Weekly Market Report

Trading Week Ended: 28 Jan - 1 Feb, 2017

Summary

Main Topics

- The Tehran Stock Exchange All-Share Index falls further on more banking sector losses

- The Iran Fara Bourse posts 1.5% gain in IFB overall index

- Iran’s non-oil trade surplus continues to rise

 

Tehran Stock Exchange

The Tehran Stock Exchange All-Share Index fell for a second straight week, losing 0.8% from last week’s close to end at 77,414. The TSE’s main index was again pulled down by the banking sector (-5.6%). The ticker of Tejarat Bank (BTEJ -33.8%) plunged on reopen­ing this week after a six-month absence, dragging down the banking sector and the wider index. Similar to Mellat Bank (BMLT -4.1%), which resumed trading a week earlier, Tejarat Bank was obligated by the Central Bank of Iran to adjust its financial statements according to International Financial Reporting Standards. This led to a revision of its report for the last financial year ending March 20, 2016, transforming a net profit of IRR 6,049 billion (approx. USD 159 million) into a net loss of IRR 4,730 billion (approx. USD 124 million). The bank had to increase its reserves under IFRS by IRR 13,064 billion (approx. USD 343 million). For the current financial year ending March 19, Tejarat Bank has projected a net loss of IRR 4,260 billion (approx. USD 112 million) based on its third quarter performance. Saderat Bank is due to resume trading on the market soon in the wake of Mellat Bank and Tejarat Bank, and its share price is also expected to come under pressure due to its IFRS obligations. The top performing sector of the week on the TSE was Automotive (+4.3%). SAIPA Group (SIPA +10.7%) suddenly saw solid market demand, becoming the main driver of the Automotive sector and the TSE index, compensating in part for the negative impact of Tejarat Bank. Some market analysts believe the jump in SIPA’s share price to be speculative.

 

The TSE30 index of the thirty largest companies by market capitalization fell 1.1% to close at 3,116. Tejarat Bank was the weakest of the top 30, while SAIPA Group was the biggest gainer.

 

Unlike last week’s fall in activity, the Average Daily Trade Volume rose 11% to USD 50 million. The stocks with the highest daily volume were led by SAIPA Group, Iran Khodro and Mellat Bank with trading amounting to USD 23.5 million, USD 9.0 million and USD 6.3 million respectively.

 

Iran Fara Bourse

The Iran Fara Bourse (IFB) market, bucked the trend with its overall index advancing 1.5% to close at 849.6. The ADTV of the IFB slipped 6% to USD 42 million. Debt securities re­mained the most popular instrument on the IFB, recording a total of IRR 4,940 billion (approx. USD 130 million) in trades.

 

Foreign Exchange Market

Major currencies were little changed against the rial on the FX market over the week. The Central Bank of Iran quoted the official rate of the US dollar at IRR 32,363, up just 0.01% from last week. The free market rate of USDIRR slipped 0.4% to 38,041. The official euro rate strengthened by 0.3% to IRR 34,920, while its free market rate fell 2.2% to IRR 41,135. CBI raised by 0.05% the official rate of sterling to IRR 40,985, while the free mar­ket rate of the British pound dropped 1% to IRR 48,500.

 

Economic Developments

The Islamic Republic of Iran Customs Administration has released its preliminary report for the country’s non-oil trade balance for the first 10 months of the Iranian calendar year ended January 19. It reported a surplus of USD 288 million compared with a deficit of USD 1.3 billion over the same year-ago period and representing an increase of 423% over the surplus earned in the first nine months of this year. In the reported period Iran export­ed 102 million tonnes of goods valued at USD 35.2 billion. Compared with the same peri­od last year, exported tonnage rose 33% while their value rose 8.3%. Petrochemical prod­ucts led the list of non-oil exports, earning USD 10.8 billion, up 1.7% from the same year-ago period. Next in line were gas condensates which gained 59% to USD 6.0 billion and natural gas which fell 8.7% to USD 1.9 billion. The top three destinations for Iranian ex­ports were China (up 9.5% to USD 6.5 billion), the UAE (down 7% to USD 5.6 billion) and Iraq (little changed at USD 5.0 billion). In the reported 10 months, Iran’s imports grew 3.2% from the same year-ago period to USD 34.9 billion, while tonnage fell 2.8%. Corn feedstock, soybean and automobile spare parts for vehicles with 2000 cc engines were the top three import items, worth USD 1.1 billion, USD 700 million and USD 600 million respectively. These three items account for just 7.5% of the country’s total imports, indi­cating the diversified nature of imports compared to exports. China was the main source of Iran’s imports, accounting for USD 8.4 billion (down 1.2% from last year), followed by UAE with USD 5.4 billion (down 11%) and South Korea with USD 2.7 billion (down 8.4%). In contrast Iran’s imports from Germany jumped 36% to USD 1.4 billion.

