The stock market is strongly tied to the JCPOA / the government cannot deceive the shareholders
According to Tejarat News, the unprofessional statements of officials at different times have caused serious and deep damage to the body of markets such as the stock exchange. Recently, we once again witnessed the issuance of a new decree by Ebrahim Raisi in the field of the stock market, which has been met with the reaction of many experts.
According to the experts, most of the promises made by the president in the 1400 election campaign to the shareholders have not been fulfilled. This is while the government believes that the stock market situation is favorable. But almost the majority of the people of the market have another belief, which is far from the government’s claims. Hashem Ardem, an expert and capital market activist, criticized the government in a conversation with Tejaratnews and assessed the government’s performance in the stock market as unfavorable. This financial market analyst believes that the government is trying to implement demagogic policies in the market. From Ardem’s point of view, the stock market orders will not only lead to nowhere and will only cause the capital market to freeze.
In the continuation of Tejarat News’ conversation with Hashem Ardem, financial market analyst, you will read.
Ebrahim Raeesi has issued decrees in the field of capital market which had unpleasant results in the stock market. Do you think it is right for the president to constantly comment on specialized fields such as the stock market?
By the way, it is not bad that the president’s concern is that the capital market is transparent and developed. But it should be noted that today we are exactly at the same point as we were a year ago. The capital market is not an issue for the government officials except as a slogan and there are more important issues for them. However, in the field of issues that they thought were more important to them, they have performed very poorly.
In fact, it can be said that despite the positive concern of the authorities towards the stock market, what is going on now is slogan-oriented. No signal is really received except for a few superficial interviews and slogans. This is why I believe that the government is not concerned about market development.
Of course, the market has experienced such an approach during the 9th and 10th governments.
Yes, during the presidency of Mr. Ahmadinejad, the duty of the government regarding the stock market was quite clear. The president had clearly stated that he has a problem with the market as a whole, and the market knew its duty to the government. But it seems that the authorities of the 13th government assume that economic activists and markets are ignorant people. While this is not the case; Unfortunately, gentlemen don’t understand that you can’t manage the market with a few repeated words.
One of these recurring slogans is to make the market predictable for activists. Do you think this will happen?
Unfortunately, the government keeps saying that the market should be predictable. By the way, they are right, because currently the stock market is somewhat stagnant, today the market is more predictable than ever. In fact, there is no news tomorrow and the day after tomorrow, and the market is only affected by political developments.
Do you mean the erosive negotiations to revive the JCPOA?
Yes, it is true, they once claimed that we do not tie the economy to the JCPOA! But by the way, today we see that the economy is strongly tied to the JCPOA. In fact, the economy is following the same path as it was during Rouhani’s government. Even though these gentlemen make fun of Rouhani’s government, exactly the same conditions prevailed in the market during the first two or three years of Rouhani’s first government. But they slandered and slandered that the Rouhani government delayed the economic development, but they themselves did exactly the same thing.
Having said that, do you think the market situation is similar to the years 2013 and 2014 (before the JCPOA)?
Currently, the market is very similar to the state of the stock market in 2014. Fortunately, the events that happened between 1992 and 1996 have become so old that someone has forgotten them. During the years 2013 and 2014, positive news from the nuclear talks could have boosted automotive and banking companies, but this is not happening now. I emphasize again that contrary to the gentlemen’s claims, the markets are more strongly tied to the JCPOA.
What difference do you see between the current situation of the stock market and the years before the conclusion of the agreement?
The difference is that before the people of the market were hoping that something would happen in the market before the news came out. But today, the markets have kept their hands and say call us whenever there is news.
Can you explain a little more about this?
The meaning of this word is that today even the market does not anticipate any news. In other words, when there is some positive news from the JCPOA, we expect a positive week for banking and automobiles, but this does not happen. That is, the shareholders do not even hope that a positive change will take place so that the various shares of the stock market will move.
The severity of the entanglement of the JCPOA not only did not decrease, but also increased and has completely shut down everything. This issue is so deep that the market does not react to the news and positive pulses surrounding the negotiations.
Do you have an example for this uncertainty in your mind?
Yes, for example, in the market we have a ratio called price-to-earnings ratio. Currently, many shares of the market such as refineries, if they continue on their path with the current conditions, their forward p to e is 3 or 3 and a half times. There are many other stocks in other industries whose p to e is extremely low. In fact, it can be said that refinements have high value.
Of course, it should be noted that funds are substitutes for stocks. In fact, the person who does not put his money in the stock market, buys the fund. Naturally, with 50% inflation, no one will buy a fund with 20-22% interest. The fact that people gave up the 30% profit of the stock market, which is not very risky in this situation, but they buy funds in this situation.
What is the reason for this behavior on the part of market participants?
