Iran’s stock market surges past key level to record high, as analysts warn of bubble

The Tehran Stock Exchange’s benchmark TEDPIX index gained 46,844 points in early trading, the official IRNA news agency said, up 2.4 percent. (FILE/SHUTTERSTOCK)
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Updated 02 August 2020

Iran’s stock market surges past key level to record high, as analysts warn of bubble

  • The Tehran Stock Exchange’s benchmark TEDPIX index gained 46,844 points in early trading
  • Analysts and some lawmakers, however, have warned that the move might raise the risk of a stock market bubble

DUBAI: Iran’s main stock index broke through the key 2 million point mark for the first time ever on Sunday, state media reported, amid warnings that the market is overheating.
The Tehran Stock Exchange’s benchmark TEDPIX index gained 46,844 points in early trading, the official IRNA news agency said, up 2.4 percent.
The index closed at 1,961,649 on Saturday after surging by over 57,325 points, or 3.01%, on the day, according to the Tehran Stock Exchange (TSE) website.
Iran’s clerical rulers have been encouraging ordinary Iranians to invest in local stocks to boost the country’s economy, which has been hard hit by the reimposition of US sanctions over Tehran’s nuclear program.
Analysts and some lawmakers, however, have warned that the move might raise the risk of a stock market bubble as the rising market is at odds with Iran’s deteriorating economic fundamentals, which are also feeling the impact of the coronavirus outbreak. Iranian authorities have denied that there is a bubble in the country’s stock market.


Oil giants’ production cuts come to 1m bpd as they post massive write-downs

Updated 10 August 2020

Oil giants’ production cuts come to 1m bpd as they post massive write-downs

  • Crude output worldwide dropped sharply after the market crashed in April

LONDON: The world’s five largest oil companies collectively cut the value of their assets by nearly $50 billion in the second quarter, and slashed production rates as the coronavirus pandemic caused a drastic fall in fuel prices and demand.

The dramatic reductions in asset valuations and decline in output show the depth of the pain in the second quarter. Fuel demand at one point was down by more than 30 percent worldwide.

Several executives said they took massive write-downs because they expect demand to remain impaired for several more quarters as people travel less and use less fuel due to the ongoing global pandemic.

Of those five companies, only Exxon Mobil did not book sizeable impairments. But an ongoing reevaluation of its plans could lead to a “significant portion” of its assets being impaired, it reported, and signal the elimination of 20 percent or 4.4 billion barrels of its oil and gas reserves.

By contrast, BP took a $17 billion hit. It said it plans to recenter its spending in coming years around renewables and less on oil and natural gas.

Weak demand means oil producers must revisit business plans, said Lee Maginniss, managing director at consultants Alarez & Marsal. He said the goal should be to pump only what generates cash in excess of overhead costs.

“It’s low-cost production mode through the end of 2021 for sure, and to 2022 to the extent there are new development plans being contemplated,” Maginniss said.

London-based BP has previously said it plans to cut its overall output by roughly 1 million barrels of oil equivalent (BOEPD) by the end of 2030 from its current 3.6 million BOEPD.

Of the five, Exxon is the largest producer, with daily output of 3.64 million BOEPD, but its production dropped 408,000 BOEPD between the first and second quarters. The five majors, which include Chevron Corp, Royal Dutch Shell and Total SA, also cut capital expenditures by a combined $25 billion between the quarters.

Crude output worldwide dropped sharply after the market crashed in April. The Organization of the Petroleum Exporting Countries agreed to cut output by nearly 10 million barrels a day to balance out supply and demand in the market.