Weekly Market Report

Trading Week : 22 - 26 July 2017

Summary

Main Topics

- Tehran Stock Exchange rises 1.7%, boosted by metals and mining

- Iran Fara Bourse ends little changed with focus on debt securities

- Iran’s inflation falls below 10% for the first time in six months

 

Tehran Stock Exchange

The Tehran Stock Exchange recorded its strongest gains over one week since mid-December 2016 with the All-Share Index advancing 1.7% to close at 81,509. Metal and mining companies were in demand for a second week as Base Metal (+11.4%) and Metal­lic Ore (+10.8%) became the top performing major sectors. Sugar (-5.3%) led losers. Large-cap companies have issued promising quarterly reports recently, with many compa­nies releasing their figures at the time of their AGMs for the financial year ending March 20, 2017. This has led to sudden upward moves in stock prices when tickers have reo­pened on the TSE immediately after the annual shareholder meetings. However a rush by investors for such companies – mostly in metals and mining – has led to corresponding pressure on other stocks, which unexpectedly lost the market’s focus. Until a few weeks ago, market demand was spread over a wide range of stocks in different sectors, mostly for small-cap companies. For the first time in over a year, blue chips are experiencing sig­nificant market demand again.

 

The TSE30 index of the thirty largest companies by market capitalization closed at 3,244, up 2.8% on the week. Golgohar Mining & Industrial Co. (GOLG +18.0%), the iron ore pro­ducer, and National Iranian Copper Industries Co. (MSMI +15.0%) led gainers. Among the top 30s, Iran Khodro (IKCO -4.8%) saw the steepest decline. 

 

This week the Average Daily Trade Volume (ADTV) rose 24% to USD 71 million. Stocks most traded by value were led by Behpardakht Mellat Co. (PRKT +22.7%), Esfahan Mo­barakeh Steel Co. (FOLD +12.5%) and National Iranian Copper Industries Co. (MSMI +15.0%) with USD 39.7 million, USD 16.0 million and USD 7.8 million respectively. Behpardakht, one of the first and leading e-payment companies, has gained 29% since going public on July 18. Mellat Bank is the majority shareholder of the TSE’s newcomer.

 

Iran Fara Bourse

The overall index of the Iran Fara Bourse market ended the week barely changed at 920, while its ADTV increased 18% to USD 39 million. As in previous weeks, debt securities were the most traded instrument on the IFB with total volume of USD 128 million.

 

Foreign Exchange Market

The Iranian rial fell against major currencies in the week ending July 27. The Central Bank of Iran added 0.2% to the official rate of the US dollar, quoting it at IRR 32,715. The US dollar free market rate stood at IRR 37,907 for a one-week gain of 0.6%. The official euro rate was set 1.8% higher at IRR 38,419 while its free market rate rose 1.7% to IRR 43,861. The CBI raised the official rate of the British pound by 1.0% to IRR 43,000, while its free market rate advanced 1.3% to IRR 49,550.

 

Economic Developments

Inflation fell 0.1% in the Iranian month of Tir ending July 22, according to Central Bank of Iran data which saw a monthly drop in the Consumer Price Index for the first time in two years. Figures for the fourth month of the Iranian calendar year showed that on a yearly basis inflation fell to 9.9% from 11.0%, dropping for the third consecutive month and dip­ping below 10% for the first time in six months.

 

Food & Beverage posted the largest price decline of 1.5% over the latest month, while the Restaurant & Café category showed the highest price increases of 1.4%. Over 12 months, Food & Beverage has seen the highest inflation rate of 13.6% while Tobacco, up 0.2%, has had the smallest price growth. The CBI report suggests that pressure from rising pric­es of foods and beverages has diminished after four months and this is bringing down the overall inflation rate. Health Care and Education – two groups that were previously leading the inflation table – have fallen to less than 11% from nearly 20% over the last 12 months.

FX Information

Description

27 July 2017

19 July 2017

% Change

Official USD - IRR

32,715

32,659

0.2

Market USD - IRR

37,907

37,684

0.6

Official EUR - IRR

38,419

37,732

1.8

Market EUR - IRR

43,861

43,139

1.7

Official GBP - IRR

43,000

42,554

1.0

Market GBP - IRR

49,550

48,900

1.3

Market Information

Index Info

Close

Unit Change

% Change

%  Change from March 20, 2017

TSE Overall Index - TEDPIX

81,509

1,346

1.7

6.2

TSE30 Index

3,244

88

2.8

5.4

Iran Fara Bourse Overall Index

920

0.2

0.03

5.1

Description

This Period

Last Period

Market P/E

7.0

7.0

Trade Statistics

Description

This Period

Last Period

% Change

TSE Average Daily Trade Vol­ume (Million USD) **

71

57

24

IFB Average Daily Traded Val­ue (Million USD) **

39

33

18

Industry Index Information

Description

Close

% Change

Coal Mining

1,350

16.7

Base Metals

39,780

11.4

Metallic Ore

14,403

10.8

Cement

742

3.9

Construction

803

2.4

Mining

16,299

2.2

Non-Metallic Ores

2,467

1.9

TSE All-Share Index

81,509

1.7

Machinery & Equipment

16,504

1.6

Ceramics & Tiles

2,291

1.5

IT

13,088

1.3

Industrial Conglomerates

7,637

1.2

Metallic Products

30,871

1.0

Insurance

5,132

0.8

Printing & Publishing

173,709

0.8

Oil Products

217,098

0.7

Investment

1,931

0.7

Engineering Services

693

0.04

Pharmaceuticals

9,237

0.03

Oil Drilling & Services

604

0.0

Banking

576

0.0

Leather Production & Products

1,789

0.0

Medical & Measurement Products

10,244

0.0

Textile

1,376

0.0

Wooden Products

56,985

0.0

Chemicals

4,745

(0.1)

Other Financial Services

2,426

(0.6)

Foods excluding Sugar

3,826

(1.0)

Telecommunication

955

(1.0)

Utility Service Providers

194

(1.0)

Automotive

18,289

(1.1)

Rubber & Plastics

23,375

(1.3)

Paper Products

13,240

(1.5)

Agriculture

7,134

(2.0)

Transportation & Logistics

3,499

(2.7)

Machinery & Electric Equipment

508,261

(3.1)

Sugar

9,095

(5.3)

TSE Top 5 Gainers

Company

Close **

(USD Cents)

% Change

SLMN

Salemin Co.

9.4

61.1

BAHN

Bahonar Copper Industries Co.

15.5

44.0

PASH

Pakshoo Industrial Co.

41.3

23.0

PRKT

Behpardakht Mellat Co.

59.5

22.7

GOLG

Golgohar Mining & Industrial Co.

6.3

18.0

TSE Top 5 Value Leaders

Company

Close **
(USD Cents)

Trade Value **

(Million USD)

PRKT

Behpardakht Mellat Co.

59.5

39.7

FOLD

Esfahan Mobarakeh Steel Co.

4.4

16.0

MSMI

National Iranian Copper Ind. Co.

4.8

7.8

RKSH

Iran Kish Credit Card Co.

15.8

6.5

BAHN

Bahonar Copper Industries Co.

15.6

6.2

** All figures in USD are converted from IRR at the free market rate

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