RPT-Defying economic gloom, #Iran's oil firms propel bourse to record high - Reuters

RPT-Defying economic gloom, Iran's oil firms propel bourse to record high - Reuters:

The coronavirus crisis, an oil price shock and crippling U.S. sanctions on Iran’s energy and banking sectors have brought the country’s economy to its knees. Yet the Tehran Stock Exchange is home to one of the top performing equity indexes in the world.

Iran’s benchmark TSE index (TEDPIX) has soared 330% since the start of the year in local currency terms thanks to a breathtaking rally in oil firms, refineries and the petrochemical industry - accounting for more than a third of the top 30 companies.

The steep ascent, however, may have little to do with confidence in the country’s future. Instead, it mirrors events in Venezuela and Zimbabwe, where indexes have surged more than 400% in local terms amid rising inflation and capital controls.

“Stock market gains in Iran should not be viewed as a signal of economic stabilisation, but rather a reflection of hyperinflation and trapped capital, more akin to Zimbabwe than Russia or Saudi Arabia,” said Hasnain Malik, head of equity research at Tellimer.