TEHRAN- TEDPIX, the main index of Tehran Stock Exchange (TSE), dropped 420 points to 1.334 million on Wednesday.

Over 4.051 billion securities worth 23.66 trillion rials (about $81.58 million) were traded in TSE.

The first market’s index fell 98 points, and the second market’s index dropped 1,494 points.

The budget bill, submitted by president to the parliament on December 12, has paid special attention to the capital market and bourse companies.

The measures considered in the budget bill and its overall positive effects on the capital market includes 1- Reforming the price of gas feed, as well as electricity, water, oxygen and other utilities for the petrochemical units, refineries, steel reduction units, and downstream industries 2-Reducing taxes on production units active in the stock market 3- Strengthening Capital Market Development and Stabilization Fund 4- Reducing the government’s revenue from selling bonds 5-Eliminating subsidized foreign currency allocations 6- Eliminating pre-ordered pricing.

Reducing the taxes imposed on production units will make them more profitable and therefore their performance in the stock market will improve.

Also, the direct taxes collected from production units is expected to be injected into Capital Market Development and Stabilization Fund in order to be used to improve and develop the market.

Based on the next year’s budget bill, no subsidized foreign currency will be allocated to special entities to import certain goods. Experts and analysts believe that this decision is going to have a very positive impact on the stock market since it will prevent rent and unrealistic pricing.

The draft of the national budget bill also indicates that the government will be less reliant on the stock market to compensate deficits and fund various development projects, which is another positive aspect of the mentioned bill since the stock market will be less affected by the politics and will follow a normal trend created by supply and demand.

MA/MA