The reason is the uncertainty that exists among the people of the market.
Why do you think the shareholders have lost their trust?
It is quite clear; For example, if they say that refineries are valuable, but why don’t people buy them? In response, they will tell you that they do not trust this government. Market activists sleep at night and when they wake up in the morning, a new law is imposed, such as export duties. Or, for example, we all remember the story of the command price of the car. One day they say the lottery will be removed and the next week they cancel it. One day they say that the car will be offered on the commodity exchange, two weeks later the people start buying, but the same morning they write a letter and cancel the offer of the car.
This is why it is said that the words of the government are slogans and are nothing but empty promises. As mentioned earlier, they have practically tied the economy to the JCPOA, and the stock market has warmed up to the JCPOA negotiations much more intensely.
In fact, this government has become a bankrupt debtor who uses every opportunity to generate income for himself. Naturally, a bankrupt person cannot be trusted. Even if you understand him, you won’t lend him money because the probability of getting your money back is very low.
But Mr. Raisi had promised not to have a prescriptive approach to the economy. He constantly issues orders in this regard. Do you think that his statements are not honest or that he does not have a correct understanding of such orders?
It seems that they do not have a proper understanding of the economy. In his election slogans, Mr. Raisi kept emphasizing that I am against the command economy and the economy cannot be managed by command! In the same days, Mr. Raisi held a meeting in the Chamber of Commerce and opened this issue for people. Addressing the members of the Chamber of Commerce, he said in this meeting: “I believe that the economy cannot be managed from the back of the table by order and must be present in the field.” This comment shows that Mr. Raisi thinks that there is no problem if he goes to the square and gives orders, but the problem is that the president issues orders behind the table!
In fact, it can be said that Mr. Raisi does not have a correct understanding of economic management. Mr. President, they think that the country’s economic problems can be solved by rolling up their sleeves and entering the field. This is while issuing an order and interfering in market affairs is incorrect in any situation and it does not matter in what situation and where this order is issued.
What do you think about the economic team of the government?
Unfortunately, this problem also exists in the cabinet. The evidence also indicates the lack of effective advisors in the government and the president’s advisory circle. For example, the capital market is not as important as it should be for Mr. Khandozi and the Ministry of Economy. This makes even the so-called decisions supporting the capital market no effect of considering the interests of the market.
The government has made many slogans about transparency; What does transparency in the capital market mean? Is it possible to strengthen the element of transparency in the stock market by manipulating the law?
If transparency is meant to clarify transactions and comply with the current guidelines in the market, then it should be said that the market is transparent enough. What makes the market opaque is the illegal and unprincipled performance of the government itself. The exact reason why people are afraid of the stock market and do not trust this market is the government’s irregular interventions. In this case, there is no difference between this government and the previous government.
So do you think there is no need to manipulate the rules?
No, there is no need, the government should not tamper with the stock exchange rules and should fix its internal rules. The government should not allow anyone to implement their ambitious ideas and do trial and error in this market. Transparency is to understand the decision-making process, otherwise market instructions, supply, demand, price and financial statements of companies are clear. If someone violates, the crimes and punishment are also known.
What makes this market opaque is the opaque decision-making mechanism; According to what law and why should it be brought up that the commodity exchange should come under the supervision of the ministry of privacy? This issue is in conflict with a thousand laws. What makes not only the market but also the economy non-transparent is that it is not really clear who decides? Why does he decide and where is the cost-benefit?
what’s the solution?
If you ask me how to make this market transparent, I will answer that the market is transparent and they just need not to mess it up and destroy the rules of the game. The market should be allowed to proceed with its principles and rules and the government should not interfere in the market mechanism. Experience has proven that government intervention in the markets does not have a favorable result. In the field of the stock market, there is this issue as well, when the increased interventions have weakened the element of transparency in the market. This is while the stock market is naturally transparent and there is really no need for government intervention to create transparency in the market.
A market and so many orders
In his press conference held yesterday, Ebrahim Raisi made claims that made experts and ordinary people think. According to the head of the 13th government, the economic situation of the country has improved significantly during the one year that he took the helm of the executive branch. Raisi believes that the capital market is also in favorable conditions and the growth of the total index this year also confirms this. Apparently, he believes that extensive measures have been taken in the field of market management, including efforts to create transparency. But the experts believe that the same claims of Raishi are a sign of his lack of knowledge about the economy and especially the stock market.
Capital market analyst Hashim Ardem also emphasized many times in the above discussion that the non-interference of the government will increase transparency in the market and there is no need to change the rules. Having said that, it must be said that the issuing of new stock exchange decrees by the country’s top officials will not only open up one of the hundreds of knots in the capital market, but will only make things more complicated than what we are witnessing.