Share Market in Twilight Zone

EghtesadOnline: Tehran’s equity market plunged deeper in the red Monday as panic selling in almost all range of shares continued, raising fresh concerns about the fate of the collapsing market.

News ID: ۷۸۵۶۶۰

27 October 2020

Extending a losing streak into the seventh day, the main index of Tehran Stock Exchange, TEDPIX, shed 37,465 points and lost 2.73%.

The market-cap weighted TEDPIX closed Monday’s session at 1,336,592 points, the lowest since June 21.  The equal weighted index was down 1.23%, showing that the sell-off mood swept through both small and large caps.

After solid gains in the first four months of the current fiscal year (March-July), stocks took a nosedive since mid-August. The TSE’s benchmark had grown by up to 270% in the first four months of the current year, but now in the 8th month of the calendar year, much of the gains have faded. TEDPIX’s gains have fallen to less than 170%.

The prolonged downturn has provoked the ire of investors and worries government officials and lawmakers. Investors, mostly neophytes, complain that government officials have failed to deliver on their promise to support the market when they invited the public to buy shares and “invest their assets in the bourse”.

Now most say the plunging market is undermining public trust in the government. Addressing such concerns, lawmakers called on the chief of Securities and Exchange Organization, Hassan Qalibaf-Asl, to come to the parliament and report what is going on in the chaotic stock market and where it may be heeded.

Qalibaf-Asl was in the chamber Monday and spoke measures to boost the supply side of the market and how listed companies had taken (undue) advantage of the flood of liquidity from new investors.

“The newly listed companies made 250 trillion rials [$950 million] via initial public offerings,” he said, adding that the government too had earned big by selling its shares in listed companies to investors. “The government has sold shares worth of 320 trillion rials [$1.2 billion] this year [since March 20]. The amount last year was zero,” IRNA quoted him as saying.

A group of MPs criticized the performance of capital market authorities, the gist of which was the fact that “public trust has been undermined” due to mismanagement and lack of transparency.

Monday’s Trade

About 6.86 billion shares valued at 60.2 trillion rials ($215.03 million) changed hands at TSE on Monday. Pars Animal Food Company was the biggest winner as its shares went up 4.93% to 205,460 rials per share.

Tuka Transportation Company incurred the biggest loss among all TSE-listed companies and went down 6.77% to 16,250 rials per share.

Mobarakeh Steel Company contributed the most to the benchmark's fall, followed by National Iranian Copper Industries Company, Tamin Petroleum and Petrochemical Investment Company and Esfahan Oil Refining Company.

Pakshoo Industrial Group Company gave the biggest boost to the benchmark index followed by Khouzestan Steel Company, Zar Macaron Industrial Group Company and Damavand Mining Company.

IFX Down

Iran Fara Bourse main index, IFX, lost 205.09 points, or 1.23%, to close Monday trade at 16,470.62. About 1.39 billion securities valued at 25.98 trillion rials ($92.8m) were traded at the junior exchange for the day.

Arya Sasol Polymer Company, Sepehr Saderat Financial Group Investment Company, Esfahan Steel Company and Iran Fara Bourse had the most negative impact on IFX.

Baghmisheh Construction Company gave the biggest boost to IFX, followed by Pasargad Insurance Company, Saman Insurance Company and General Mechanic Company.