March 26, 2021
The main stock market index, TEDPIX, was down a whopping 37 percent from its August 9 peak on the last trading day of 1399. But the flattened index was still 145 percent above where it began the Persian year last March!
The Persian year 1399 saw a rapid and astounding surge in stock prices even after the coronavirus sent markets all around the world into a tailspin starting around last Now Ruz. Tehran’s stock market was the world’s oddity and its surge could not be explained by market fundamentals.
The number of investors soared as more and more ordinary Iranians came to see the stock market as a better place to store their wealth than gold or foreign currencies or real estate, the traditional parking spots for money when inflation is ravaging the rial.
Many economists warned that the soaring market was all a bubble that was bound to come to an end soon. But President Rohani actually advised Iranians to put their money into the stock market and avoid gold and foreign currencies. That advice came just a few weeks before the market index peaked at 2,078,512 on August 9.
Then came the crash and Rohani looked more than just foolish. The market bottomed out at 1,135,345 on February 6, almost six months to the day after the peak.
The six weeks after that saw the market stumble along unimpressively. It did not pass 1,300,000 until March 17, the last trading day of the year.
But by then, the volume of daily trades had declined substantially, indicating many of the small investors had abandoned the market.
It is important to note, however, that at 1,300,000 currently, the market index is still higher than it was until mid-June last year. In other words, and in very simplified averages, investors who put their money in the stock market before mid-June, still are ahead. It is the people who put their money into the stock market in the eight weeks between mid-June and early August who have likely taken a beating.
Those who invested their savings before last June and have kept their money in stocks are likely still to be ahead.