By Alireza Ramezani, for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.
The main index of the Tehran Stock Exchange (TSE) (pictured) rose 221.7 points to hit 61,691 Dec. 30 — the last working day of 2015 in Iran. It has hovered around the same level so far this year, which is far lower than its 89,500 points in January 2013, six months before moderate President Hassan Rouhani was elected.
The stock exchange’s main index, TEDPIX, seems to have become numb to seemingly positive political developments. The Joint Comprehensive Plan of Action, which finally ended the 12-year-long nuclear crisis, did not set the index up for a significant rally. Neither did the International Atomic Energy Agency’s recent resolving of the long-running matter of the possible military dimensions to Iran’s nuclear energy program.
Financial experts believe that Iranian stock markets suffer from deep distrust among investors. Indeed, markets have not even reacted to the 10.7% appreciation of the US dollar against the rial in the six months running up to Dec. 30. The government’s recent stimulus package has not helped either.
The market’s apathy can largely be blamed on the global economic downturn. The slump in the prices of crude oil, petrochemical products as well as basic metals and minerals in international markets have all added to the external pressures on Iranian enterprises. Indeed, the economic sanctions against Iran, coupled with slow growth in China — a strategic trade partner of Iran — of late has had a significant impact on the Iranian economy and markets. There are also domestic factors at play. Issues such as the structural problems of Iranian capital markets, policy shifts and falling inflation are all contributing to the current situation.