🔻Ettelaat newspaper: Iran’s stock market suffers from a lack of trust

While Iran’s media reported a “historic growth” in Tehran’s main stock index on Wednesday, the Ettelaat newspaper on Thursday warned in a commentary that “the stock market does not need money; it needs trust. And until trust is restored, any rise could be the prelude to another fall.”

Reza Kamiyai, in a note titled “Stock market; opportunity or trap?”, wrote: “The dollar value of Iran’s stock market has fallen to about $98 billion; that is, the entire capital market of a country with more than 90 million people is worth roughly the net annual profit of Google. This is not just a comparison; it is a real picture of Iran’s economy—an economy that is shrinking day by day, but officials continue to talk about big achievements.”

In this commentary, it described the low valuation of Iran’s stock market as “a reflection of the high risk of Iran’s economy.”

Regarding the reason why Iran’s stock market has failed to attract investment, it said: “Capital does not flee from cheapness; it flees from instability. Capital is not afraid of low prices; it is afraid of unpredictable decisions. A market that is surprised every day by a circular, a directive pricing, or a sudden decision—even if it is the cheapest market in the world—cannot buy investors’ trust.”

The commentary also discusses Iran government’s ever-growing “budget deficit,” saying that if the goal is only to collect cash, the result will be nothing other than “the repetition of a bitter experience.”

It also refers to the fall of Iran’s stock market in 1399 (2019/2020).

At that time, Iranian officials and even Ali Khamenei, the then Leader of the Islamic Republic, and Hassan Rouhani, the then president, encouraged the public to invest in the stock market. But in Mordad 1399, the stock index fell intermittently, and many investors lost their assets.

Many factors have a negative impact on Iran’s stock market, and one of the most important forms of uncertainty among the uncertainties that Iran’s economy is trapped in is war, the outcome of negotiations, and the trajectory of Iran’s foreign relations.”