Iran's stock market has been booming for months, despite a collapse in the country's economy and a rampant coronavirus that has struck the country hard. Even President Hassan Rouhani has sounded surprised.
Rouhani has described the market's performance as "astounding," a view echoed by analysts and diplomats, who have been scratching their heads to understand why disease, runaway inflation at 35% and a shrinking economy have not sent the stock market in the opposite direction.
Iranian investors this year seem undeterred by contagion, the plunging value of the Iranian currency, the rial, or U.S. sanctions. They have sent the market soaring, turning Iran's stock market into the best-performing index in the world. Since the country went into lockdown in mid-March, the index has doubled, to the delight of Iranian government hardliners.
Government leaders and political loyalists say the boom simply shows how the beleaguered country will be able to weather U.S. sanctions long term.
"As Iran's bourse has developed, [our enemies] become nervous," Rouhani has said.
The Iranian stock market started to perform well before the coronavirus emerged in a country ill-prepared to contain or curb it. As bad economic news has multiplied - last year, the economy shrank by around 8% - the market has soared.
Iran has lost about 80% of its oil revenue and has seen foreign income and investments fall off by $200 billion. In the meantime, daily trading volumes on the exchange have jumped from $100 million to $400 million.
With each turn of the economic screw, there has been a surge in investments, much of it institutional and powered by state-owned foundations, government investment organizations, banks, pension funds, and organizations and companies owned by the Islamic Revolutionary Guards.
But ordinary Iranians have also been piling in, noted Sara Bazoobandi, a business and economics analyst.
In a commentary for the Atlantic Council, a New York-based research group, she said the small investors are doing so in the "hope of either generating safe and steady income or protecting the value of their life savings."
She added that for the 8 million Iranians registered through a portal to trade, "the stock exchange seems to be the safest place to hedge the value of their assets and to protect their livelihood."
The result has been a tenfold increase in the past two years in the Tehran Stock Exchange (TEDPIX).
For ordinary Iranians, the domestic stock exchange is one of the few places they can lodge their savings, say analysts. Inflation is eating away its value, there is further erosion from the plunging value of the rial, and U.S. sanctions have blocked investment channels outside the country in other stock markets, they say.
With little other positive economic news, Iranian leaders have been encouraging the boom, which is replenishing sagging state revenues. The government has been privatizing state-owned firms. Last month, Iranians were permitted to trade their holdings - called "justice shares" - in the state-owned firms that the government gave to low-income families years ago.
But inside and outside Iran, warnings of a bubble ready to burst have emerged. The value of the main currency has jumped nearly 100% since mid-February.
The online news outlet Alef has dubbed the runaway stock market an "Achilles' heel." Others say the disconnect between the market and economic realities will result in millions of Iranians losing their life savings.
"Maintaining the growth of the stock exchange will be challenging both for the companies and the government," according to the Atlantic Council's Bazoobandi.
"The government of President Rouhani has failed to deliver his election campaign promises, especially the economic ones. Various episodes of popular uprising that took place in Iran over the past decade have already confirmed that the state-citizen relationships in Iran are weakening, and the government's use of suppression and violence will dominate those relations. The burst of the stock exchange bubble could crush the last smidgen of confidence and hope in the economy and could lead to another episode of socioeconomic uprising in Iran," she said.
Hossein Tousi, a member of Iran's Chamber of Commerce, is worried.
On an Iranian economic news website recently, he said, "As all markets have fallen, crude prices have fallen sharply. But in our market, the situation is upside down. It is clear that it is a bubble."