FX Information

Description

1 February 2017

26 January 2017

% Change

Official USD - IRR

32,363

32,360

0.01

Market USD - IRR

38,041

38,211

(0.4)

Official EUR - IRR

34,920

34,806

0.3

Market EUR - IRR

41,135

42,045

(2.2)

Official GBP - IRR

40,985

40,965

0.05

Market GBP - IRR

48,500

49,000

(1.0)

Market Information

Index Info

Close

Unit Change

% Change

%  Change from March 20, 2016

TSE Overall Index—TEDPIX

77,414

(634

(0.8)

(3.5)

TSE30 Index

3,116

(33)

(1.1)

(7.8)

Iran Fara Bourse Overall Index

849

12

1.5

5.5

Description

This Period

Last Period

Market P/E

7.2

7.3

Trade Statistics

Description

This Period

Last Period

% Change

TSE Average Daily Trade Vol­ume (Million USD) **

50

45

11

IFB Average Daily Traded Val­ue (Million USD) **

42

45

(6)

Industry Index Information

Description

Close

% Change

Mining

11,880

20.2

Printing & Publishing

123,470

8.3

Wooden Products

62,907

8.2

Automotive

18,296

4.3

Agriculture

7,327

3.7

Paper Products

8,100

2.6

Foods excluding Sugar

3,688

1.5

Sugar

5,687

1.1

Non-Metallic Ores

2,189

1.1

Chemicals

4,756

0.4

Machinery & Equipment

16,169

0.4

Base Metals

34,857

0.3

Investment

1,748

0.2

Coal Mining

1,265

0.0

Engineering Services

843

0.0

Medical & Measurement Products

10,244

0.0

Oil Products

190,828

(0.2)

Utility Service Providers

182

(0.2)

IT

8,786

(0.3)

Ceramics & Tiles

2,021

(0.7)

Other Financial Services

2,129

(0.7)

Machinery & Electric Equipment

442,835

(0.7)

TSE All-Share Index

77,415

(0.8)

Transportation & Logistics

3,883

(0.9)

Metallic Products

39,274

(1.0)

Telecommunication

849

(1.1)

Cement

716

(1.1)

Construction

711

(1.2)

Pharmaceuticals

9,182

(1.3)

Industrial Conglomerates

7,111

(2.1)

Metallic Ore

13,918

(2.8)

Textile

1,472

(2.8)

Insurance

4,888

(3.1)

Rubber & Plastics

19,384

(3.5)

Leather Production & Products

1,525

(4.6)

Banking

594

(5.6)

Oil Drilling & Services

638

(8.2)

TSE Top 5 Gainers

Company

Close **

(USD Cents)

% Change

TAMI

Silica Sand Mfg. Co.

8.8

20.2

NSPS

Pars Refractories Co.

15.1

18.2

DRKH

Derakhshan Tehran Mfg. Co.

10.8

18.1

MRGN

Margarin Co.

16.1

16.3

SBHN

Behbahan Cement Co.

51.1

14.9

TSE Top 5 Losers

Company

Close **

(USD Cents)

% Change

BTEJ

Tejarat Bank

1.7

(33.8)

YASA

Iram Yasa Tire & Rubber Co.

2.9

(12.5)

VLMT

Mellat Leasing Co.

4.9

(12.2)

NIRO

Nirou Trans Co.

16.6

(10.8)

SADB

Ardabil Cement Co.

33.4

(9.8)

TSE Top 5 Value Leaders

Company

Close **
(USD Cents)

Trade Value **

(Million USD)

SIPA

SAIPA Group

3.2

23.5

IKCO

Iran Khodro

7.6

9.0

BMLT

Mellat Bank

3.0

6.3

BTEJ

Tejarat Bank

1.7

5.4

TAMI

Silica Sand Manufacturing Co.

8.8

3.5

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

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