The Tehran Stock Exchange continued to decline for the seventh day in a row on Monday, and this time fell 2.7 percent again to the level of one million and 336 thousand units to limit the growth rate of this index. Few people had evaluated the news fluctuations of the Iranian stock market in this way. In this memo, we try to examine the most important reasons for the recent decline of the Tehran Stock market. Please be with Artan Press.
*** Estimate the amount of stock market reform to date
The stock correction has reached a staggering 160 percent since the beginning of the year. But where is the end point of stock reform? Why is this reform as erosive as the period of rising prices? In other words, why do these losses exhaust the real shareholders?
*** Bitter days of the stock market in November
During the 6 consecutive days that have passed since November 1, stock exchange traders have witnessed a 13% drop in the total index of the Tehran Stock Exchange. This unprecedented decline paves the way for the index to enter the channel of one million and three hundred thousand units, and forecasts indicate a decline in the index in the coming days.
*** Continuation of heavy sales queues in Tehran Stock Exchange
Due to the existing conditions and the formation of heavy sales queues and the lack of buyers, the value of stock exchange transactions has reached less than 3000 billion tomans in the last trading day, which has practically locked the market conditions. Continuing the process of selling stocks and investors leaving the stock market forever and stoning in the process of OTC trading has made it difficult to continue investing in the stock market and has practically made the downside signals more likely.
*** Self-sanction of Tehran Stock Exchange
Just when the liquidity owners registered in the Sajam system and demanded authentication and receiving the stock exchange code in front of the counter offices. Many shareholders, some of whom have years of experience in the Iranian stock market, surpass each other, and now the excitement of selling stocks and leaving the trading floor with the greatest loss shows the format of the strategies of stock traders, which in itself It is itself a capital market embargo. At a macro level, this could indicate a lack of sufficient knowledge and precise reflections on the future of the market.
The result is that despite strong reports of the mid-term performance of the most visited companies and the growth of corporate profits, no trades are still in the forefront of the market, this uncertainty is partly tied to the US election.
*** The amount of real stock exchange liquidity
Surveys show that the real liquidity from stock trading in the last 52 business days was the only amount of money that was attracted to the stock market in the first half of September. But are micro-shareholders willing to remain shareholders? The answer to this question is one of the most important reasons for the recent stock market collapse.
It seems that the self-made restrictions of the Iranian capital market, such as the amplitude of fluctuations and the base volume, are the most important factors that have reduced stock liquidity and confined money in the glass trading halls of stock exchanges, which challenges the stock turnover process. Slowly
*** The main reasons for the fall of the stock market index
Most stock market analysts believe that the reasons for the decline in the overall index can be sought in two very important and influential issues. First, in recent weeks, people’s trust in the law, especially the government, has been severely damaged, and now stock market investors are very reluctant to invest. In practice, this market has left no room for growth. Therefore, this issue has caused emotional and domino movements in the Iranian stock market.
*** Shareholders’ distrust of the future of the Tehran Stock Exchange
Some people who no longer have the patience to invest and the so-called bear phase of the stock market, seeing all the signs of price correction, auction all their portfolios and assets and leave the world of investing in the stock market forever.
With that in mind, the Conservative Group today offered a portion of its stock portfolio that remained in the sell-off line for the past few days at a lower price. The challenge of trusting the government’s economic decisions is a challenge that may disrupt market trends in the medium term. In situations where people are market analysts and have set intervals for market profitability, they are tired of the situation and have sold some of their profits that are in profit, which in itself affects the losses as much as sales in the queue. Lays. Because with the increase of breadth in all stocks, the purchasing power has increased and there is practically no other way but to reduce the prices.
*** Changing the nature of the capital market
The capital market all over the world is inherently a market for underwriting and supporting innovative and new projects, which by investing in this sector, both investors and investors will benefit from this cooperation. In Iran, this issue suddenly changed and the Tehran Stock Exchange changed its behavior drastically after a few logical behaviors, and the liquidity created in the stock exchange was absorbed into other economic, monetary and financial spheres, and in practice, firms that should not do business. Entered the game of monetization, and when a bank thinks of monetization while the main task of that institution is something else, no better situation can be imagined.
*** Holding organizations in the stock market
With the entry of holding organizations in the Tehran Stock Exchange, the path that liquidity had to take to become large capital and advanced industries, turned into buying and selling stocks in the market. In a way, the owners of liquidity were afraid of the devaluation of capital due to the numerous factors that occurred in the Iranian economy, which inevitably sent a significant amount of money to investment markets, especially the stock market. For this reason, the stocks of most companies are several times their intrinsic value, which is contained even in the most optimistic analyzes could be priced. After some growth, it was not the intrinsic value of corporate stocks that dominated the stock market, but the liquidity pressure that rocked the market. And the stock market had virtually no choice but to follow this emotional path.
*** False charm in the days of Corona
On the other hand, in parallel with the implemented policies and sanctions, as well as the outbreak of the Corona virus, which accompanied many industries and businesses with severe challenges in terms of trading restrictions and reduced shifts, etc., the stock market was able to achieve this amount. Accept liquidity and a large amount of money to enter this market intelligently and emotionally together.
*** Emotional offering of shares in Iran Stock Exchange
Some market participants believe that the large volume of supply in yesterday’s trading is due to the sale of equity shares. With the decision of the government, it is possible to sell another 30% of justice shares (and a total of 60% of the total shares) from this week, and as a result, the aggregation of sales shares of justice shareholders has led to increasing sales growth in the market. In other words, a balanced and bullish market today was a good opportunity for brokerages and banks to sell their stocks, increasing shareholders’ fears about the future.
*** Severe disruption of the trading core
Another important factor that gave rise to distrust in the trading atmosphere in the green days of the market was the severe disruption of the trading core, which warned cautious shareholders from heavy trading and effective presence in the stock market. Lack of popular and inaccessible symbols The opening of brokerages was the last sign of the stock market for profitability, which created the initial potential for exit.
*** Leverage to increase the exchange rate
Some believe that the growth of corporate stocks was due to emotional expectations for an increase in the exchange rate, especially the dollar, and due to the excitement caused by the unprecedented devaluation of the national currency, this growth in corporate stocks. By lowering these expectations, along with the devaluation of the dollar in the world and domestic markets, this hypothesis was invalidated and practically provided the ground for the stock market to begin its downward trend.
*** Positive reports on the country’s currency situation
In recent days, there have been reports that Iran’s trade balance has improved and that its foreign assets have been facilitated by receiving its claims from India and Iraq. This issue was recognized with the news of Nasser Hemmati that the country has more access to foreign exchange resources.
*** Uncertainty about other economic factors on the capital market
A group of stock market experts also believe that the set of economic factors that have led to market growth are no longer valid, and sometimes these factors could not be analyzed from the ground up, and they had grown the Tehran Stock Exchange trend for irrational reasons. As a result, the issue has gradually declined after a historic overhaul, and stock demand has returned to the past, effectively paving the way for this major reform.