Tehran, Iran, September 25
By Mehdi Sepahvand –- Trend:
A recent surge in the Tehran Stock Exchange (TSE) would highly probably prove sustainable, an expert says, citing several reasons.
“The recent CBI (Central Bank of Iran) directive on lowering interest rates is the major catalysts behind the move in TSE and IFB (Iran Fara Bourse), Mehdi Goodarzi, a board member at Agah Group, a financial service company, told Trend September 25.
The TSE has been on the rise over the past three weeks. On the most lucrative day, September 19, 734 million shares and bonds worth 2.123 trillion rials ($63.3 million at 1 USD worth 33,456 rials) were dealt 54,662 times, indicating a rare surge of 929 points or 1.1 percent. At the close of the day, the TSE index stood at 85,343.
The CBI recently limited banking deposit interest rates to 15 percent, whereas before that most banks would provide 18 to 22 percent interest.
Goodarzi noted that the effects of lower interest rates, despite the controversies on implementation, are not completely stamped into market.
“We think the surge on this cause would be sustainable,” he said.
But, according to Goodarzi, international situations have also contributed to the recent TSE surge.
“The global hike in commodities prices affected the related industries in our market as well,” he noted. “If the global markets can hold their grounds, there is still space for tickers on mines and metals sector to grow.”
Goodarzi concluded by saying he believed that the whole market is able to reach one level higher on P/E (price to earning) ratio on aggregate.
The price-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings. The price-earnings ratio is also sometimes known as the price multiple or the earnings multiple.