Growth of stock exchange
Following the latest falls in the capital market; the experts say that the current trend of the stock prices is assessed as appropriate for the entrance of buyers. According to SANA news agency, alongside with the increase of the petrol price and the second phase of implementation of targeted subsidies, if…
Following the latest falls in the capital market; the experts say that the current trend of the stock prices is assessed as appropriate for the entrance of buyers. According to SANA news agency, alongside with the increase of the petrol price and the second phase of implementation of targeted subsidies, if the aimless money flows to other markets such as the foreign exchange market, the inflation rises up in an unleashed manner. This contradicts to the government anti-inflation policies. On the other hand, passing the bill for injection of 5 trillion Tumans of cash to support the stock exchange shows that the government is determined to prevent more money withdrawal from this market.
The CEO of Paarand Investment Company believes that according to most professional activists in stock exchanges around the world, the best time to buy shares is when the prices fall sharply or, metaphorically, the stock sea level is contaminated with blood. At the moment, It seems that such a situation prevails in Iran's stock market and many stocks are below their intrinsic value and are traded at a lower par ratio.
Two main reasons for the trend reversal in the stock market
Emphasizing the potential of the market to return to the right path, Mr. Ali Dehdashti Nejad said: "the reasons why we can predict the change in market direction are that in the first place, there were no fundamental bad news which have significant negative impacts on profitability of companies and, secondly, the government will not stay silent over further decline of prices in the stock market."
An Action to prevent further withdrawal of liquidity from the stock exchange
"In recent months, some of the funds received substantial losses in the market and, due to the psychological consequences, part of them exit the market", he continued, "However, if the index falls below 72 thousand units, the process of liquidity exit will be intensified and, consequently, the value of all of marginal markets including currency, gold and real estate will rise. This is an event which the government attempts to avoid".
He emphasized: "Despite all these circumstances, the closer we get to holding of general meetings, the stock market will grow more positive. A review of the periodic cycles of stock market trends in Iran reveals that the stock price movement grows at four-year periods with its last surge in September 2011. It is expected that the wave of the growth starts this September.