Continuation of 'Depressive State' in Tehran Stock Exchange

Radio Farda - Despite positive news in foreign policy and particularly the imminent prospect of lifting sanctions, the decline of the overall index in Tehran's stock market continues. Reza Valizadeh has asked Fereydoun Khavand, an economist residing in Paris, whether this strange contradiction is not puzzling? Fereydoun Khavand: The contradiction you mention has even become a bitter puzzle for market participants. On one hand, a significant opening has occurred in Iran's international environment; after the very difficult nuclear negotiations last July, the signing of the 'JCPOA' paved the way for the process of lifting sanctions, large economic delegations are coming to Tehran one after another, and the U.S. Congress can no longer prevent the implementation of the 'JCPOA'... In summary, the country is emerging from years of a dark period of isolation. However, at the same time, the overall stock index on Tuesday reached its lowest level in the past two years, and the Tehran Stock Exchange is witnessing the hardest fall in its history. It even seems that the stock market has become excessively pessimistic about the future. Nevertheless, if we look more closely at the reality of the stock market, we see factors that have pushed the stock market into a state of depression, despite the positive news circulating in the international economic environment. So let's examine the factors that have driven the stock market towards a state of depression despite the good news... Several factors have been effective in the ongoing decline in Tehran's stock market. First, despite achieving the 'JCPOA' and breaking Iran's isolation, no real change has occurred yet. Positive changes will begin in early next year after the International Atomic Energy Agency's report on Iran's commitments. Second, there is no good news in the international economic environment, especially with reports of a slowdown in economic growth in China and the impact of this event on the prices of raw materials, particularly oil. The Tehran Stock Exchange has always been highly sensitive to the outlook for the country's oil revenues. Some heavyweight companies in the Tehran Stock Exchange are also suffering from falling raw material prices, leading to a decline in their stocks, especially petrochemical companies, which brings down the overall stock index. Finally, a third factor to consider is the severe recession that has gripped Iran's economy, with predictions of a drop in the country's growth rate to one or even zero percent this year. How long will this decline in the Tehran Stock Exchange continue? Unless an unforeseen event occurs, this period of historical recession in Tehran's stock market should logically end by the end of this year.