The value of small stock trades hit a six-month high

19 August has arrived and now, exactly one year has passed since the registration of the historical peak of 2 million and 78 thousand units of the total index of Tehran Stock Exchange. On the first anniversary of this event, the breaking of the 8-month record of the dollar and, of course, the positive movements in the global commodity market caused the average stock price to rise by 1.4 percent; But the display is still 30 percent away from re-experiencing its historic peak.

On the one-year anniversary of its historic peak in 1999, the Tehran Stock Exchange surpassed the overall index by 1.4 percent yesterday, and now the distance from this indicator to the height experienced that year has reached about 30 percent. The increase in the dollar exchange rate and crossing the resistance of 26,000 Tomans during Tuesday’s trading was the most important stimulus for the growth of stock prices in the Glass Hall. Demand at appropriate price levels.

Hard year

One year has passed since the Tehran Stock Exchange index reached an astonishing peak of 2.78 million units, and now the glass hall thermometer is 30% away from re-experiencing this range. On a day like this last year, shareholders of the Tehran Stock Exchange may not have imagined that the unbridled growth of prices would end, but the stock market spring quickly turned into a fall, and investors hoping to make more profit than other asset markets and of course preserve their capital value from inflation. They had taken refuge in the market, waited for more than 10 months for the green color to dominate its trades, and even waited for days and months in heavy sales queues to sell their shares (despite losses).

During this period, the stock market, along with the corona, added to the pain of many Iranian families, and shareholders, in the height of despair, withdrew their remaining capital from the stock market if they could, and gave the so-called gift to its rivals or waited to see what the future holds. They are waiting. It’s been two months now that the days of red and every day are over, and despite the fact that there is still no uncontrollable excitement to buy stocks, the relative balance has returned to stock market trading. Buyers of stocks at the historic peak of the stock market, if they have a diverse portfolio of stocks of all stock exchange firms (considering their weight) are now still 30% at a loss.

But if stock prices continue to rise, will shareholders use the experience of the past year to reduce trading risk, or, as in July and August 1999, will we again see investors rushing to buy stocks regardless of price levels and, of course, one-share potentials? Can the policymaker, or is he at all willing, take a step towards an efficient market that can play a productive role in the economy by correcting flawed structures that are an important factor in creating excitement and resulting in destructive superconductivity? All these are questions for which, of course, finding answers can turn the Tehran Stock Exchange into a productive and efficient market, and of course profitable for its activists and the country’s economy.

When will the vaccinated boy return?

There is a well-known anecdote among capital market activists that is referred to as the story of the Wax boy. The waxy boy is generally a sign of the end of the uptrend in the market. It is known that Karina, one of the professional traders of the American stock exchange, sold her shares after hearing the decision of the vaccinated boy. This hot wax boy, who is the hot money, entered the Tehran Stock Exchange 99 steps in the summer. HotMoney is stray money that is quickly transferred from one market to another after receiving high short-term profits. Holders of hot money are afraid of keeping it in cash.

Inflationary expectations and uncertainty about the future are important factors in the emergence of hot currencies in the markets; Two factors that have emerged these days. These days, after hearing the inflation alarm in both monetary statistics and reports related to producers, now the dollar rate has crossed the resistance of 26,000 Tomans after 8 months, and in the political atmosphere, the situation of reviving Borjam is ambiguous. In addition to registering a budget deficit this year, the 13th government has not yet submitted its proposed cabinet list to parliament, and it is unclear what policy should be used to combat the budget deficit and sanctions. All the conditions are in place for the vaccinated boy to arrive, but it seems that the time has not yet come. Investors are still afraid of the black string of the stock market. Confidence has not yet returned to this market and its policymaker as it should. Statistics also show that small shareholders, like last year, are still not thirsty to enter the stock market, and even on the all-green days of the Glass Hall, they either do not record a positive net purchase or the amount of money they receive is not very profitable.

Signal the dollar to the stock market

Yesterday, a report addressed the effect of inflation expectations on price growth in the Glass Hall. Tuesday’s trading on the Tehran Stock Exchange was followed while the dollar exchange rate returned to the channel of 26,000 Tomans after an 8-month absence. The passage of the rate of this American banknote across the psychological border, caused us to see a strengthening of demand for dollar symbols in the stock market. Most steel symbols lined up, and in other commodity-centric industries we saw a noticeable increase in demand. Rising exchange rates could once again draw the attention of stock market participants to the developments at the Istanbul crossroads.

