Iran's Stock Market (TEPIX) vs. Economy, What's Really Going On?

M. Ahmadinejad (Wikipedia)
According to Reuters, AFP, and Bloomberg articles I've read recently (see below), it appears that Iran's economy is in bad shape, or even in a crisis because of international sanctions. Iran is suffering from high unemployment, high inflation, and its currency (the rial) just made a new low priced in the U.S. Dollar. But have you seen a chart of the Tehran Stock Exchange Index (TEPIX) since 2007? It tripled in 5 years, and it just broke out of a 1.5 year sideways channel. See the chart below.

First, the news.

Iran's rial currency dives to historic low (Reuters, 9/29/2012) - "The Iranian rial slumped on Saturday to a historic low against the U.S. dollar, according to Iranian media and currency tracking websites." (9/29/2012)

Iran's rial dives 6 percent to new record low (AFP/Ahram Online, 9/30/2012)
"New plunge suggests Iranian families are rushing to convert money into dollars and precious metals"

Unemployment mounts as Iran's economy falters (Reuters, 9/19/2012) - "A wealthy Iranian businessman sits in the lobby of one of Dubai's most luxurious hotels, shaking his head as he laments the state of Iran's economy."

Israel finance minister says Iran economy "on verge of collapse" (Reuters, 9/30/2012) - "Iran's economy is edging towards collapse due to international sanctions over its controversial nuclear programme, Israeli Finance Minister Yuval Steinitz said on Sunday"; "Iran's oil income said to be down by over $40 billion." (and see a chart of Iran's oil production at SoberLook)

But, Iran's President Mahmoud Ahmadinejad recently told CNN that it's all a lie (via "Iran’s Ahmadinejad Says Talks Will Progress After U.S. Election").

“Many of the European companies are currently, as we speak, conducting trade with us,” he said. “Some of them do it in hiding. They do secretly, but they do conduct that trade. You hear some news and you believe that Iran’s economy is now in chaos. It is not so.”

And now AFP/AhramOnline is reporting that "Israeli Foreign Minister Avigdor Lieberman predicts international sanctions on Tehran could provoke 'Iranian-style Tahrir revolution'".

What's interesting is the Tehran Stock Exchange Index (TEPIX) keeps making new all-time highs. The index tripled in five years (since October 2007). You can view the chart at or at I'm trying to figure out what's really going on here.

Is Iran's stock market rising because of EPS growth?

Is the TEPIX in a super equity bubble that has completely disconnected from fundamentals?

Is the TEPIX just moving inversely with its debased currency and being priced like a "real" asset? (inflation hedge)

Or is the index being manipulated by the Iranian government?

For an informative explanation, I found a presentation on Iran's stock market that was given by an economics professor at the 2011 AFE conference. He remains skeptical of the move for a variety of reasons. Here is the Google Docs preview of the presentation. The actual power point is available here (.pps) via the AFE conference's website.
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