TEHRAN – A capital market analyst says that TEDPIX, the main index of Tehran Stock Exchange (TSE), is going to improve over the next 1.5 months in comparison to the first 1.5 months of the current Iranian calendar year (started on March 21).

Rouzbeh Shariati believes reaching a possible agreement on the nuclear deal, the stability of the national currency, as well as the less attractive situation of the parallel markets are the important factors that would contribute to the improvement of the capital market.

“Prospects of a political agreement and positive signals from Vienna have reduced the foreign currency exchange rates in the domestic market. The stock market, however, had already anticipated this agreement. In fact, the anticipation of the agreement has already caused the correction of prices in the capital market,” the analyst said.

Unprecedented fluctuations in the Iranian stock market over the past few months have led shareholders, experts, and scholars to call for the government to increase its support for the market, some shareholders want the government to guarantee the return of their stocks, some believe providing infrastructure is the best way to help this market.

Following the rising concerns over the market conditions, in early April, the Government Economic Coordination Headquarters, in its 216th meeting, approved some new directives for regulating the stock market.

Also in late April, senior officials including the parliament speaker Mohammad Baqer Qalibaf, the Governor of the Central Bank of Iran (CBI) Abdolnaser Hemmati, Finance, and Economic Affairs Minister Farhad Dejpasand, and the Head of Iran's Securities and Exchange Organization (SEO) Mohammad-Ali Dehqan Dehnavi gathered at the country’s parliament to explore ways for supporting the stock market and resolving its current issues.

After the mentioned meetings, SEO unveiled a new directive package dubbed “7+3” which include allocation of one percent of the National Development Fund (NDF) resources to the stock market stabilization fund, lifting the ban on capital market financial institutions to use banking facilities, and granting five-year residency to foreign investors who buy shares in the Iranian capital market.

The above-mentioned directives have been implemented in the capital market as of April 27th, according to Dehqan Dehnavi.

In the 216th meeting of the Government Economic Coordination Headquarters, President Hassan Rouhani presented a report on the government’s supportive measures for the stock market, saying: “This year, which has been named the year of supporting production and eliminating obstacles, the government is trying to remove obstacles to the growth of the capital market and will try to encourage people to enter this market with the necessary training and arrangements.”

In its latest supportive decision, the government has also approved to inject 240 trillion rials (about $5.7 billion) of resources into the market in the form of bonds which most experts evaluate as a positive measure. It is said that these funds are gradually injected into the market and help increase the liquidity until new resources enter the market.

It has been said that these resources that enter the market will also motivate shareholders, and therefore real investors will be encouraged to invest in the market.

EF/MA