TSE Fastest-Growing Stock Exchange in World

EghtesadOnline: Tehran Stock Exchange was the world’s fastest-growing stock market, the results of a survey conducted by TSE analysts who monitored the benchmarks of 17 global exchanges from March 21 to Aug. 8 showed.

News ID: ۷۸۳۶۶۹

14 August 2018

TSE’s main index, TEDPIX, rose from 96,298.9 to 131,521.6 to register a 36.6% growth during the period under review.

The all-share index was also the world's best performer in both the 30 and seven days leading to Aug. 8, as it gained 18.6% and 6.1% respectively.

The TSE survey also indicates that TEDPIX gained in 63 of its 89 trading days under review. This puts the benchmark index above all other global exchanges in terms of gaining trade days, Financial Tribune reported.

The main factor contributing to Iranian stocks' strong momentum has been the devaluation of the domestic currency.

The rial lost about 30% of its value against the US dollar in the last fiscal year (March 2017-18) and kept bleeding even after the government pinned the rial/dollar exchange rate at around 4,200 to tackle the freefall. Each USD is currently being traded at around 100,000 rials in the open market, down from 34,000 early last year.

For the stock market, a weaker rial meant devaluation of market cap and bargain share prices. It also spelled profit for leading exporting stocks like those in metals and petrochemicals.

A ballooning money supply, as a result of years of high bank deposit rates, meant that there was enough money to lift TEDPIX to new heights.

This also means that the stock market's growth is not a reflection of a prospering economy. If anything, only a few exporting sectors are bound to gain from a weaker currency and even they might lose that edge when US sanctions against Iran are back in full force.

US President Donald Trump pulled out of the 2015 Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action, in May. The first wave of unilateral US sanctions came back on Aug. 6 and the second wave will kick in on Nov. 4.

The closest another benchmark index got to TEDPIX was Mumbai's BSE 30 with an overall growth of 15.1% from March 21 to Aug. 8. Also called the S&P BSE SENSEX, it is a free-float market-weighted stock market index of 30 companies listed on Bombay Stock Exchange.

The 30 component companies, constituting some of the largest and most actively traded stocks, are representative of various Indian industrial sectors.

The world's third fastest-growing exchange index was London's FTSE 100, which grew 10.4% during the period. The Financial Times Stock Exchange 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. It is seen as a gauge of the UK businesses' prosperity.

Next was Amsterdam's AEX with 7.9% growth. The index is made up of 25 Dutch companies that trade on Euronext Amsterdam, formerly known as the Amsterdam Stock Exchange.

New York's NASDAQ was the fifth index in terms of returns, as it gained 7.4% during the period under review.

The sixth place went to Saudi Arabia's TASI with a 6.5% growth, followed by Tokyo's NIKKEI 225 with 5.4%, New York's S&P 500 and Paris' CAC 40 with 5.3%, New York's Dow Jones Industrial Average with 4%, Germany's DAX with 3.4%, Tokyo's TOPIX with 1.4% and Spain's IBEX 35 with 0.9%.

Shanghai's SSEC had the worst performance, as it dropped 16.3% during the period. Next were Istanbul's BIST 100 down 16%, Hong Kong's HANG SENG dropping 10%, Dubai's DFM with a downturn of 7.4% and Kuala Lumpur's KLCI lying low at 2.3%.