TEHRAN – Market analyst Mehdi Souri believes demand stimulation, government bailout packages and liquidity injection could push the stock market in a positive direction, IRNA reported Monday.
“In the current situation where shareholders do not expect a further decline in the market index, demand stimulus, bailouts and liquidity injection could push the stock market in a positive direction,” Souri said.
In his assessment of market conditions, he pointed to the low probability of a heavy fall in the stock market, saying: “In general, when market participants do not expect a serious fall [in the market index]the market can continue to perform more optimistically.”
Referring to the impact of the political issues such as the nuclear deal and the Vienna talks on market conditions, he noted that the market view of the JCPOA (nuclear deal known as the Joint Comprehensive Plan of Action) has been positive at times and negative at other times.
“Currently, the market’s view on the matter [JCPOA] is positive, because shareholders believe that establishing positive relationships with other countries will give companies a better chance of selling their products and supplying equipment needed for their overhaul and development projects, as well as transferring money domestically ,” added Souri.
According to the expert, the loss of people’s confidence in the capital market is one of the biggest challenges for the market.
“The investment appetite in the country has declined, and this is a major threat; we are always concerned about the outflow of capital from the country and the outflow of talent,” he said.
The Iranian stock market has been struggling for months to get back on track, but several internal and external factors have prevented this market from reaching its true potential.
In July, senior stock analyst Ashkan Zoudfekr also said the government should support the stock market against other parallel competitors such as money and real estate markets.
“Given that the capital market provides liquidity and dynamism to the economy and is a useful and active part of the country’s economic development, strengthening it should become a priority for the government,” Zoudfekr said.
By arguing that the lack of sufficient attention and determination on the part of the government to regulate and control speculative markets has led to liquidity being diverted to such markets and becoming inactive and unproductive.