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Nuclear deal “Bears” Iran’s equity market?

Nuclear Program Materials 3 September 2017 13:46 (UTC +04:00)
When the world powers and Iran marked the implementation of the nuclear deal in January of 2016, traders were cherishing the hope of a bull thrusting its horns up into the air at the Tehran's equity market
Nuclear deal “Bears” Iran’s equity market?

Baku, Azerbaijan, Aug. 31

By Farhad Daneshvar – Trend:

When the world powers and Iran marked the implementation of the nuclear deal in January of 2016, traders were cherishing the hope of a bull thrusting its horns up into the air at the Tehran's equity market.

But now, about 20 months after the day the nuclear day had come into force, the hopes of a bullish market are gradually fading away.

Although the main index of the Tehran Stock Exchange (TSE) saw an increase of 7.17 percent over the last year, it appears that, the value of trades at the market has sharply slumped.

It seems that, removing the existing shortcomings, in the microstructure of the financial market, is among the crucial measures Iranian policymakers need to take, aimed at improving the performance of the capital market.

"The axis of the economic development is clear. We do not need to invent anything new. We simply need to properly implement them," Hamid Mirmoeini, an Iranian market expert, told Trend.

"We, unfortunately, have failed in both: improving the microstructure of the financial market and implementing the required strategic plans for the improvement of the capital market," he added.

Speaking about the shortcomings in the market, he said that the lack of market transparency has proved to be a major obstacle in the improvement of the market’s performance.

Hamid Mirmoeini further criticized a "herding behavior" at the Tehran Stock Exchange. Calling it "market’s major vulnerability," he pointed out that, such a behavior makes it difficult for the experts to analyze the existing trends.

Since January 16, 2016 (the nuclear deal’s implementation day) the value of the trades at TSE has declined by 17.7 percent, as 767 million shares, valued at $ 56.2 million (1.8 trillion rials), were traded on August 30 (the last day of trade this week).

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