Tehran Stock Exchange (TSE) index this week registered a loss of 2 percent in its value for the first time in many months. The rapid rise of TSE exchange (75% in the past year) had created a debate among market watchers and economists on whether the rise was based on market fundamentals or was a bubble. This week’s decline is attributed to political unrest and uncertainties in the Middle East and the rising prices in the energy sector and minerals like copper.
There was absolutely no rational explanation for the 75% rise in the first place where productivity has been falling in the last 3 years and over 90% of the state banks are highly indebted/geared such that they can hardly afford to lend any serious money to TSE companies for growth and investments. So again where this boom is coming from? They do not reflect the profitability, they do no reflect the confidence in the economy, so it proves that it is the reflection of the injection of new demand and money by the government owned front companies. It sounds like a kind of bubble. But it is a state-created bubble, instead of that created by the market forces in a free economy!
your full of rubbish!! You keep pulling info out of your rear.
If what you say is true why was there a long time where stocks were going down and stayed low for many years?? Why did these "front companies" simply not do the same then?????
"If what you say is true why was there a long time where stocks were going down and stayed low for many years?? Why did these "front companies" simply not do the same then??????
These front companies were not involved in stock market mate. These companies got involved when the adminstration decided to distribute 20% of companies stocks to people. Think of it as a sort of Ponzi scheme (assuming you are familiar with that terminology). However, the bubble is going to burst sooner or later.
May be you can delight us by providing some facts about that 75% growth last year? Where do you think they stem from?
The stock market in previous years according to your statement was not doing much. However, after so many rounds of sanctions, the virtual non existance of foreigh investment and money transfer and world in its worst slum for the past 60 years, TSE started flourishing like miracle. We are all ears!
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