Iran's CB to Help Lift Stock Market
EghtesadOnline: Following sharp falls in the Tehran stock markets throughout last week, a senior bank official spoke about a plan to help support the market by granting loans to investors for purchasing shares.
Central Bank of Iran's deputy for supervisory affairs, Farhad Hanifi, made the statement Friday on the sidelines of a meeting of the High Council of Securities and Exchange, headed by the Minister of Economy Farhad Dejpasand. The session was held to prop up the bourse when the market reopens Saturday after the Iranian weekend, according to Financial Tribune.
It has been decided to offer loans to customers for investment in the stock market, Hanifi said, adding that applicants would soon receive the financial assistance, Securities and Exchange News Agency reported.
“We are here to announce the CBI’s support for the capital market,” Hanifi said, outlining the reason behind the rare participation of a senior banking official in a bourse meeting.
“The CBI and Securities and Exchange Organization are two arms of the economy with the shared goal of funding companies.”
Two Iranian stock markets, namely Tehran Stock Exchange and over the counter Iran Fara Bourse along with stock markets across continents took a drubbing last week following the escalation of political and military tensions in the strategic Persian Gulf.
The downturn continued throughout of the week as tensions lingered before investors in and outside Iran took a sigh of relief after US President Donald Trump on Wednesday backed away from a potential war with Iran.
Perturbed investors rushing to sell shares and the lack of buyers for almost all equities led the main TSE index (TEDPIX) to drop more than 30,000 points, or 8%, over the past week.
Leaving behind a highly tense week, stock market investors hope that bulls will open the market on Saturday. Trading at Iran’s stock market starts on Saturday and ends Wednesday.
The bourse’s supreme council meeting was held on Friday to review stock market developments, performance of natural and legal entity investors and the status of listed companies.
Hoping for the Better
It assigned the SEO board members to decide on the price spread for in this week’s trade. The relentless selloff pushed capital market officials to narrow the price spread from the normal 5% to 2% on Wednesday.
After the meeting, the SEO boss Shapour Mohammadi, expressed the hope that trade in the stock market will reach a balance this week in light of continued support of legal entity investors.
Mohammadi appreciated the role of financial institutions, legal entity traders and investment companies for their efforts to help revive the stock market during the crash, though it was not classified as such.
The stock market regulator had asked investment funds last week to use their financial resources to boost the main index and prevent further plunge in the visibly vulnerable market.
Investment funds have pumped billions into the bourse to buy big-cap stocks that traditionally have the most significant impact on TEDPIX.
Capital Market Stability Fund and the Capital Market Development Fund were among the funds that were given special mandates to intervene in the stock market.