The exchange rate is the relative price of foreign currency to domestic currency, which has always been considered by the economic and financial community as a macroeconomic factor. This rate reflects the economic conditions of the country and is a factor for comparing the national economy with the economies of other nations. Meanwhile, due to the export and import of companies active in the stock market and the degree of their dependence on the exchange rate, exchange rate fluctuations can have different effects on the resources listed on the stock exchange and companies. In other words, if an enterprise is in demand for raw materials for the supply of raw materials, equipment and production technology, exchange rate fluctuations can change the production plans of these companies and increase or decrease the cost of products produced by these firms.

In contrast, an increase in the exchange rate has a positive effect on export-oriented companies. Accordingly, if the exchange rate, especially the dollar, rises, the products of these countries will be sold at a higher price and the exporting companies will receive more profit. Since the current result of the increase in the dollar exchange rate is estimated in favor of about 60% of companies on the Tehran Stock Exchange, the supportive role of currency growth on the future situation of the Tehran Stock Exchange is quite obvious. Of course, given the pricing of export currencies of most listed companies on the basis of the half dollar, the companies are not actually directly affected by the growth of the free dollar rate, but the continued growth of the US banknote rate in the open market can lead to an increase in the half dollar rate. The positive gap between free and semi-currencies has a significant effect on stock exchange transactions, so that following the growth of the free dollar exchange rate, with the formation of inflationary expectations, we see an increase in demand for commodities offered on the commodity exchange and thus increase their prices. Sending this positive signal to the stock exchange also naturally leads to the growth of stock prices.

A day for record-breaking trades

Simultaneously with the growth of 1.4 percent of the total index of Tehran Stock Exchange, the value of small stock transactions also broke the record by reaching the figure of 6231 billion Tomans and reached the highest level since February 17 of last year, which is far from the boom days of 1999, but from Recovers liquidity and returns investors’ attention to the stock market. Among these, two groups of base metals and chemical products accounted for one-third of the total value of trade. ‌

Breaking the real tradition

Yesterday, contrary to the usual market tradition, despite the rise in the price of most stocks, the real shareholders preferred to play more on the side of selling stocks. It seems that the persistence of some ambiguities and uncertainties has caused the real ones, who have less financial knowledge than the major shareholders, to be hesitant and to look for a better opportunity to enter the stock market. As noted yesterday, the growth of the dollar increased the attention of traders to commodity groups. In this regard, yesterday the highest net purchases were made in the subgroups of two groups of basic metals and chemical products. On this day, the metals witnessed the transfer of shares worth 60 billion and 800 million tomans in the legal to real path.

After that, petrochemicals were accompanied by a net purchase of 31 billion and 206 million Tomans of small shareholders. In total, during Tuesday’s trading on the Tehran Stock Exchange, out of 38 active stock exchange industries, the net inflow of reals was positive in 17 groups and negative in 21 other industries. Multidisciplinary industrial companies centered on Shasta and Vaghdir experienced the largest outflow of real capital. In this group, we witnessed the transfer of 96 billion and 338 million Tomans worth of shares from the real stock portfolio to the portfolio of major traders on the Tehran Stock Exchange. After that, the two groups of petroleum products and metal ores became the priority for selling real estate. Therefore, the major shareholders in these two groups made a net purchase of 60 and 40 billion Tomans, respectively.

Tuesday stock market through statistics

On the day when the general index of Tehran Stock Exchange grew by 1.4 percent, out of 339 symbols traded, the final price of 236 shares (70%) was positive and 93 shares (27.4%) were traded at negative levels. In this market, 83 symbols (24%) formed a buying queue worth 932 billion Tomans, but in contrast, we witnessed the formation of a selling queue in 16 stock symbols (5%) worth 303 billion Tomans. On the OTC market of Iran, however, on the day that Ifex recorded a growth of 1.66 percent, 137 symbols were traded, among which the closing price of 95 shares (69%) was positive and 40 shares (29%) were negative. In this market, 38 symbols (28%) formed a buying queue worth 268 billion Tomans, but 6 symbols (4%) also faced a selling queue worth 149 billion Tomans. The base market also hosted 131 symbol trades yesterday. Among these, 65 shares (50%) remained positive and in contrast, we saw trading of 59 shares (45%) in the negative range. In this market, 43 symbols (33%) formed a purchase queue worth 111 billion Tomans and the sales queue in this market was allocated to 42 symbols (32%) with a value of 567 billion Tomans.