The Iranian economy has certainly seen better days. With rising unemployment, high inflation and West-imposed sanctions, to say that it’s going through a challenging period is something of an understatement.
And yet for the Tehran Stock Exchange (TSE), things have never been so good, with the TSE hitting an all-time high earlier this month when it crossed the 16,000 threshold.
To put its rise in perspective, the 43-year-old TSE’s value has since the beginning of the current Persian year that began on March 21 seen its value increase by more than $11 billion, bringing its total value to $75 billion—a 17 percent increase in less than 6 months.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
But although some have welcomed the TSE's meteoric rise, the exchange has also attracted the unwelcome attention of those who suspect the numbers are being fiddled. Enter the Islamic Consultative Assembly (or Majles), which has now ordered an investigation.
‘In Iran we have a problem with figures and statistics,’ said Mohammad Ghasim Osmani, a member of the Majles planning and budgetary commission. ‘The statistics produced (by the government) face problems. Even if the figures produced are correct, the performance of the Tehran Stock Exchange must be scrutinized, and I agree with the plan to probe and investigate the TSE’.
Amongst other things, the investigation will focus on the 150 people who oversee the TSE's activities, to see whether their management techniques have been responsible for the 3000-point rise in the TSE index since March.
Another cause for concern has been the changeover of the software system. No one denies that the TSE needed a software system capable of managing the increasing number of trades. Indeed, the request for a new system was made in 1999, but took nine years to be fulfilled. But the problem is, according to Tehran Today, that all records regarding share prices and other information about the TSE prior to that date have been deleted, meaning all the monetary information regarding shares is based on data after the change was made, in December 2008.
Sceptics also note that the TSE has suddenly started to ignore domestic political events. Until recently, domestic and foreign events impacted the exchange’s performance, a good example of which was prior to the 2005 presidential elections. A day before the second round run-off between Akbar HashemiRafsanjani and Mahmoud Ahmadinejad, the TSE index rose by 71 points on expectations of a Rafsanjani win. However, the price fell by 126 points on the announcement that Ahmadinejad had won.
And the slide didn’t stop there. In part on the back of unfavourable remarks Ahmadinejad made about the TSE prior to his election (he likened it to gambling) the TSE went on to lose 466 points within 2 weeks of him being elected.