Iran stock index breaks through 1 million mark amid warnings market is overheating

Analysts say the booming stock market is at odds with Iran’s economic fundamentals. (AFP file photo)
Short Url
Updated 09 May 2020

Iran stock index breaks through 1 million mark amid warnings market is overheating

  • Analysts say the booming stock market is at odds with Iran’s economic fundamentals

DUBAI: Iran’s main stock index broke through the 1 million point mark for the first time on Saturday, state media reported, amid warnings that the market is overheating.
The Tehran Stock Exchange’s benchmark TEDPIX index gained 25,663 points in early trading on Saturday, rising above 1,000,000 points, the official IRNA news agency said.
The TEDPIX had closed the previous session on Wednesday at 977,923.47, down 2,647.54 points, or 0.27 percent.
Analysts say the booming stock market is at odds with Iran’s economic fundamentals, which are deteriorating under the weight of sanctions and the coronavirus outbreak, raising the risk of a stock market bubble.


Saudi Arabia looks to cut spending in bid to shrink deficit

Updated 01 October 2020

Saudi Arabia looks to cut spending in bid to shrink deficit

  • Saudi Arabia has issued about SR84 billion in sukuk in the year to date

LONDON: Saudi Arabia plans to reduce spending next year by about 7.5 percent to SR990 billion ($263.9 billion) as it seeks to reduce its deficit. This compares to spending of SR1.07 trillion this year, it said in a preliminary budget statement.

The Kingdom anticipates a budget deficit of about 12 percent this year falling to 5.1 percent next year.

Saudi Arabia released data on Wednesday showing that the economy contracted by about 7 percent in the second quarter as regional economies faced the twin blow of the coronavirus pandemic and continued oil price weakness.

The unemployment rate among Saudis increased to 15.4 percent in the second quarter compared with 11.8 percent in the first quarter of the year.

The challenging headwinds facing regional economies is expected to spur activity across debt markets as countries sell bonds to help fund spending.

Saudi Arabia has already issued about SR84 billion in sukuk in the year to date.

“Over the past three years, the government has developed (from scratch) a well-functioning and increasingly deeper domestic sukuk market that has allowed it to tap into growing domestic and international demand for Shariah-compliant fixed income assets,” Moody’s said in a statement on Wednesday. 

“This, in turn, has helped diversify its funding sources compared with what was available during the oil price shock of 2015-16 and ease liquidity pressures amid a more than doubling of government financing needs this year,” the ratings agency added.