Iran Capital Market Monthly Wrap!
Finally and after 4 months of continuous corrective movement of Iran Capital Market, the major index, TEDPIX of Tehran Stock Exchange turned green. It seems with a more stable political outlook and a better than expected hopes over the general recovery of the Iranian economy, the negative sentiment on equities are about fade and the market will rise and shine once again. Eyeing the new consensus report of market top analysts, it is obvious that the expected EPS for most of market sectors have lifted up compare to the September report. Moreover, most analysts believe a stable environment on other parallel markets, housing – FX – gold, which favors the sentiment over the capital market.
The total monthly trade value now reached IRR 426,000 bn showing a 300% rise. Also the daily trade value hovers around IRR 20,000 bn which is far better than expected after the September market crash. Over November, the net cash inflow from the retail side to the market also turned positive after all.
The P/R ration on the housing market reach 44 which is bad news for the sector’s investors. The market is experiencing one of its most deep recession these days which could take longer than usual to recover. The total trades’ volume has plummeted almost 50% which deepens the resection even more.
The government has passed the next year budget bill for a parliament ratification which seems to be rejected as the new bill could increase the total deficit by more than 30% for the nest year. Unfortunately, all the possible outcomes of the next year budget would end up in a +30% inflation, therefore, a more slow devaluation of IRR is not farfetched in the loge run. It is widely believe that after the settlement of the US rejoining the JCPoA euphoria, devaluation of IRR will be continued.
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