EghtesadOnline: Tehran Stock Exchange's benchmark index gained 1130.40 points or 1.27% to end Saturday trade at an all-time high of 90,469.5. The previous high of 89,500 was reached by TEDPIX back on January 5, 2014.
Mehdi Farivar, portfolio manager at Griffon Capital, believes the growth followed a logical pattern since the beginning of the current fiscal year. "The index has grown by about 2% in the last two months to reach this level from 84,600. This movement primarily started with two major developments, namely a decline in deposit interest rates and listed companies' promising performance in H1," he told Financial Tribune in a telephone interview.
Farivar believes that beyond the fundamental factors, growth is being supported by improving global conditions for miners and metal producers, as well as petrochemical producers.
However, the portfolio manager said the growth seen in the shares of petrochemical companies, accounting for a major capitalization of TSE, is partly taking place on the back of market optimism and speculation, Financial Tribune reported.
Any further growth, he believes, will be based on improving economic indicators, such as further currency devaluation, rising oil prices, commodity prices remaining at their current levels and continuation of interest rate drops, which would increase the flow of money to the market.
“If so, further growth at TSE can be logically expected,” he said
Reservation About Market Sustainability
Ali Nikoogoftar, a senior market analyst at Bazar Saham Brokerage, is more skeptical about growth in Iran’s stock market. He believes the Saturday upsurge is a result of “unprofessional trade” by inexperienced traders and cannot be counted upon to last.
“I’m concerned about that [bust] after this [boom]. A professional trader would buy on a real basis and keep the share for a few months at least. But an inexperienced trader would turn to selling fast and things will go south,” he told us in another interview.
He noted that most of the Saturday sales were by institutional investors while most buyers were non-institutional, and a large volume of trade happened in large-cap, benchmark-making shares.
“I would actually say this is the time to keep away from trading.”
The analyst emphasized that basically, not much has happened to justify the growth.
“Metal producers’ shares have been on a rising trajectory for a few days on the back of growing global prices and a continuously devaluing currency. But petrochemical producers and refineries, the new market drivers, are growing mostly based on rumors of stabilizing feedstock prices in the next fiscal year (March 21, 2018-19).”
The “oil refineries” index jumped from 272,866 in the beginning of the eighth calendar month of Aban (Nov. 22) to 319,533, recording a 14.6% jump. Over half of TEDPIX’s growth for the month was brought about by spiking refinery stocks.
Saturday Trade in Detail
About 1.47 million shares valued at $71.65 million changed hands at TSE on Saturday.
Etebar Iranian Investment Company was the biggest riser, going up 6.88% to 1,399 rials per share.
Carton Iran Company incurred the biggest loss among all TSE-listed companies, as it went down 4.75% to 6,554 rials per share.
Iran National Copper Industry Company gave the biggest boost to the benchmark, followed by Tamin Petroleum and Petrochemical Investment Company and Bandar Abbas Oil Refinery.
Mobile Telecommunications Company of Iran weighed the most on TEDPIX, followed by Telecommunications Company of Iran and Persian Gulf Petrochemical Industries Company.
The Price Index added 362.40 points to close at 29,004.8. The First Market Index was up 1037.90 points to post 64,098.4.
The Second Market Index gained 1165.10 points to reach 193,525.1.
The Industry Index scored 1099.50 points to register 79,368.6.
The Free Float Index gathered 1305.41 points to hit 97,695.30.
The TSE 30 notched up 71.70 points to settle at 3,829.6 while the TSE 50 added 53.40 points to finish at 3,694.7.
Meanwhile, Iran Fara Bourse’s main index IFX gained 14.07 points or 1.38% to close Saturday trade at 1,031.19.
Like TEDPIX, IFX is also at its all-time high.
About 368.02 million securities valued at $62.880 million were traded at the over-the-counter exchange for the day.
Esfahan Steel Company witnessed the highest number of traded shares and trade value, as 89.987 million of its shares worth $1.778 million were traded.
Arfa Iron & Steel Company, Zarin Madan Asia and Esfahan Steel Company registered the highest value increase.
Tadbirgaran-e Fars and Khuzestan, Marjankar Company and Chaharmahal Food Products and Sugar Company suffered the biggest decline.
Zagros Petrochemical Refinery, Marun Petrochemical Company and Esfahan Steel Company had the most positive impact on the IFB benchmark.
Trading at TSE and Iran Fara Bourse starts on Saturday and ends on Wednesday.