You might say that Tehran Stock Exchange (TSE) is booming into the stratosphere. Its main index, the TEDPIX, soared 28,543 points, or 3.71% d/d, to hit 798,105 on April 26, the second trading day of the Iranian working week.

The gain came on top a general skyrocketing of stock market indices in Iran of late, building on previous big momentum seen in the past couple of years. In fact growth since 2017 has doubled the market’s value in dollar terms, and it’s taken place against the backdrop of the run on the Iranian rial (IRR) in 2018 and 2019 triggered by the return of heavy US sanctions targeted at swathes of Iran’s economy. Iranians have looked high and low for secure places to invest their money and the stock market has grown in popularity.

The most recent meteoric rise is in part thanks to the success of the initial public offering (IPO) of SHASTA (Social Security Investment Company). It listed 10% of its shares on April 15, becoming a market leader in a matter of weeks. Many investors see potential windfalls ahead with several other government entities set to be listed in the coming weeks and months.

The TEDPIX at one point climbed to 798,800 on April 26 with the TSE’s overall value exceeding $192bn (at the free market rate). More than 3.448bn shares changed hands on the day, adding nearly $320mn to the value of the market.

The trading day also brought mixed fortunes for various listed companies. Industrial sector enterprises enjoyed significant gains but some oil companies ran in the red.

Iran Khodro Investment Development Company (GOST1) was top dog as its share price moved up 108.64% d/d to IRR2,729 per share. It was followed by Iran Board-R (FIBX1), up 53.63% d/d. Its share price ended at IRR5,400.

Big petrochemical company AzarAb Industries (AZAB1) saw the biggest losses, dropping 4.6% d/d.

bne IntelliNews spoke with one Tehran-based trader who said the bull market was no doubt heading towards the 800,000-index threshold.

“The market is reaching the 800,000 index point and as it continues on its bullish trend we are still continuing to see flows of liquidity into the market,” the trader, who asked to remain anonymous, said.

He added: “Investors have gained 50% in profit just during the first month of this year. The recession in other markets along with the reduction of bank interest rates is leading investors to bring their capital to the stock market.”

More IPOs on the way

The government has announced that it is set to list its shares in three state-owned banks and two insurance companies to raise an estimated $1bn from the TSE.

Finance Minister Farhad Dejpassand said on April 25 that the listing of the five government-run entities—Bank Mellat, Bank Tejarat, Bank Saderat, Alborz Insurance and Amin Reinsurance—would take place late next week on the TSE.

The banks and insurers would form an exchange-traded fund (ETF), he said.

The April IPO of SHASTA on the main index was the largest ever seen on the exchange.

The entire 10% stake of 80bn shares was sold at IRR 8,600 per share, with the flotation estimated to have earned IRR68.8tn ($430mn at the free market rate, $1.63bn at the government rate).

Private investors who snapped up some of SHASTA at now own part of an organisation that is home to large swathes of Iran’s insurance market and pension portfolios.

Shasta controls nine entities in sectors including petrochemicals, pharmaceuticals, petroleum, transportation, cement and finance. Its controlled companies include Iranian shipping line IRISL, National Iranian Copper Industries (NICICO), Mobarakeh Steel, Iranol Oil and Jam Petrochemical Co.

Iranian President Hassan Rouhani hailed the IPO as historic, saying that around 2mn investors benefited from the stock market sale.