29 Mar 2024
Thursday 19 June 2014 - 15:19
Story Code : 101800

Iran's investors alarmed by stock market decline

Iran
[caption id="attachment_101807" align="alignright" width="257"] Investors look at an electronic display board reflected in a glass partition at the Tehran Stock Exchange, Sept. 15, 2010. (photo by REUTERS/Caren Firouz)[/caption]
This week,another sharp drop in the Tehran Stock Exchange Index (TEPIX) served as a reminder that some of the structural issues in Irans main capital market need to be addressed.
Since the beginning of the current Iranian year (March 21, 2014) the TEPIX has dropped by 8% a fact that has worried Iranian investors. Though this weeks sharp decline (2.5% drop on June 14-15) came to a halt on June 16, concerns remain that further fluctuations will undermine Iran's capital market. The most recent drop also indicates that the governments April 2014 decision to inject some liquidity into the market was just a short-lived remedy that failed to address deeper structural shortcomings.
Market fluctuations are heavily influenced by domestic political and geopolitical events. The most recent such event has been the emerging threat from the terrorist organization theIslamic State of Iraq and al-Sham(ISIS). Interestingly, the Iranian market has calmed down following the start of a new round of nuclear negotiations in Vienna as well as the news that Iran and the UnitedStatesmaycollaborate to contain the ISIS threat.


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