Is the manipulation of the stock index correct? / Total index or homogeneous?
According to Tejarat News, stock exchange experts and analysts from time to time deal with the issue of stock market index manipulation and consider the market boards as the effect of this trend. Shareholders and stock market activists also believe that the government’s manipulations in the natural course of the market have caused their portfolios to have no effect on the growing trend of the overall index.
What is meant by stock market manipulation?
Some stockbrokers and newcomers to the stock market have a misconception about index manipulation. They think the government can change the numbers as it pleases by manipulating the billboards. But experts say such a thing is wrong and the concept of manipulation in Exchange Are defined differently.
Amir Mohammad Golvani, an economic expert in this field, told Tejarat News: “Some people think that, for example, the index should be 1,560,000, but now 1,540,000 has been registered on the board.” This idea is completely wrong. Such a thing is not possible.
He continued: The calculation of the index has a clear and precise formula. This formula can never be violated. Because there are index boxes that quickly realize the tolerance between themselves and the manipulated index. Therefore, it can be said with certainty that there is no manipulation of numbers, figures and formulas.
Government support for flagship companies
Gulwani stated: What as manipulation in Exchange It means that the government supports large companies and indexes in the market. In other words, with the support of the government from some companies that have a higher weight and a greater impact on the trend of index fluctuations, the stock market is manipulated.
The economist further explained: For example, it has happened a lot that we see more than 600 listed companies are negative, but the overall index is positive! This could be due to the government’s involvement in supporting a limited number of high-weight companies affecting the overall index.
He added: “On the other hand, if the total index is to be negative about 20,000 units, if the big symbols are supported, this 20,000 units will be reduced to 2,000 units.” This process is called government manipulation of market trends or total index fluctuations.
What are the exact tools for correct analysis?
Gulwani points out that the overall index is not accurate for analyzing the situation Exchange “The overall index is by no means a good measure of market analysis,” he told Tejarat News. Because the weight of different companies in the process of calculating the total index is not equal to each other. The index can be converted from negative to positive by strengthening only 50 large stocks.
The economic analyst added: “This is why it is always emphasized to put the criterion of a balanced index instead of a general index for the composition of the shareholders’ portfolio.”
He said: The reason for this point is the equal weight of all symbols in the process of calculating the weighted index. In addition, formally, it is not possible to manipulate the homogeneity index. The government can not manage the fluctuations of the homogeneous index by strengthening only a few large companies.