TEHRAN – Iranian stock market is moving in the right direction and will reach stability in the near future, market analyst Amir-Ali Amir-Baqeri told IRNA on Saturday.

“Market authorities are currently using asymmetric fluctuations to improve the market situation, but we must move in a direction where there is no volatility in the market,” Amir-Baqeri said.

Criticizing the government’s interference in the capital market, Baqeri said the more the market moves away from ordained pricing, and government-set rules and regulations, toward a free market in which the pricing is set through supply and demand, the more realistic and competitive the economy will become in the mid and long term.

The expert noted that political factors including the U.S. sanctions and their impact on the domestic markets which led to the increase of inflation in the country led people to bring their assets into the stock market, and that caused a significant surge in the mentioned market.

However, several external factors, including the disputes between the oil and economy ministries over the offering of the second ETF (dubbed First Refinery, or Dara Second), increase in interest rates, and the ambiguities in the next year’s national budget bill resulted in a recession in the stock market.

According to Amir-Baqeri, the changing political atmosphere in the United States and the world, and also Iran's economic resilience against the U.S. sanctions also impacted the market.

Consequently, Tehran Stock Exchange (TSE)’s main index (TEDPIX) which had surpassed two million points in early August 2020, suddenly started a downward trend in late August and has since slumped about 38 percent.

To support the market, the government has started passing new regulations and guidelines and has injected millions of dollars of resources into the market; however, these measures have been proven counterproductive, according to the expert.

The market is correcting itself and will reach stability in near future if the government stops interfering in it, Amir-Baqeri stressed.

Back in January, Finance and Economic Affairs Minister Farhad Dejpasand had said that the stock market is on the right track and has reached a stage that can be trusted in terms of performance.

“Except for the peripheral variables that affect this market, we do not have a specific disturbance in the market”, the minister stated, adding: “sometimes the policies that are made in different sectors affect the market, which is natural.”

The vice-chairman of TSE’s board of directors had also said in December 2020 that the stock market is expected to spend the last months of the current Iranian calendar year (ends on March 20) calmly.

Mentioning investigation of the periodical (six-month and nine-month) reports of the companies’ performance, Javad Eshqi-Nejad said that given the foreign currency exchange rate situation and the appropriate sales volume, in this period, almost the expectations of listed companies have been met and positive results have been provided for the capital market.

Regarding the continuation of the stock market trend in the next three months, he said: “In this regard, the main issue is political relations and international behavior; we seem to be achieving good results in the international arena.”

While predicting that the stock market will be calm in the last months of this year, he said: "But for the next year, according to the budget, we may face new events whose analysis can have special effects on various industries; in a way that these effects may be associated with some industries for the next 2-3 years.”

EF/MA