The positive impact of the 1401 budget on the capital market / ‌ The way in which government bonds are sold on the stock exchange will change

According to the economic correspondent of Fars News Agency, in the days when the stock market did not react to the good news, it finally reacted positively to the 1401 budget in order to put aside the downward trend that it had been taking for months.

Next year’s budget, which many experts consider to be one of the best budgets for the capital market, has been able to enter the stock market in an upward phase.

Alishahi, a capital market analyst, believes about the impact of the 1401 budget on the stock market: Next year’s budget should be considered from several perspectives, one is the decrease in sales Papers The debt is by the government in 1401, this year the government could sell 132 thousand billion tomans of securities on the stock exchange. This number has reached 88,000 billion for next year. That is, the figure has dropped significantly. The decline in sales of these bonds is positive news for the capital market. But one thing to pay attention to is how and when to sell securities on the stock exchange. If, as in 1999, these bonds are sold on days when the stock market is at its peak, it could still cause the market to fall.

In the following, you will read Fars’s conversation with Shakur Alishahi.

Fars: As the first question, what is your analysis of the situation and conditions of the stock market in the past months and weeks?

Alishahi: As we have seen, the stock market situation has not been very good in recent months and especially in recent weeks, and most people are leaving the capital market. This is largely due to the uncertainty of the new government’s plan for the stock market. If the government and the Ministry of Economy clearly announce their plan for the capital market and this plan has an implementation schedule, we can hope that the current trend of the capital market will change and the shareholders will hope for good days. But for now, the only positive thing about the stock market is next year’s budget, in which the government has given good support to the stock market. In general, in response to your question, I have to repeat the same basic sentence that the stock market situation is not very good.

* The stock market is not a priority for the government’s economic team

Fars: In your opinion, what are the reasons for what happened to the stock market? Why is the capital market in such a state after a great period in terms of the large number of shareholders and money entering it?

Alishahi: There are several reasons for this, each of which has affected a part of the market. The first problem goes back to the government’s economic planning. That is, the priority of the government’s economic programs in the field of economics is not clear, or if it is clear to the governments themselves, the stock market is not their priority. Of course, it should be said that in this regard, the expectation was that the stock market and the capital market would not be among the priorities of the new government’s economic team. Controlling inflation, controlling the budget deficit, reforming the preferred currency and supporting production are among the new government’s economic priorities. In the meantime, leaving the capital market alone was a viable option.

In other words, there are more important issues than the stock market that the government must address first and then go directly to the stock market. But government decisions in other areas, such as controlling inflation and the budget deficit, are indirectly linked to the stock market, and the impact of this contractionary behavior on the stock market has been partly due to the recent decline in recent weeks. But with the government sending the budget bill to parliament, it has created little hope for improving the stock market situation among shareholders.

* Real money is deposited in fixed income funds

Fars: In recent months, we have witnessed the outflow of money from real shareholders from the capital market. Can this trend of withdrawing money from the stock market and reducing transactions be related to the same issue that you mentioned?

Alishahi: Yes. We saw a different trend in the stock market from June to September this year. With the new government in office and the identification of economic priorities and the absence of the stock market in these priorities, one of the predictable events was the departure of small shareholders and real money from the stock market.

Capital is moving towards the center of the economy. The stock market has become an economic priority, which is why the outflow of money has intensified in recent months. Of course, it should also be noted that this trend has been the outflow of money from stocks, and at the same time we have seen the entry of real money into fixed-income funds in the capital market and bank deposits. That is, given the 18-month decline in the stock market, people are looking to create a risk-free process of identifying profits and investments. In other words, with the events of the stock market, investors are looking for a safer place than the glass hall to get their money in and a space Make a safe investment for yourself.

* Until the stock market reaches a safe point, we will see the outflow of money

Fars: How long will this process of withdrawing money from the capital market and entering fixed income funds and banks continue?

Alishahi: Of course, this process will continue until the government’s economic policies are determined. After that, the shareholders who have left the capital market will decide to put their money back into the high-risk stock market or stay in the same fixed income funds or banks. Capitals are now waiting to see what happens. These events cover all areas, whether political, economic, international, etc .; So this outflow of money from the capital market continues until investors reach a safe haven in their minds; In the current situation, they are looking for a place to invest that is low risk, that is, until the state of the economy and the capital market reaches a reasonable point, they make low-risk investments to see what happens in the future.

* Confidence in the capital market depends on periods of boom and bust

Fars: What are the effects and consequences of the decrease in confidence that has occurred in the market for the stock market?

