Three sides of sustainable growth of the stock market / Is the stock market suitable for investment? – Tejarat News
According to Tejarat News, it has been about three months since the Tehran Stock Exchange began its upward trend, and during this period, the total index of the stock exchange was able to break the ceiling of 2019; In this way, the market index has quickly entered the range of two million and 500 thousand units.
All market indices and industries have recorded very good growth during this period; Even some of the individual shares of the market had a return higher than inflation.
According to many experts, these record breaking events are the only way to compensate for past losses and the capital market has been able to reach balance by this means. After this, the glass hall can have an upward trend and is the best market to maintain capital value, especially in inflationary conditions. According to these conditions, it is expected that the liquidity entry to the stock market will increase and finally we will witness the stable growth of the market and indices.
Why is the stock market suitable for investment?
Bahman Fallah, an expert on financial markets, told Tejarat News about the growth of the stock market: “Given the stagnation of other markets and the growth of liquidity, it can be said that liquidity will not find a more suitable market than the stock market to operate.”
He explained: “For two reasons, the stock market is a suitable market for liquidity; First, the bank interest (money market) is lower than inflation, and second, the capital market can include inflationary growth. That is, investors can consider inflation as the minimum growth on their assets.
This capital market expert continued: “Currently, some market industries are making profit with 28,500 tomans and others with half a dollar. There is an expectation that if the mandatory pricing of the currency is removed and the dollar grows by half, eventually the capital market will be able to take into account inflationary growth in addition to the dollar rate and p/e, p/s and nav ratios.
Fallah emphasized: “At the current stage and according to investors, the stock market is a shield against inflation.”
How long will the stock market remain bullish?
Referring to the growth of the stock market, he said: “The stability of the growth of the capital market is due to the management of the stock exchange organization, legal and real estate, and these form the three sides of a triangle.”
This capital market expert continued: “If these three sides behave rationally and rationally and their decision-making is objective, the stock market can register a reasonable growth.”
Fallah stated: “According to the nav and the financial ratio of the companies in general, it seems that the stock market has the potential to grow until the end of the assembly season.”
Referring to the growth of the market, he said: “The reason for the growth of the capital market these days is due to the intrinsic value of the companies.” “Now the glass hall is making up for past losses and there has been no particular growth in the market.”
This capital market activist explained: “Given the increase in industrial rates and the expectation of an increase in the price of half a dollar, 28,500 tomans and the growth of liquidity, it is expected that the stock market will have a stable and rational growth.”
The stock market is waiting for new initial offerings
Fallah said about the initial offerings: “The custodian can manage the volume, value of transactions and the upward trend of the market with the initial offering. Because IPOs have the potential to attract liquidity.”
He continued: “Nearly 50 companies are in line for the initial supply since last year. If these supplies intensify, another condition for the sustainable growth of the stock market will be fulfilled, and the events of 1999 will not be repeated in the market.”
In response to the question of what is the stable growth of the stock market, this capital market expert said: “The stable growth of the glass hall is conditional on the development and increase of the depth of the market.”
In the end, Fallah emphasized: “The most important issue of the market now is the acceleration of the primary supply, because it can help the competition of real and legal entities and increase the floatation of stocks.”
According to the conditions of the capital market, it seems that the increase in supply can help to increase the liquidity and depth of the market. On the other hand, the increase in liquidity and the depth of the market will also bring more profit to the shareholders than before.