Tehran Stocks Suffer Further Decline

EghtesadOnline: Tehran’s share market opened trading week on Saturday in negative territory amid stress among investors about what lies ahead.

News ID: ۷۵۰۷۷۵

23 August 2020

The benchmark of Tehran Stock Exchange, TEDPIX, shed close to 30,000 points and fell 1.7% to close trade at 1,727, 264 points.

TSE lost 11% last week and dropped more than 8.3% during the last calendar month that ended August 21, to post the highest monthly decline in 20 months.

While fear of a prolonged downturn is overwhelming the market, slight hope prevails as investors expect the regulator to intervene soon and save the market from imminent collapse.

Members of the High Council of Securities and Exchange met last Monday to find a way out. The outcome seems promising for investors.

Head of Securities and Exchange Organization Hassan Qalibaf- Asl spoke about measures to support the market, including restrictions on selling the so-called Justice Shares in the market to balance supply and demand.

In addition, listed companies are instructed to temporarily suspend offering shares as free floating stocks, IRNA reported.

Supply outweighed demand in the past few weeks after brokerages offered investors stocks from the Justice Share portfolio.

Justice Shares are shares of government-owned companies that were given free to the six lowest income deciles almost fifteen years ago. Shareholders were not allowed to sell the shares until last May.

In the same vein, Shahin Cheraghi, a member of the bourse council, said “the council closely monitors the capital market and protects retail traders”.

In addition, Hossein Selahvarzi, also a council member, pointed to “smart support” to the market and tried to reassure investors that “the current downturn is merely a correction in prices and not a market collapse”.

While many shares were still under sell-off pressure on Saturday, the burden eased on some blue chips, including metal and mineral stocks, as institutional traders stepped in and boosted the demand side.

TSE Trade

About 9.5 billion shares valued at 128.3 trillion rials ($570.23 million) changed hands on Saturday.

Trading at TSE and over-the-counter Iran Fara Bourse starts on Saturday and ends Wednesday.

Sabanour Mining and Industrial Development Company was the biggest winner as its shares went up 5.99% to 52,040 rials per share. Melli Industrial Group Company incurred the biggest loss among all TSE-listed companies and went down 5% to 755,830 rials per share.

Persian Gulf Petrochemical Industries Company contributed the most to the benchmark's fall, followed by Social Security Investment Company, Tamin Petroleum and Petrochemical Investment Company and Omid Investment Management Group Company.

National Iranian Copper Industries Company gave the biggest boost to the benchmark index, followed by Mobarakeh Steel Company, Golgohar Mining and Industrial Company and Parsian Bank.

IFX Down 2.13%

Iran Fara Bourse main index IFX, lost 399.63 points, or 2.13%, to close Saturday at 18,378.14.

About 1.56 billion securities valued at 39.52 trillion rials ($175.65 million) were traded at the junior equity market.

Esfahan Steel Company had the highest number of traded shares as 203.65 million of its shares worth 1.56 trillion rials ($6.93m) were traded.

Arya Sasol Polymer Company, Marun Petrochemical Company, Saba Tamin Investment Company and Esfahan Steel Company had the most negative impact on IFX.

Omid Taban Hour Energy Management Company gave the biggest boost to IFX, followed by Iran Office Machines Industries Company, Day Insurance Company and Sarcheshmeh Copper Investment Company.