Drawing a comprehensive overview for each capital market requires reliable perspectives in three main parts of variables: Macroeconomic variables, Industries’ variables and corporates’ variables. In this article, the economic and political view of these variables will be investigated.
Like all capital markets around the world, TSE index takes effect of domestic and foreign economic and political occurrences, so it seems the Trump effect and monetary policies are the major elements on Tehran Stock Exchange in the remaining months of current Solar year 22nd march 2018 year-end. The Trump effect could be divided into two aspects: the position which he has taken towards different markets have a significant influence on the price of commodities and the second aspect the position which he has taken against Iran which some analysts believe that it will influence the trend of attracting investment in Iran however in reality the second aspect hasn’t being able to volatile markets and also other powers such as Russia, China and European Union are still supporters of JCPOA.
The monetary policies and the implementation methods of them formed the first important variables. The budget coverage, the foreign exchange rate and inflation rate are the most important parameters which have great influence on Iran’s capital market. According to the Iran’s government revenues’ statistics during past months there is a strong possibility of budget deficit specially in public work projects in the current year. Therefore, it is believed that the demand in cement and tile wouldn’t change significantly. In addition, budget deficit could boost the inflation rate and attenuate IRR Strength. Increase in inflation is good news for industries which export their products like oil and gas and petrochemicals. In addition, growth in inflation rate could enhance the costs in the pharmaceutical companies, car manufacturers and detergents producers. On the other hand, interest on bank deposits seems to be stable in the upcoming months so it is predictable that the mentioned variable has no influence on market till the end of the current Persian calendar year.
The most complicated problem among industries’ variables is related to the money market. Most of banks which are listed in Tehran Stock Exchange couldn’t provide their financial statement according to the new auditing standards, this change lead to a significant loss because of their doubtful debts. Unlike banks, according to presale plans of car manufacturers, it is predicted that these companies could create value for their shareholders. In addition, the industries which have advantage in export can bring more profit for their shareholders. Copper, iron ore, steel, lead and zinc, oil and gas and petrochemical industries could boost growth of market index in the remaining months of current Solar year.
The opportunities and challenges in corporations could be discussed according to their half year financial statements. The financial statements of corporations that are active in the aforementioned industries can indicate a bright future. Thus, it is predicted that the index of TSE could grow smoothly in the remaining month of current year and it seems demand for fixed income funds and Sukuk could increase. Finally, price to earnings ratio might decrease as a proof of increasing the market risk in Tehran Stock Exchange.