"Prosperity of stockmarket depends on economic conditions so that bourse is a place where stocks of economic corporations are being sold. At the same time, if the economy flourishes, the stockmarket would follow suit. As a result corporations will benefit from that situation, the value of their stocks increase, demand for their stocks shots up, and finally, the number of transactions rise," he said.

Pazhouyan stated that under stagnant economic conditions, companies lose profits and nobody will be willing to buy their stocks. "These are realities of every stockmarket. At the same time, the capital market is possible to experience spurious prosperity when the value of stocks rise and this is called a bubble. After a while, however, the stockmarket becomes stagnant," he opined.

The only way out of stagnation for the stockmarket, is strong economic prosperity and bringing stock value close to their real value. The recent boom in stockmarket was spurious because our economy is not experiencing overall prosperity.

Any prosperity in bourse has been consequence of activities of state-run companies and the private sector has not been active in the stockmarket. Therefore, we must not expect prosperity in the market as profits have not been high and no new investment has been made. Now that the nuclear energy hassle has overshadowed other issues, stagnation in bourse may seem natural. However, in case of real economic prosperity, this problem will be overcome. Inefficient economic management over the past 18 months is a source for current crisis in the stockmarket.

Dr. A. Hashi, Trusted auditor of the stockmarket

Abbas Hashi, trusted auditor of the stockmarket also noted that people’s presence in stockmarket is more significant because they can buy companies’ stocks and any economic development will be reverberated in bourse. Hashi also noted that that another reason for the current situation was disharmony between Majlis and the government, adding, "During those months, Majlis and government were at loggerheads and MPs tried to impeach every single minister. After presidential elections, economic activities in the country have come to relative standstill."

The Faculty Member of Shahid Beheshti University stated that stockmarket has an index which works like an alarm to indicate negative consequences of political decisions on the stockmarket. He added that some problems have been carried over from the previous to the current government. "On the other hand, the new government has not specified its economic plans and programs and this has increased distrust in future prospects of domestic economy."

When asked about last month’s developments in Tehran Stock Exchange, Hashi stated that instead of purchasing stocks and warming up the market, quasi-governmental entities are selling their stocks and then underwrite new stocks as banking institutes. This shows that there is not adequate supervision over quasi-governmental entities.

The trusted auditor of Tehran Stock Exchange said negative developments, weakness of the previous government and problems faced by the new government as other factors which have lowered bourse index.

Asked about positions taken by European and American companies on recent remarks of the Iranian President Mahmoud Ahmadinejad and their possible effects on the stockmarket, he noted that Iran has also lived with sanctions and threats and current problems are not due to foreign factors. "The problem is that we have done nothing to gain people’s trust inside the country," he said.

Hashi noted that major stockholders and investment companies are the main actors in the stockmarket. Ordinary people follow suit with major stockholders. As long as people do not trust the stockmarket no dramatic change will happen. People take their money elsewhere because they see that quasi-governmental entities are selling stocks instead of purchasing them.

Meanwhile, Mehdi Sahraeian, an economist, explained about economic factors affecting the stockmarket, saying, "When national production is booming, bourse index will take a positive upturn. However, when national production is negative or stagnant, we cannot expect the index to go up."

The government has frozen all credits for about nine months. Under these conditions, all developmental credits have been frozen and production has fallen drastically. Due to lack of economic prosperity, the stockmarket is also stagnant. Companies are currently unable to come up with a positive balance sheet in the bourse and this is due to unfavorable economic conditions.

As long as the government has not adopted expansionary polices and production sectors remain stagnant, similar stagnation in stockmarket is natural because exchange of goods and services will be affected by that stagnation.

The economist said no miracle could be anticipated for prosperity of the bourse if the current policies continue. Under conditions when developmental plans have been suspended for nine months and it took four months before the Economy Council convened its session. Therefore, economy is practically in a state of suspension. Therefore, we cannot expect prosperity in the stockmarket.

Iraj Akbariyeh advisor to minister of industries and mines for companies’ affairs noted that confidence building and making domestic economic atmosphere more transparent will play an effective role in increasing bourse indexes. He continued by saying that the government is finalizing budget circular and when government’s policy is made clear by that circular, the situation in stockmarket will become more transparent.

We must wait and see what policy will be adopted by the government with regard to domestic and foreign affairs as well as exports. Solving domestic problems and reaching a positive result with regard to Iran’s nuclear dossier in the November session of Board of Governors of International Atomic Energy Agency will greatly help in this regard. At present, there are many concerns in this regard. Of course, politicians will do their best to keep the stockmarket calm.

Akbariyeh noted that most reduction in stock value in industries and mines sector pertained to investment companies. At present, more than 65% of companies on the stockmarket belong to government and government-affiliated bodies including investment companies, banks, Social Security Organization and pension funds and directors of those companies are duty-bound to preserve their property. The value of industrial companies’ stocks has fallen by about 30% over the past four months. "This market is a cause of discredit," he opined.

Behrouz Shahdaei, a capital market analyst, noted that stockmarket index is now four-digit, adding, Experts have expressed various viewpoints on the current crisis in the stockmarket, but none of their views has thus far been carried out. The only proposal which has been implemented is shortening time for transactions, which was carried out incompletely. The results should be announced by the decision-making authorities at the highest level.

The problem with stockmarket is lack of security; as long as that problem has not been solved we must not expect any improvement in the market. Some $200 billion of Iranian capital has been invested in Persian Gulf states. Why has that capital left the country? At present, the main problem with the stockmarket is lack of investment. During the past two years we claimed that our stockmarket is the most profitable in the world, but we are actually among the worst markets with the lowest growth in investment.

Bahman Arman, an economist, also stated that certain factors have brought economic activities inside the country to a practical standstill. A major part of developmental and industrial activities has thus far been carried out through foreign finance. That trend, however, has been facing problems over the past few years and the problems are still in place because the Guardian Council believes that foreign finance involves usury and Majlis has rejected it. The issue is currently being reviewed by the Expediency Council.

The economist added that the Expediency Council has announced that it will not look into the finance case unless the government asks for it and the government has not asked the Council to take up the issue. Many projects are in limbo due to lack of a decision on that issue. This has had significant outcomes for the stockmarket.

Arman also noted that board of trustees of Oil Stabilization Fund has not convened its session yet because two members have not been introduced by the president and opined that this is another reason behind current stagnation in the stockmarket.