Stock market to get back on track this year: MP

May 15, 2021 - 13:12

TEHRAN - Mohammadreza Pour-Ebrahimi, the chairman of the Iranian parliament’s economic committee has said that the stock market is going to follow a positive trend in the current Iranian calendar year (started on March 21).

“[This year] the profits of major industries and influential companies in the capital market have been assessed positively, which is why the market will follow a positive trend this year,” Pour-Ebrahimi told IRIB.

The official said that part of the current negative trend in the market is due to psychological factors and the fact that people have lost their trust in the capital market.

“In the first half of the previous year, the government failed to manage and monitor the capital market and did not do its job properly, which is why the capital market [index] witnessed such a severe decline,” he said.

The government must act in such a way that the people’s trust is restored and the capital market is taken out of the current psychological atmosphere, he stressed.

Earlier this month, Market Analyst Rouzbeh Shariati said that TEDPIX, the main index of Tehran Stock Exchange (TSE), is going to improve over the next 1.5 months in comparison to the first 1.5 months of the current Iranian calendar year.

Shariati noted that reaching a possible agreement on the nuclear deal, the stability of the national currency, as well as the less attractive situation of the parallel markets are the important factors that would contribute to the improvement of the capital market.

Unprecedented fluctuations in the Iranian stock market over the past few months have led shareholders, experts, and scholars to call for the government to increase its support for the market, some shareholders want the government to guarantee the return of their stocks, some believe providing infrastructure is the best way to help this market.

Following the rising concerns over the market conditions, in early April, the Government Economic Coordination Headquarters, in its 216th meeting, approved some new directives for regulating the stock market.

Also in late April, senior officials including the parliament speaker Mohammad Baqer Qalibaf, the Governor of the Central Bank of Iran (CBI) Abdolnaser Hemmati, Finance, and Economic Affairs Minister Farhad Dejpasand, and the Head of Iran's Securities and Exchange Organization (SEO) Mohammad-Ali Dehqan Dehnavi gathered at the country’s parliament to explore ways for supporting the stock market and resolving its current issues.

After the mentioned meetings, SEO unveiled a new directive package dubbed “7+3” which include allocation of one percent of the National Development Fund (NDF) resources to the stock market stabilization fund, lifting the ban on capital market financial institutions to use banking facilities, and granting five-year residency to foreign investors who buy shares in the Iranian capital market.

The above-mentioned directives have been implemented in the capital market as of April 27th, according to Dehqan Dehnavi.

EF/MA

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