Stock market is expected to start an uptrend: analyst

TEHRAN Stock market analyst Hossein Ahmadi believes that since prices in the stock market have not risen in line with inflation, the market is expected to start an upward trend in the near future.

Given the rise in exchange rates and inflation, the stock market index may grow to catch up, Ahmadi told IRNA on Monday.

He pointed to the recent fluctuations in the stock market and added: “In recent weeks we have seen some support from the government to improve the capital market and reduce the fluctuations of this market, which has been effective in changing some the direction of the stock market index.”

Pointing out the positive features of the government’s stock market support package, Ahmadi noted: Insuring the shares of real persons, supporting the market stabilization fund and the establishment of the capital guarantee fund were among the measures demonstrated by the Stock Exchange Organization (SEO) has not left the shareholders alone.

In recent weeks we have seen the positive effect of the measures taken by the Stock Exchange Organization and in the last two weeks we have experienced a good situation in the market compared to the past months, but we cannot say that the market transactions are completely positive in this period been, he said.

This capital market expert emphasized that from a technical point of view, the analysis of the market situation indicates a stabilization of the market index in the channel of 1.4 million points, and added: If the stock market index in this channel stabilizes for a few days, it is expected to grow to about 1.7 million points.

In late October, SEO unveiled a comprehensive support package to boost capital market activity as shareholders became reluctant to invest in the market.

One of the main measures considered in this package was the insurance of shareholder capital and dividends for the following year.

Insuring the shares of real entities up to one billion rials (approximately $2,600) per person, issuing subordinated warrants on shares of fixed income funds up to 400 trillion rials (approximately $1.04 billion), injecting new funds into the market by state funds to buy shares, the deposit of up to 50 trillion rials (approximately $130 million) of the funds approved in the national budget law for the Capital Market Development and Stabilization Fund, as well as direct and ongoing coordination, supervision and monitoring of the legal entities operating in the capital market, including corporations and quasi-government institutions, pension funds and military institutions were among the measures envisaged in the said support package.

The package also highlighted cooperation between the Central Bank of Iran (CBI) and the Ministry of Finance and Economy to manage interest rates.

Increasing SEO’s direct investments in the Capital Market Development and Stabilization Fund, restricting marketers’ activities, and suspending securities underwriting and initial offerings until further notice were also among the issues addressed in the SEO support package. considered.

Following this support package, the market entered a modest upward trend in November that lasted for almost a week.

TEDPIX, the main index of the Tehran Stock Exchange (TSE), rose 131,000 points (10.21 percent) to 1.414 million points in the Iranian calendar week ending Nov. 11.

As reported, it was the highest weekly increase during the current Iranian calendar year (started March 21).

In February, the government’s Economic Coordination Headquarters had also unveiled a capital market support package, which included measures such as lowering the price of petrochemical raw materials, cutting taxes on manufacturing companies, defining new regulations for the mining sector, raising of the capital of the Stock Market Stabilization Fund, which controls the release of government bonds and determines the banks’ exchange rate; but this package, despite the temporary positive effects, was unable to change the general trend of the market and prevent the continued fall in share prices.

EF/MA