The main index of Tehran Stock Exchange, TEDPIX, lost 72,180 points and fell 3.65%, the highest since the past five months. TEDPIX closed session at 1,903,259 points.
TSE has lost 8.4% of its gains and more than 6,500 trillion rials ($30 billion) of market capitalization in four consecutive sessions of bear market, according to market data from the Tehran Securities Exchange Technology Management Company.
The value of retail trade plunged meaningfully reaching the lowest since early June. Total deals by retail traders stood at 82.20 trillion rials ($373 million) on Saturday, indicating that there were few buyers for long lines of sale orders.
While current market trends could be easily linked to external factors that have triggered massive sell-off since last Monday, market observers opine that such factors only sparked the downward trend as Tehran stocks had reached a “saturation point” and were prone to a correction after solid gains earlier.
Disagreement between two ministries over the setting up of an exchange-trade fund last week, the large-scale offer of shares in the portfolio of the so-called Justice Shares and a lethargic currency market are among external factors that may have negatively impacted the market.
Bearish trend started last Monday after the Iranian Privatization Organization unexpectedly announced that it would cancel a plan to offer the government shares in four refineries via ETF.
The IPO blamed the Oil Ministry for being uncooperative which was denied by the latter. While both bodies later announced that the ETF plan is restored, the development gave rise to uncertainty among investors and cast doubt on the government’s frequent declaration that it would support the bourse come what may.
There are also reports that offers outweighed demand at the market as some brokerage companies offered investors stocks from the Justice Shares portfolio, causing disruption in balance of supply and demand.
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.
The holders of Justice Shares now can trade 60% of shares and need a brokerage to sell it in the market.
TSE Trade
About 7.73 billion shares valued at 92.82 trillion rials ($421.91 m) changed hands at TSE on Saturday.
Persian Gulf Petrochemical Industries Company contributed the most to the benchmark's fall, followed by Mobarakeh Steel Company, National Iranian Copper Industries Company and Esfahan Oil Refining Company.
Tamin Cement Investment Company gave the biggest boost to the benchmark index, followed by Omid Investment Bank, Zar Macaron Industrial Group Company and Asia Insurance Company.
IFB Down 2.79%
Iran Fara Bourse main index IFX lost 571.6 points, or 2.79%, to close Saturday trade at 19,909.65.
About 2.14 billion securities valued at 47.27 trillion rials ($214.9 m) were traded at the junior equity market.
Marun Petrochemical Company, Gohar Zamin Iron Ore Company, Shahid Tondgooyan Petrochemical Company and Esfahan Steel Company had the most negative impact on IFX.
Arya Sasol Polymer Company gave the biggest boost to IFX, followed by Day Insurance Company, Vitana Company and Yazd Rubber Industries Complex.