The value of small transactions is still not enough for the growth of the stock market/ the low yield of the stock market is the reason for the lack of liquidity

According to the economic reporter of Fars news agency, analysts believe that the need for Tehran Stock Exchange to grow is people’s trust in this market and investment in it. However, actions are still taking place around the Tehran Stock Exchange, which increases people’s mistrust of this vital market.

In the last two months, the central bank has tried to resist the increase in the demand of banks by increasing the interbank interest rate, which leads to an increase in the monetary base. The increase in interest rate has been one of the main factors for the decline of the Tehran Stock Exchange index in these two months. On the other hand, reducing inflation requires an increase in production and ultimately the prosperity of the capital market.

The stock market has had a downward trend in the past weeks, and this problem has increased the stagnation and the withdrawal of real money from the stock market. If the process of capital withdrawal from the stock market continues, it can create a bigger problem for shareholders. Many experts consider the lack of liquidity in the stock market as the cause of the downward trend in the stock market.

* The main weakness of the stock market is its low depth

Mojtaba Danshi, in an interview with the economic reporter of Fars News Agency, said: The capital market is an effective financial institution in the country’s economy as a whole. In the condition that this market enters a normal and growing flow with proportional efficiency, first of all the production and finally the economy of the country will be supported.

He continued: Comparing the Tehran Stock Exchange with the financial markets of developed countries, we see that the main weakness of the Tehran Stock Exchange is the low depth of this financial investment.

This capital market expert emphasized: One of the main reasons for not investing in the stock market with stagnant funds that are in people’s hands is the low yield of this market compared to the country’s inflation.

* Reducing the negative trend of the total stock market index

The total index of the stock market in the second week of August was also accompanied by a downward trend, but this negative trend was accompanied by a decrease compared to the first week of August. The total index of the stock market decreased by 2 thousand 827 points on Saturday and 17 thousand 389 points on Sunday.

On Monday, however, the market trend changed and brought an increase of 4,109 points to the shareholders. On Tuesday, the index grew again and stood 2,416 points higher. On Wednesday, this index broke the growth record of the last two weeks and grew by 7,339 points.

Finally, the total index of the stock market decreased by 6 thousand 352 units and reached the level of 1 million 437 thousand 360 units. The yield of this index in the second week of August was minus 4 percent.

* Returning small shares of the capital market

In the second week of August, the total homogenous index dropped more than three times. This index was accompanied by a drop of 2,251 points on Saturday and experienced a decrease of 7,241 points on Sunday.

But like the total index, the total weighted index increased by 386 points on Monday and 227 points on Tuesday and reached the highest level in the last two weeks on Wednesday with a growth of 3,466 points.

The total homogenous index finally dropped by 5,413 units and reached the level of 384,55 units and had a negative return of 1.39%.

* Growth in the total value of stock exchange transactions

The average value of the total stock market transactions in the second week of August increased by 19% and reached 42,847 billion tamanis. Last week, more than 214 thousand billion Tomans were traded in the stock market.

But the average value of small transactions decreased by eight percent and reached 2,242 billion. In total, retail shareholders have traded 11,212 billion Tomans in the stock market this week.

Despite the improvement, the value of stock market transactions is still weak and the end of the market correction cannot be declared. One or two days of positive trading after a few days of correction in the market as a whole is a natural occurrence, and due to the loss of important support, the index’s floor in a range can moderate traders’ emotions.

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