Tehran: Investors Lose Trust Over Pricing Flip-Flops

EghtesadOnline: New developments in the Iranian capital market seem to have stemmed in large part in the mercantile exchange. The same trend was seen last week with the oil-product pricing conundrum.

News ID: ۷۸۳۹۴۲

10 September 2018

The lost faith does not seem to have returned to the market, as the accumulation of good news did not lead to solid gains for stock market players in last week’s trade.

Tehran Stock Exchange's all-share index, TEDPIX, inched up 242 points or 0.2% during the week that ended on September 7 to close at 137,714.2.

Iran Fara Bourse’s benchmark index, IFX, gained 23.5 points or 1.5% to stand at 1,579.9, Financial Tribune reported.

> IME Setting the TSE Course

Two weeks ago, National Iranian Oil Refining and Distribution Company announced that its products were to be priced in Iran Mercantile Exchange on the basis of Secondary Forex Market.

IME prices are set based on a formula that includes the forex price. But it backed down after two days, leaving investors in dismay. As a result of inconsistent decisions on the part of NIORDC, all the major players, base metals and petrochems as well as oil products, lost the trust of investors.

Last week, however, saw another boost in the index on Sunday and Monday for precisely the same reason as last week: Oil product price ceiling was announced to have been removed. The smaller industries, cement, paper and such, whose upward trend had come to a halt earlier in the week followed suit, gaining on the same axis as the stock giants, the Donya-e-Bourse weekly reported.

The base metal symbols performed poorly on the closing day of the trading week, apparently bleedding in reaction to the worldwide downtrend of base metals, as well as the price ceiling imposed upon steel products in IME.

The new regulation set the base price of steel products at 5% below what it was, but allows for an additional 5% of change in pricing each week.

Just like last week, smaller industries are enjoying a steady growth in their value, as capital holders are becoming more willing to take chances with less grandiose shares.

> Weekly Trade

Over 13.32 billion shares valued at $233.94 million were traded on TSE last week. The volume of traded shares increased by 14%, while trade value decreased by 12% compared to the week before.

TSE’s First Market Index gained 26 points or 0.09% to end at 101,317.3. The Second Market Index increased by 1,211 points or 0.44% to close at 274,937.6. The price index went up 61 points or 0.2% to settle at 40,271.5, while the industry index went up a meager 51 points to end the week at 125,847.8.

TSE Free Float Index gained 499 points or 0.3% to settle at 146,897.7. TSE top 30 and top 50 lost 34 (0.5%) and 21 (0.4%), closing at 6,696.4 and 5,949.6 respectively.

At IFB, over 4.02 billion securities valued at $154.05 million were traded, with the volume of traded shares increasing by 5% and trade value decreasing by 0.02% compared to the week before last.

IFB’s market cap gained $250.59 million or 2% to reach $14.19 billion.

Its First Market witnessed the trading of 348 million securities valued at $6.45 million, registering a 28% decline in trade volume and a 32% decrease in trade value.

About 1,486 million securities valued at $35.93 million were traded in the Second Market, registering a 6% and 27% decrease in trade volume and trade value respectively.

Over 12 million debt securities valued at $75.89 million were also traded at IFB, showing an increase of 10% in volume and 15% in value. Exchange-traded funds traded 54 million shares worth $5.16 million, registering an increase of 26% in volume and a 3% downturn in value.

Housing Mortgage rights registered an 8% decline in volume and a 5% decrease in value, as their trade reached 400,000 shares worth $1.98 million.