12 Apr 2024
Monday 13 April 2020 - 15:31
Story Code : 373674

Tehran stocks rally as government raises funds for virus fight

Bloomberg | : Stocks in Iran have rallied to record highs after the government announced plans to sell about $2 billion worth of state assets to raise money for the fight against the coronavirus epidemic.

The Tehran Stock Exchanges main index of shares rose 2.5% to 623,276 points, driven mostly by industrial shares such as petrochemical producers, steel companies and banks. The index has climbed 30% since Feb. 19, when Iran reported its first confirmed cases of the virus.

With about 4,500 reported dead and more than 70,000 infected, Iran is the Middle Easts epicenter of the disease. Its ability to respond has been hampered by U.S. sanctions that have crippled its economy. On Saturday, President Hassan Rouhani instructed the Minister of Economy and Financial Affairs to expedite plans to sell stakes in a range of state-owned companies and assets on the stock exchange to bolster the countrys coffers.

Over the past two weeks Rouhani has announced about $10 billion worth of measures to support lower-income families, the healthcare system and businesses struggling with the impact of the virus. As infection rates start to flatten, the government relaxed some social distancing rules to allow most government employees to get back to work.

Because the rials value has declined significantly since the U.S. quit the multipower nuclear deal with Iran two years ago and reimposed tough sanctions, the stock market has remained one of the few attractive investments for people, according to Massoud Gholampour, an analyst at Novin Investment Bank in Tehran.

This is new, real money thats entering the market every day, and its driving prices and the index, Gholampour said. The government sell-off will be in the form of exchange-traded funds, and those stocks have been rising since Saturday, he said. He added he wouldnt be surprised if the market rally continued and the index hit 1 million points.

The government sale involves nine companies, and shares will be available to all Iranians, the Mehr News agency reported last week. The companies havent been identified and no date has been given for the sale.

At the close of trading in Tehran on Sunday, Mobarakeh Steel Co. was up 4.25%, and both Tamin Petrochemical Co. and Pasargard Bank rose 5%, according to data on the website of the Tehran Stock Exchange, tse.ir.
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