Tehran, Iran, December 13
By Mehdi Sepahvand –- Trend:
An expected rise in the price of fuels in Iran is not going to influence the Tehran Stock Exchange in any direct way, a market expert told Trend December 13.
A pro-reform paper has reported that the administration plans to increase fuel prices by 40 percent over the next ten days. The government spokesperson Mohammad Baqer Nobakht has confirmed the reports.
"An increase in fuel prices will not affect the TSE directly. Because these are the products of refineries and are bought by the government according to their international prices. This means that the government is actually subsidizing the global-market price to domestic-market variance for these products. So there is no change in terms of these products’ relation to the TSE," Alireza Kadivar, the CEO of T.M. Mellat Investment Company, said.
However, he noted, there is another, indirect impact that the increase in fuel prices is going have on the TSE.
"This is because as fuel prices rise, we will naturally have some inflation. Then, the prices of assets will rise, assets such as currency, physical, and fixed assets. These assets can impact the stock market," Kadivar said.
The TSE has been witnessing unprecedented rise over the past weeks. The main index of the Tehran Stock Exchange (TSE) added 654.8 points or 0.71 percent, to end the trades at 93283.7 on Dec. 13. According to the TSE official website, about 1.7 billion shares, valued at $131.6 million (4.6 trillion rials) were traded for the day.
Experts relate this recent surge to the rise of commodity prices in international markets, the rise of the USD against the Iranian rial, as well as lowering banking interest rates in the country.