The stock market and the debt market are two completely separate and independent sectors that have separate actors and only the interest rate that connects them.

Tehran, April. 06 (SENA)-Alireza Tavakoli Kashi, a capital market expert, told the Securities  and Exchange News Agency (Sena): "When the situation in the capital market is not good, it is natural for some people to sell their shares and spend part of their money on a bank or somewhere else to deposit; But the statement that money leaves the capital market as the volume of debt market transactions increases is a false one.

The capital market expert explained: "Before the formation of the debt market, this money was taken out of the capital market and placed in bank deposits, but now in the market itself, it is converted from shares into bonds. However, it should be noted that for every purchase, there is a sale.

Tavakoli Kashi continued: "What can be seen in the volume of transactions is a mirror of several processes: First, in the banking system, banks that carry out repo operations (repurchase agreements) with the Central Bank, in exchange for these operations, must issue securities." Do business with the central bank. That trade is done in this market and is usually short-lived and returns after a few weeks with a reverse trade.

He pointed out: In this way, both the primary and secondary trades show their 15-day interval in the trading statistics. If this action is a transfer of securities and its return to the previous point and is not in fact a financing transaction.

Tavakoli Kashi considered the next factor to be the sale of government bonds and said: the sale of government bonds, whether done in the central bank or in the capital market, will ultimately be reflected in the OTC market.

The volume of transactions that the government itself has in particular is evident in the weekly reports published by the Debt Management Center of the Ministry of Economy and the Central Bank. A small part of it is related to the movement of shareholders' money between stocks and securities, the performance of which can be seen in trading statistics.

The capital market expert continued: "Only a small percentage of these securities are initially sold and cashed from the market and financed by the government;" At the same time, its buyers in the debt market are mainly fixed income funds and have to buy bonds. Or it is the banks themselves that, according to the regulations of the central bank, are obliged to keep a part of their assets in the form of securities.

Tavakoli Kashi stated in the end: in the absence of the debt market, the central bank did this, but now the place of the transaction has changed and it has been transferred to the OTC market, which is also visible to us.


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