Stock Market Turmoil in Iran as Brokers Strike
Trading was brought to a halt in stock exchanges in Isfahan and Tabriz on Monday as brokers initiated a strike against the downturn in Iran’s stock market.
Trading was brought to a halt in stock exchanges in Isfahan and Tabriz on Monday as brokers initiated a strike against the downturn in Iran’s stock market.
The market has been in a decline, enduring a drop of over 5,600 points at the opening of Monday's trading, with 90 percent of the market bathed in red and over 60 percent of stocks queued for sale.
The recent plunge echoes the crash of July 2020, where Tehran’s stock market plummeted by over 30 percent in a single week, obliterating the savings of countless small investors lured by government assurances of a secure market. Allegations persist that government entities had artificially inflated the market, extracting hefty profits before its collapse.
The memory of the crisis lingers among investors, heightening anxiety with every market fluctuation. Critics of the government point to the early 2020 decision by President Hassan Rouhani's government to offload state assets on the Tehran Stock Exchange (TSE) as an act of market manipulation. Initially, the index surged to 2 million points, buoyed by small investors coaxed by the government amidst the rial's devaluation. However, it recoiled to 1.2 million points, erasing the wealth of the investors.
At the time, hardliner critics within the government accused the Rouhani administration of deliberately attracting public investment to alleviate a budget shortfall through sales of stocks, predominantly in public and quasi-public companies.
Controlled largely by the government and its affiliated conglomerates, which command approximately 80 percent of the economy, the Tehran stock market is just one cog in a machine of state-controlled economic entities. With Iran's economic chiefs often appointed by the government itself, the stock market's operational independence is compromised.
As the rial continues to lose value and inflation hovers near 50 percent, many Iranians are scrambling to convert their savings into more stable assets like hard currencies or gold.
The event, attended by 276 members, was marked by the absence of popular engagement, illustrating a crisis of legitimacy within the Islamic Republic.
During the ceremony, where the oldest members formed a transitional presiding board, Alaeddin Boroujerdi, the former Chairman for the Committee for Foreign Policy and National Security of the was appointed the temporary speaker.
Despite the presence of high-profile guests including foreign dignitaries and senior Iranian officials, the mood was undercut by the recent death of President Ebrahim Raisi and his companions and ongoing political disenfranchisement.
The elections that preluded Monday's assembly were distinguished by their low participation. Official figures touted a turnout of 28 to 34 percent across various provinces during the March elections, but independent observers suggest the real numbers were far lower. The May 10 runoff saw an even more voter apathy, with an estimated 90% of Tehran's electorate abstaining.
The widespread disinterest is rooted in the suppression of the 2022-2023 Woman, Life, Freedom protests and the disqualification of numerous candidates by the Guardian Council, which left the electoral field dominated by hardliners. Such actions have only solidified the belief among many Iranians that the current system is incapable of addressing the nation's deep-seated issues, from escalating poverty to systemic corruption.
Supreme Leader Ali Khamenei's message to the new parliamentarians urged them to “foster calm and hope.” Yet, such calls ring hollow against the backdrop of an election where even conservative bases showed reluctance to support a system seen as alienated from the public's needs.
Khamenei also urged them to avoid “useless media competitions and harmful political disputes."
Former parliament chiefs Ali Larijani and Mohammad Bagher Ghalibaf, present at the ceremony, who are potential presidential contenders, represent a political establishment struggling to maintain relevance in a society marked by disillusionment and despair.
