Tehran Stocks Sober Up, End Week Higher

EghtesadOnline: This week saw one of the main Tehran equity market's uncertainties come to a close, as the United States announced its refusal to waive key economic sanctions on Iran as part of the 2015 nuclear deal.

News ID: ۷۴۵۲۹۲

12 May 2018

US President Donald Trump made the announcement on Tuesday, referring to the deal formally known as the Joint Comprehensive Plan of Action as "decaying and rotting".

Despite the bad news, Tehran stocks did not have much of a reaction. Tehran Stock Exchange's benchmark TEDPIX inched up slightly on Wednesday while Iran Fara Bourse's IFX had a slight downtick.

And overall, markets did not end up losing for the week, Financial Tribune reported.

TEDPIX gained 79 points or 0.1% during the week that ended on March 9 to close at 93,691.2 and IFX gained 12.9 points or 1.2% to stand at 1,069.9.

A sober reaction from sensitive investors was rather unexpected. Most analysts believed that the market did all the selloff it needed while speculating about the fate of JCPOA in the past few months.

Nevertheless, the new development did investors some good by eliminating the uncertainty.

In fact, the equities' freefall expected from the US pullout already happened over the last month and a half, as TEDPIX lost 2.83% from the beginning of the new fiscal year on March 21 up to Thursday's close.

> Foreign Currency Volatility

The official USD/IRR rate is still pinned at 42,000 rials by the government, and consequently, one can hardly gauge the market's response to the US pullout for the currency.

However, unofficial reports said the rial dropped to an all-time low of 75,000 to USD on Wednesday, before closing the day at about 66,000.

Things were more transparent for euro and the benchmark Bahar Azadi gold coin, with both finishing the week higher with a spike on Wednesday.

The gold coin reached an all-time high of 20.5 million rials on May 5, yet bled the next two days to 18.5 million rials over. The US announcement to pull out of the JCPOA made the coin rebound, however, and finished the week 4.48% higher to 19.59 million rials.

Euro, too, followed the same pattern of rise and fall, with the only twist being its all-time high on Thursday's close. Rial dropped 8.42% during the week to euro to an unprecedented 79,300 rials.

> Weekly Trade in Detail

Over 5.63 billion shares valued at $349.1 million were traded on TSE last week. The number of traded shares and trade value grew by 139% and 141% respectively compared to the week before.

TSE’s First Market Index gained 223 points or 0.3% to end at 66,697.4. The Second Market Index dropped by 775 points or 0.4% to close at 198,754.8.

And at IFB, over 1.28 billion securities valued at $220.8 million were traded, with the number of traded shares and trade value growing by 61% and 15% respectively compared to the previous week.

IFB’s market cap gained $112.3 million or 0.3% to reach $36.3 billion.

Its First Market witnessed the trading of 84 million securities valued at $3.52 million, indicating a 54% and 53% uptick in the number of traded securities and trade value respectively.

About 501 million securities valued at $29.5 million were traded in the Second Market, with the number of traded securities and trade value rising by 44% and 78% respectively week-on-week.

Over 7 million debt securities valued at $152.9 million were also traded at IFB, growing by 4% and 1% in the number of bonds traded and their value respectively.

Exchange-traded funds were also up 50% in trade number and 65% in value to reach 25 million worth $8.5 million.

Housing mortgage rights’ trade reached 50,000 securities worth $7.26 million, marking a 39% and 44% growth respectively.