Stock market prediction on Tuesday 25th of February 1401 / Is the stock market caught in a recession trap?
According to Tejarat News, the total index of the Tehran Stock Exchange increased by 2,298 points on Monday and reached 1,548,000 points with a low growth of 0.15%.
The equal weight index went up by only 1,926 units and stood at 482,779 units with a growth of 0.40%.
Performance of stock markets
On Monday, more than seven billion 624 million shares, rights of preemption and securities worth 40 thousand 646 billion rials were traded in the Tehran Stock Exchange. On the other side of the market, the total OTC index went up by 74 points and reached the level of 20,170 points.
More than 6 billion and 605 million stocks and bonds were traded in this market. The number of over-the-counter transactions was more than 223 thousand 26 times.
Transaction value
On Monday, the capital market witnessed transactions worth 250 thousand and 474 billion tomans in total in both stock and over-the-counter markets. Despite recording this large number in the statistics of capital market transactions, the value of small transactions was only three thousand and 702 billion tomans!
This figure decreased compared to Sunday and indicates the continuation of the downward trend in the value of small transactions, especially during the last 10 days.
The last time was on the 1st of February that the stock market experienced small transactions with a value of more than 10 thousand billion Tomans. Since that date, however, the market has gone downhill and the value of retail transactions has decreased drastically.
The downward trend in the value of small transactions has strengthened especially in the last two weeks, until now it has returned to the stagnation channel of three thousand billion tomans.
Withdrawal of real money
It should be noted that on Monday, the stock market witnessed the change of ownership of 153 billion tomans from real to legal, so that for the 18th consecutive day real money left stocks, preemptive rights and mutual funds.
Although these days, the intensity of money outflow has decreased, but from the 27th of January until now, only one day, and that too in the amount of 25 billion Tomans, has been recorded in the market.
This is despite the fact that, especially since the beginning of February, the process of money inflows to fixed income funds, which allocate the largest share of their investment to the money and debt market, has intensified.
Capital market experts warn that while most of the listed companies are in a good condition to attract capital, the government should not introduce a new risk to the capital market so that the country’s economy can benefit from the capacities of this important pillar for development.
Stock forecast for Tuesday
For two days, the price of the dollar has risen again and is lurking to conquer new channels. Even the statements of Mohammadreza Farzin, the head of the central bank, could not stop the price of the dollar in the open market from rising.
However, today the stock market has not reacted to this upward trend. Some market observers believe that the reason for this is Farzin’s re-emphasis on the price of 28,500 tomans, which is the calculation base of companies’ operations.
In the meantime, some say that with the re-growth of the dollar, which has boosted the gold and coin market, part of the investment demand has moved towards these markets.
Especially, the behavior of the government and parliament during the next year’s budget has discouraged capital market investors regarding the growth and profitability prospects of companies. Accordingly, capital market experts warn against re-entering the capital market and stock trading into recession trap.
In the meantime, the inflation rate is still high, the expected inflation is growing and it seems that the central bank is not successful in suppressing the dollar price. In this way, some capital market activists believe that the stock market can still be attractive for short-term investors at least in the current period.
However, the market is still at a crossroads and sellers’ bottoms are relatively heavy.
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