Alishahi: Decreasing trust is a cycle, if you look at the market from the past, when the market is booming, money usually enters the market, in such a situation, they say that trust in the market has increased. It cannot be said that trust goes up and down, the market that thrives, money comes to the market, and the market that goes into recession, money comes out of it. This is the case in all markets. When there is no buying or selling in the coins and the foreign exchange and housing markets, or there is a recession, is it said that there is distrust in the housing market? No. No confidence, its prosperity has diminished. So the entry and exit of money from the market has a cycle. This is also due to the fact that every market has a boom and bust cycle, and I think the outflow of money is normal in the current situation. But what can we do to get out of the recession and what can we do to restore confidence and reduce this recession and go to prosperity? It is a matter of separation that must be addressed. When we go to the boom, capital enters the capital market, that is, trust is back.

* Pay attention to various industries for the prosperity of government stock exchanges

Fars: What measures should be taken to end this period of recession and enter the period of boom in the stock market?

Alishahi: To do this, we must first pay attention to different industries. Of course it does, it’s done. In the budget of 1401, some attention was paid to industries, but it was large. That is, we were talking about petrochemical feed and mine ownership coefficient, which were not supposed to increase. This shows that the government has a glimpse of industry; But it must pay more attention to industry. If this attention and support is done properly, we can hope that the production of different industries will increase, which will also help them to be able to increase their production. As production increases, their sales will grow. Under such circumstances, and if these things are done correctly, prosperity will return to the market.

* Monitoring the implementation of the budget is more important than how it is approved

Fars: Next year’s budget has been sent to the parliament, what effect can the 1401 budget have on the capital market?

Alishahi: Budget can have a huge impact on the capital market. Important Most The issue in the budget is transparency, which must be clearly stated in the budget, how much budget each section is allocated to it and how it uses it. In the matter of budget, it is not just a matter of allocating to different sections. But in the continuation of how this budget is spent, it must also be considered. That is, whenever the budget is allocated, it must be monitored how and in what way this budget is spent. Suppose the same budget is approved by the parliament. After the approval, how it should be spent and should be closely monitored, my emphasis is on this issue, the allocation is limited and there are sanctions and the country has problems, we all know. But this allocation that is given, the parliament also carefully examines all these allocations, and after the finalization, a monitoring should be done whether the expenses have been done correctly or not? If there is more oversight, the efficiency of this budgeting and its impact on various economic sectors, including the capital market, will increase.

* Change the way government bonds are sold on the stock exchange

Fars: Some experts believe that next year’s budget will create good conditions for the capital market? What do you think about this?

Alishahi: You see, next year’s budget must be considered from several perspectives. One decrease in sales Papers Debt by the government in 1401. This year, the government could sell 132,000 billion tomans worth of securities on the stock exchange. This number has reached 88,000 billion for next year. That is, the figure has dropped significantly. The decline in sales of these bonds is positive news for the capital market. But one thing that needs to be considered is how and when the bonds are sold on the stock exchange. If, like in 1999, this issue is sold on days when the stock market is at its peak, it could still cause the market to fall. In other words, if the same few bonds are sold badly in the market, that is, suddenly dropped in the market within two months, this will create a problem for the market. It can be good and positive news for the capital market if they bring it to the market over time and plan to do so.

The second thing we need to say about the impact of the budget on the stock market is the inflow of money into the market stabilization fund. If the money injected into the fund circulates properly in the market, that is, where the market needs to inject money, and where they see that the market has money, they slowly withdraw the money and keep it for days. That the market will still need money can be an important event in the capital market. The capital market is now a market that really needs money, and if suddenly this money enters the market without management and remains without a source in the future, this is the worst way to work. The source of the fund should be slowly introduced into the stock market and taken out slowly so that the least amount of turbulence occurs in the stock market. The capital market is like a well, and if all of a sudden all the resources enter the market, the market swallows it and there is no source to hold the market. These Rial resources are important to how to manage.

* We will not see rapid growth or decline of the stock market

Fars: As a final question and considering the positive budget events, how do you see the short-term trend of the stock market in the future?

Alishahi: I do not think that much will happen in the short term and a special trend will be formed in the market. The market will fluctuate in the area it is in now, and I do not think there will be any particular trend in terms of positive or negative. We should not expect a sharp rise from this market, which is facing liquidity problems. Or vice versa, there will be a big drop in the market. In other words, I do not think there are any rapid trends in the market. But it is more likely to be upward than to be downward; Of course, we have to see if the government’s economic priority moves towards the stock market or it will be the same as in previous months. Of course, if the government has other economic priorities, it can not be taken lightly, because there are many problems and it must prioritize to solve these problems.

end of Message/