During past 12 months, Iran`s economy has been faced lots of challenges such as significant depreciation of Iranian Rial, US withdrawal from JCPOA, significant increase in commodities` prices. Therefore, there were lots of fluctuation in Tehran Stock Exchange as a thermometer for Iran’s economy. The TEDPIX (Tehran Stock Exchange Dividend and Price Index) has been increased more than 33 percent during past 12 months from 22nd of July 2017 to 22nd of July 2018. The changes in TEDPIX have been shown in the table below:
Chemical industry is the biggest industry in Iran’s capital market in terms of market cap. The share of chemical industry is about 25 percent in which the return on Investment was more than 48 percent during past 12 months. The most important parameters which led to growth in return of chemical companies were global increase in commodities’ price such as 65 percent growth in methanol, 35 percent increase in urea and 44 percent growth in ethylene. In addition, significant increase in foreign exchange rate had great impact on the market during mentioned period. The chemical industry Index during past 12 months is shown in the chart below:
The share of basic metals in Iran’s capital market is about 17 percent in terms of market cap and the return of this group was more than 110 percent during past 12 months. Increase in demand in domestic market, significant increase in foreign exchange rate versus Iranian Rial and global increase in the price of commodities such as steel billet and slab, zinc and copper concentrate led to growth these companies` return. The basic metal’s index for last 12 months has been shown in the table below:
The share of companies active in the field of iron ore is more than 7 percent in the capital market. This industry had the greatest return in capital market in the mentioned period which was more than 120 percent. Increase in foreign exchange rate versus Iranian Rial, increase in iron ore price and significant growth in domestic demand led to boom in the share of iron ore companies. The index of iron ore companies in Tehran Stock exchange has been shown for last 12 months in the table below:
To conclude, due to current political situation, an ever-increasing exchange rate trend versus Iranian Rial and economic bottlenecks have emerged which make trouble for the overall market as well as some of the industries, if economic and political decision makers do not make a proper decision about future path of the companies, many of them will face very serious challenges, because the recent growth in prices was the result of inflation.