This week, investors witnessed a different trend on the Tehran Stock Exchange as the shares went all green on Wednesday. The TSE All-Share Index rose by 0.9% to close at 61,973 to record a positive weekly performance after six consecutive weeks of declines. The main index of the TSE is now at the highest measure since September 19, due to the increases experienced in the Automotive, Banking and Other Financials sectors. Experts believe the approval of the Joint Comprehensive Plan of Action by the Iranian Parliament and also President Rouhani’s speech about his government’s economic plans on Tues­day night, gave investors some hope.

By Technical Analysis perspective, the All-Share Index narrowed the gap with its 50 Day EMA to 0.7% which is the lowest difference since August 12, 2015. Moreover, the index got back above the 61,500 level for the first time in October. Despite the promising gain of the index on Wednesday, it is still too early to believe that an up-trend has been initiat­ed because the index needs to break the resistance level at 65,000. The overall negative trend of the past few weeks cannot be disregarded yet. If the main index drops below 61,500, it can open the door to the lower supports expected at 60,000 and 57,000.

The index of thirty largest companies by market capitalization, the TSE30 index rose by 1.3% this week to close at 2,656. The index had been following the week with its limited fluctuations but on Wednesday, it gained 1.4%, a gain that had not been experienced since mid-July.

Also, the Average Daily Trade Volume (ADTV) of the market raised by 27% this week, reaching USD 24.9 million. The shares with the highest traded value were Pars Khodro, Saderat Bank and Bandar Abbas Oil Refinery. Almost USD 3.4 million worth of Pars Khodro shares were exchanged while the share price closed at IRR 939 (approx. USD 2.7 cents), 5.3% higher than last week. Saderat Bank closed at IRR 893 (approx. USD 2.5 cents) growing by 0.9%, while recording a weekly trade volume of USD 2.9 million. The third share with the highest traded value was Bandar Abbas Oil Refinery by having USD 2.4 million of trades. Also, its share price closed at IRR 3,583 (approx. USD 10.3 cents) with 4.4% weekly decline.

Furthermore, The FX market witnessed different fluctuations by various foreign curren­cies against the Iranian Rial. The USDIRR pair slipped by 0.4% in the free market, reach­ing 34,650, while its official rate remained unaffected at 29,950. However, the free market rate of the Euro increased by 1.4% to IRR 39,820, similar to its official rate which record­ed 2% gain by standing at IRR 34,388. Similarly, the official rate of the GPB, as stated by the Central Bank of Iran grew by 1.1% to IRR 46,333. This is while the free market GBPIRR rate remained unchanged in comparison with last week’s close, standing at 53,600.

Following the news of an open letter written by four ministers, warning the government about a potential worsening of the country’s economic slowdown, concerns about Iran’s economic outlook for the second half of the Iranian Calendar Year were raised (September 22, 2015 – March 20, 2016). Specially, the lower economic growth figures could mean an increasing unemployment rate and decreased consumer spending in the country. In this regard, the Iranian President, Hassan Rouhani, gave a speech on live television on Tuesday night, explaining his government’s economic plan for the months ahead. The Rouhani government has considered an economic package including 30 ac­tion points which according to the President, would be released in detail early next week. Mr. Rouhani disclosed the main topics of his economic stimulus plan, which included con­tinued controlling of the inflation rate, increased government spending, interest rate ad­justments as well as changing legal deposit ratios for banks. Considering the upcoming removal of sanctions as a result of the implementation of the Joint Comprehensive Plan of Action (JCPOA), Iran’s government is looking to boost the country’s production by sup­porting the demand side. Mr. Rouhani stated that his government is planning to invest USD 2 billion into construction projects as well as supporting small and mid-size busi­nesses. He also mentioned that the government has an objective to keep Iran’s inflation rate between 0.5 to 1% on a monthly basis. This is so that inflation figures can reach sin­gle digits, while at the same time, economic activities can continue unhindered. Experts are also expecting a reduction in interest rates and are following news of this potential event closely.

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