Why did the shares of the automotive industry fall in the stock market?

According to Tejarat News, the stock exchange experienced a growth of more than three thousand units today until 11 o’clock and stood in the range of one million and 287 units.

It has been about 18 months since the decline of the capital market. During this period all industries Exchange Cars in particular had a downward trend. This is while the price of Pride alone has almost doubled during this period.

Why are the shares of this group still cheap with the increase in car prices? In which market has investing in a recent year been more profitable than investing in the automotive industry?

The efficiency of the automotive industry in the stock market is not low

“If we want to calculate the one-year return of the markets,” Ebrahim Samawi, a financial markets expert, told Tejaratnews. The best market for investing in a car is housing, and finally the stock market.

Referring to the return of car shares on the stock exchange, he explains: Pride prices have doubled in recent months; But car stocks are declining.

The financial market expert continues: The financial statements of the Pride family show that they have a negative net profit. This means that the selling price of the product by the factory is low and the factory loses money by selling Pride. As a result, one should not expect the stock company to sell its products at a loss.

“Increasing car prices does not necessarily mean making a profit,” says Samawi. Many companies continue to recognize huge losses as prices rise.

Referring to the growth of the stock market in 1999, the financial market expert says: “At the time of the market rise, a lot of cash flow was injected into the automotive industry and they had a very strange jump.” Because Dara Fund was to be offered with stock shares.

“We should not expect emotional growth right now because these industries are unprofitable,” he said.

Finally, Samawi says: “By comparison, we can say that over the past year, cars, housing and, ultimately, investing in the stock market have been profitable in the first place.”

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