Tehran’s stock market posted gains for 10 weeks in a row indicating that the stuttering market is recovering after the bubble burst in August 2020.
Benchmark of Tehran Stock Exchange eked out a 3.34% gain during the last trading week on Wednesday. Stocks of small companies posted bigger gains. The TSE’s equal-weighted index closed week 6.5% higher indicating that small caps outperformed blue chips last week, according to Persian-language economic website Eqtesad News.
Upbeat mode in the market has once again attracted attention of millions of retail investors hoping to compensate mounting losses of last year.
The retail investors’ return is seen as one of the driving forces behind the buoyant mood in the bourse. Market data last week indicated that average value of deals by retail investors stood at 107.9 trillion rials per day, up 40% compared to the daily average last week.
Spike in foreign currency rates in recent days is a significant factor fuelling the stock rally especially in export-based companies and commodity stocks. High inflation expectation is seen as another magnet pulling the people toward asset markets.
The share market has been grappling with bearish trends that began after the price bubbles burst last summer and non-stop selloff swept through most share categories.
Ever since the government has been trying to revive the trust of millions of retail investors who were lured to join the bourse last year.
Investor sentiment was buoyed particularly after the government in May announced that it would enforce 10 support measures to lift the market.
Among other things, the measures include borrowing from the National Development Fund of Iran (sovereign wealth fund), removing bans on banks and brokerage firms to invest in share market and encouraging foreign investment.