Tehran Stock Exchange Closes 5-Day Winning Streak

EghtesadOnline: With the stock market making new inroads, the main index of the Tehran Stock Exchange for the first time climbed above 220,000 points on Wednesday to close the trading week 1.6% higher.

News ID: ۷۴۷۲۱۸

04 May 2019

According to Donyaye Bourse website, reports about rationing gasoline, launching short selling in the capital market and selling 70,000 barrels of heavy crude oil on the Iran Energy Exchange on Tuesday, are also responsible for the upbeat trend in recent days.

Fars News Agency reported Tuesday that the fuel rationing plan has been approved by the Supreme Council of Economic Coordination – a body comprising heads of three branches of government to address major economic issues.  It claimed the rationing plan would start today (Thursday). The Oil Ministry on Wednesday afternoon denied the rationing dateline.

The news, however, could be a major boost to refinery stocks because market analysts say after implementing the rationing plan gasoline prices in the second market will rise, Financial Tribune reported.

In addition, reports about raising the official currency rates gave a big boost to bank stocks.  Unofficial reports said the Central Bank of Iran and lenders agreed that the rates of currency assets need to be equivalent to the average forex rate at Nima (the integrated forex Deals system).

Nima is a platform where exporters sell their currency earnings at prices lower than open market rates and importers buy it.

Based on the available data, banks stocks were higher both in value and volume compared to other groups. During the trading month to April 21, Tejarat Bank and Mellat Bank topped the list of best-perfuming stocks with trade values at 5.7 trillion rials ($39 million) and 4.8 trillion rials ($39 million) , respectively,  accounting for 4.5% and 3.8% of the total value of TSE trades.

Flow of new liquidity into the capital market has been mentioned as a driving force behind consecutive rallies in recent days amid bearish trend in other parallel markets.

Reports about the CBI decision not to raise interest rates were another factor that apparently is directing the bulk of bank deposits into the capital market.

Short Selling to Commence

In another development, the CEO of Securities and Exchange Organization Shapour Mohammadi said in line with SEO strategy to add diversity to financial instruments, short selling contracts will operate in the capital market in the near future.

Short selling means selling a security that is not owned by the seller and the seller has borrowed temporarily. It is motivated by the belief that a security price will decline, enabling it to be bought back at a lower price to make a profit.

This is while stock markets across the world closed mixed on Wednesday. European shares fell as a decline by banks and weak China factory data offset a surge in shares of chipmaker AMS, while investors waited for eurozone economic growth numbers.

The pan-European STOXX 600 index edged lower by 0725 GMT. Most major indices fell except London’s FTSE 100, which was little changed.

The S&P 500 eked out another record high close on Tuesday and capped its best four-month stretch in nearly nine years after a recent rally that helped to restore investors’ belief in the decade-long bull run.

TEDPIX Gains

Tehran Stock Exchange’s main index TEDPIX gained 3,466.95 points or 1.60% on Wednesday to end trading at 220,109.0.

More than 5.1 billion shares valued at 16.3 trillion rials ($112.53million) changed hands for the day.

Trading at TSE and Iran Fara Bourse starts on Saturday and ends Wednesday.  Tehran Stock Exchange was the biggest winner as its shares went up 6.43% to 9,737 rials per share.

Tehran Cement Company incurred the biggest loss among all TSE-listed companies and went down 4.94% to 8,516 rials per share.

JAM Petrochemical Company gave the biggest boost to the benchmark index, followed by MAPNA Group, Omid Investment Management Group Company, and National Iranian Copper Industries Company (NICICO).

Mines and Metals Development Investment Company (PJS) contributed the most to the benchmark's fall followed by Persian Oil and Gas Development Group Co. and Mobin Petrochemical Company.

The Price Index gained 999.17 points (1.60%) to close at 63,434.4.

First Market Index was up 2,543.12 points (1.56%) to post 165,340.1. Second Market Index increased by 6,953.51 points (1.67%) to reach 423,256.5.

The Industry Index went up by 3,177.73 points (1.63%) to register 198,616.7. Free Float Index was up 3,653.31 points to register 248,054.34.

The TSE 30 went up 145.80 points (1.37%) to settle at 10,763.4 and the TSE 50 gained 142.76 points (1.56%) lower to finish at 9,275.5.

Iran Fara Bourse’s main index IFX rose 0.41% to close Wednesday trade at 2,643.16 points.

Over 1.92 billion securities valued at 7.16 trillion rials ($49.24 million) were traded at the junior exchange for the day.