The Tehran Stock Exchange index hit a new record high last week, reaching 31,332 last Wednesday before falling back a bit to 30,737 as of Monday’s close. The index appears to have broken out of its two-year hibernation during which it merely fluctuated between 24,000 and 27,000. The surge in prices isn’t a surprise, however, and many analysts thought it was long overdue.
The index was flat, after all, during a period when Iran was hit, according to its own statistics, with one of the worst periods of inflation going on in the world. The index needed to rise merely to keep up with inflation.
But it hasn’t kept up. An investor who bought stocks back at the start of 2011 when the index first passed 20,000 has seen his stocks appreciate by more than 50 percent over almost two years. But inflation has long been running above 20 percent 10 times more so stock appreciation has not kept up.