(MENAFN- Trend News Agency ) Tehran, Iran, Sept. 19
By Mehdi Sepahvand – Trend:
Tehran Stock Exchange (TSE) has been soaring in the past days, but the tide is to recede if the volume of trade stays the same, an expert believes.
"The important point to have in mind about the recent surge is that the volume of trade at TSE has been low, that is, there has not been much fresh money. If things keep this way, the market will relapse," Alireza Kadivar, a financial analyst and the Deputy Chief of Iran's Novin Investment Bank, told Trend Sept. 19.
On Tuesday, the TSE witnessed a rare surge of 929 points or 1.1 percent to stand at 85,343.
During the day, 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.
Kadivar said one of the factors that contributed to the improvement was the rise in raw material prices in the global market.
"Over half of the TSE's value comes from raw products, such as minerals, metals and petrochemicals. Over the past one and half months, the value of minerals and metals in global market has increased," he noted.
"Another factor that helped TSE grow was that the US dollar gained value over the rial as much as 5-6 percent over the same period."
Yet again, Kadivar said, a Central Bank of Iran (CBI) circulation two weeks ago, which obliged banks to cut interests rates, has made banking investment less attractive, luring investors towards the TSE.
The CBI recently limited banking deposit interest rates to 15 percent, whereas before that most banks would provide 18 to 22 percent interest.
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