From Reuters, Feb. 14. 2016:
* Equities index soars 18.3 percent in past four weeks* Auto sector leads, pharma and engineering also strong
* Risks include banking debt, delay to economic reforms
* But valuations still cheap by international standards
* Falling deposit rates may push more money into bourse
By Andrew Torchia
DUBAI, Feb 14 A leap by the Tehran stock market
in the past four weeks contrasts with gloom in many bourses
around the world and hints at Iran's investment potential as its
economy, long isolated by sanctions, rejoins the global trading
system.
The TEDPIX index has soared 18.3 percent since Jan. 16, when
the sanctions were lifted after an international deal on Iran's
nuclear programme. Average daily trading turnover has tripled
from last year to around $150 million.
The economy is still struggling - growth is close to zero,
the jobless rate exceeds 10 percent and many banks face
mountains of bad debt. Political tensions between hardliners and
moderates could slow efforts to address these problems.
As a result, some commentators are warning that the
notoriously volatile market may not hold on to its gains.
"The Tehran bourse is disregarding warnings and the
condition of world markets ... It is going down the same road as
in 2015, the result of which will only be a lack of confidence
and the flight of capital from this market," the conservative
Nassim news agency said in a commentary last week.
But many investors are betting that by restoring Iran's
links with the rest of the world and attracting foreign capital
and technology, the end of sanctions will trigger a long-term
economic boom.
"The actual benefits of the lifting of sanctions will take
six to 12 months to start to feed into companies' financials,"
said Payam Malayeri, head of asset management at Griffon
Capital, a Tehran-based firm which last month launched an
offshore equity fund focused on Iran.
"Investors are discounting that now - they are looking ahead
to corporate earnings growth in 2017 and 2018."
Some economists think Iran's gross domestic product could
grow 5 to 6 percent annually in the next several years. That
would boost corporate earnings 15-25 percent a year, Malayeri
estimated. Also, dividend yields are high at around 12 percent....MORE
TEDPIX, Feb. 17: 77888.2 up 746.60 (+0.97%)
