The Securities and Exchange Organization, the inventory market regulator, Monday restored the day by day inventory worth limitation to the place it was in February when it determined to manage restrict ups and downs to spice up the depressed bourse.
Under the unsuitable impression that by setting limits on day by day share costs it might save the market from additional collapse, the SEO on Monday backtracked and mentioned share costs henceforth can change ±5% — the fluctuation vary that existed for years earlier than the SEO determined to twist it in February.
The choice will take impact on Saturday. The SEO additionally mentioned it plans to extend the value unfold sooner or later topic to correct market situations.
Struggling to discover a option to assist retail shareholders and keep away from additional loss in share costs, the SEO in mid-February introduced that share costs should unfold from -2% to +6% in in the future.
As per the restrict, set in favor of the market’s constructive aspect, the principle index of Tehran Stock Exchange, TEDPIX, was spared additional collapse as share costs might fall essentially the most by 2% per day.
As anticipated, the choice didn’t prop up the market and solely delayed the market correction whereas additionally prolonging the downturn. Poor market situations exacerbated because the ill-timed transfer undermined the liquidity of shares.
In April the SEO elevated the restrict down worth to -3% to ease promote aspect stress however that too was futile, compelling the regulator to seek out different methods out of the ending disaster.
Riding on the again of the liquidity tsunami out there, the TEDPIX jumped 300% in lower than 5 months and crossed the historic excessive of two.1 million factors in August.
Triggered by institutional merchants’ big selloff, principally shares of firms affiliated to the federal government, the market plunged and the TEDPIX crashed and misplaced half its worth leaving thousands and thousands of retail merchants to struggle their very own battles.