Will the stock index grow by the end of the year?
According to Tejarat News, the fluctuating situation in the capital market these days, yesterday brought the Minister of Economy and the head of the Stock Exchange Organization to the parliament to present their explanations to the people’s representatives. In the meantime, as always, promises were made that show that the market situation will improve in the not too distant future.
Mohsen Khalili, a capital market analyst, stressed that the nature of the capital market is volatile: “The capital market is subject to macroeconomic conditions.” In the short term, market behavior may be manipulated by promises, changes in laws, or something called protection, but in the long term, this is not possible not only in Iran but anywhere in the world. Of course, completing the tools by providing new licenses, accepting new companies or facilitating the entry of shareholders in the short term will help improve the market situation, but in my opinion, the market behavior in the long run is not shaped by what has been said in parliament. These conversations are just market side tools.
He continued: “Regarding the market situation in the long run, we need to see macroeconomic variables such as inflation, dollar exchange rates, global rates, political conditions and government laws and regulations on the sale of companies, how to appoint managers, how to hold meetings and… to what direction.” Side will move.
What are the ambiguities facing the capital market?
“The current challenge of the capital market is not just macroeconomic conditions,” he said. “The market is facing a series of ambiguities.” If the shareholder can predict what the situation will be like in the next six months, he will usually not buy or sell. On the other hand, everything is related to Borjam. Even the scenarios that are analyzed in the market depend on the realization or non-realization of Barjam. The market is conditioned and so fragile that it waits for the slightest news to react, both positively and negatively. On the other hand, it should be noted that the expectations created by the presence of the new team do not happen quickly, but due to the fact that these expectations fail in the short term, shareholders start selling.
Emphasizing that the alternative markets for the stock market have increased, Khalili explained: “On the one hand, the government sells securities and finances even a small amount from the capital market, causing liquidity to flow out of the market.” They are also part of the liquidity of active codes that last year caused the daily trading volume to reach 27,000 billion tomans, but now this trading volume has gone to new cryptocurrencies and markets. Another segment of shareholders who lost money in the capital market last year have returned to the traditional market of banks and bank deposits. All these events have caused the market volume of transactions to be one-fifth to one-sixth and the market to fall from its constant prosperity.
He also explained the situation of the capital market in the short term: in less than six months, the fiscal year will end and the companies’ profits will be good. The p / s remains at the heart of companies that split the following year and retake the P / E again the following year. Since the average P / E of major companies and index makers, we will have a return of about 15 to 25 percent by the end of the assembly season from the P / S. So if there is no change in other economic variables until the assemblies, the market will grow by at least 15 to 25 percent, which is more attractive than bonds with a 20 percent annual profit.
Source: ایسنا
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