednesday Report

More than 1.4 billion shares valued at $51.9 million changed hands for the day.

Bank Tejarat incurred the biggest loss among all TSE-listed companies.

Tehran Derakhshan Company was the biggest riser, going up 5% to 4,117 rials per share.

Bank Tejarat weighed the most on TEDPIX, followed by Persian Gulf Petrochemical Industries Company and Chadormalu Mining and Industrial Company.

National Iranian Copper Industries Company gave the biggest boost to the benchmark, followed by Khorasan Steel Company and Iran Transfo Company.

The Price Index plummeted by 196.10 points or 0.72% to stand at 27,090.7.

The First Market Index lost 473.60 points or 0.86% to post 54,772.5.

The Second Market Index shed 767.80 points or 0.46% to reach 165,745.2.

The Industry Index gave up 156.60 points or 0.24% to register 66,318.6.

The Free Float Index wiped 718.83 points or 0.84% to hit 84,835.80.

The TSE 30 Index nosedived by 35.70 points or 1.13% to settle at 3,116.6 while the TSE 50 Index dropped by 25.90 points or 0.84% to finish at 3,042.2.

Also, the over-the-counter Iran Fara Bourse’s main index, IFX, shed 0.64 points or 0.08% to end Wednesday trade at 849.6.

Close to 279 million securities valued at $31.7 million were traded at the over-the-counter exchange for the day.

Tuka Rail Company saw the highest number of traded shares, as 22.9 million of its shares changed hands.

Pegah Golpayegan Dairy Company had the highest trade value, with the trading of shares worth $1.1 millio.

Pegah Golpayegan Dairy Company, Iran Cultural Heritage and Tourism Investment Corporation and Kerman Development and Construction Company had the highest value increase.

Tuka Paint Company, Tuka Refractories Company and Tuka Rail Company suffered the highest decline.