Weekly Market Report

Trading Week Ended: 21 - 25 January, 2017

Summary

Main Topics

- TSE All-Share Index ends the week down 1.7% as Mellat Bank tumbles

- Iran Fara Bourse slips 1%

- Iran’s inflation creeps up to 10-month high of 9.6%

 

Tehran Stock Exchange

The TSE All-Share Index ended its worst trading week in seven months down 1.7% at 78,049 following steep losses in the Banking sector as Mellat Bank returned to trading. Most sectors ended the week little changed despite the 9.7% fall in Banking which had the most impact on the main index of the TSE. Mellat Bank (BMLT -37.3%) sold off immedi­ately when its ticker reopened on Tuesday after a six-month suspension. Several banks were taken off the trading board last July when the Central Bank of Iran compelled them to adjust their financial reports according to International Financial Reporting Standards. The cost for Mellat Bank involved adding IRR 12,000 billion (approx. USD 321 million) to its reserves to adjust for non-performing loans, employees’ pensions and some other payable accounts. Some experts with knowledge of the matter expect Saderat Bank and Tejarat Bank to resume trading on the TSE in the next days with similar falls forecast. This week the top performing major sector was Machinery & Equipment (+3.7%) owing mainly to positive performances of Iran Tractor Manufacturing Co. (TRIR +11.9%). TRIR has re­vised upwards its projected net income for the financial year ending March 20 by 19% to IRR 721 billion (approx. USD 18.8 million). The company is forecasting improved operat­ing income based on higher sales prices and lower costs of marketing and advertising.

 

The TSE30 index of the thirty largest companies by market capitalization fell 3.5% to close at 3,150. The top 30s overall index was mainly hit by Mellat Bank and Iran Transfo Corp. (TRNS -9.5%). Iran Transfo has dropped 39% in the last three months following its weaker than expected performance in the first three quarters of the financial year ending March 20 when net income reached IRR 322 billion (approx. USD 8.4 million), just 30% of the com­pany’s projection for the whole year. The biggest gainer among the top 30s was Khouzestan Steel Co. (FKHZ +4.5%).

 

This week the Average Daily Trade Volume fell 43% to USD 45 million due to lower trade volume in debt securities and fewer block trades. The stocks posting the highest trading volume over the week were led by Mellat Bank (BMLT -37.3%), SAIPA Group (SIPA -2.3%) and Iran Khodro (IKCO -4.2%) with USD 8.9 million, USD 5.9 million and USD 5.3 million in trades respectively.

 

Iran Fara Bourse

The overall index of the Iran Fara Bourse (IFB) market, closed at 837, down 1% from last week. The ADTV fell 9% to USD 41 million. Debt securities again accounted for the larg­est trading volume, with USD 119 million traded.

 

Foreign Exchange Market

On the FX market the official rate of the US dollar remained unchanged, quoted by the CBI at IRR 32,360. However the dollar strengthened against the rial on the free market, rising 1.1% to IRR 38,211. The CBI added 1.1% to the official rate of the euro at IRR 34,806, while in contrast its free market rate slipped 0.7% to IRR 42,045. Sterling added 3.1% to IRR 40,965 according to the CBI’s official rate, and rose 1.9% on the free market to IRR 49,000.

 

Economic Developments

The Central Bank of Iran released the consumer price index for the 10th month of the Ira­nian calendar year ended January 19 showing a month on month inflation rate of 0.8%. Telecommunications recorded the highest monthly rise of 5.8%, while Tobacco was the category with lowest inflation, posting no significant monthly change. Year on year con­sumer inflation came in at 9.6%, up from 9.2% in the previous month. Iran’s inflation rate has remained below 10% since late 2015, while the latest YoY figure is the highest since January 2016. According to the CBI report, Medical Care has the highest YoY price growth at 17.2%, while Furniture & Home Appliances was the lowest with 6.3% growth.

 

The CBI also released latest data on the Tehran housing market for the month ended Jan­uary 19 showing home sales at 16,749, up 37% from the previous month and 3% higher than the same month last year. The average price of one square meter of residential space during the reported month was reported at USD 1,175 which is 1.4% more than a month ago and 9.9% higher than one year earlier. Home sales in Tehran during the first 10 months of the Iranian calendar year totaled 134,176, almost 8% higher than the same year-ago period. The average price of one square meter of sold residential space over the 10-month period was up 5% at USD 1,142.

FX Information

Description

26 January 2017

19 January 2017

% Change

Official USD - IRR

32,360

32,366

(0.0)

Market USD - IRR

38,211

37,784

1.1

Official EUR - IRR

34,806

34,438

1.1

Market EUR - IRR

42,045

42,343

(0.7)

Official GBP - IRR

40,965

39,731

3.1

Market GBP - IRR

49,000

48,100

1.9

Market Information

Index Info

Close

Unit Change

% Change

%  Change from March 20, 2016

TSE Overall Index—TEDPIX

78,049

(1,333)

(1.7)

(2.7)

TSE30 Index

3,150

(112)

(3.5)

(6.8)

Iran Fara Bourse Overall Index

837

(8)

(1.0)

3.9

Description

This Period

Last Period

Market P/E

7.3

7.4

Trade Statistics

Description

This Period

Last Period

% Change

TSE Average Daily Trade Vol­ume (Million USD) **

45

80

(43)

IFB Average Daily Traded Val­ue (Million USD) **

41

45

(9)

Industry Index Information

Description

Close

% Change

Mining

9,886

16.5

Machinery & Equipment

16,108

3.7

Wooden Products

58,128

2.6

Base Metals

34,766

1.1

Construction

720

1.0

Cement

724

0.9

IT

8,814

0.9

Sugar

5,626

0.5

Metallic Products

39,687

0.2

Engineering Services

843

0.05

Coal Mining

1,265

0.0

Medical & Measurement Products

10,244

0.0

Paper Products

7,894

0.0

Utility Service Providers

182

(0.2)

Foods excluding Sugar

3,634

(0.2)

Industrial Conglomerates

7,263

(0.3)

Telecommunication

858

(0.3)

Pharmaceuticals

9,301

(0.5)

Agriculture

7,069

(0.7)

Non-Metallic Ores

2,166

(0.8)

Ceramics & Tiles

2,035

(0.9)

Chemicals

4,736

(1.0)

Textile

1,515

(1.0)

Investment

1,744

(1.3)

Transportation & Logistics

3,918

(1.5)

Automotive

17,547

(1.5)

TSE All-Share Index

78,049

(1.7)

Oil Products

191,131

(2.0)

Leather Production & Products

1,599

(2.1)

Metallic Ore

14,319

(2.3)

Insurance

5,043

(2.4)

Printing & Publishing

114,028

(3.0)

Rubber & Plastics

20,086

(3.2)

Other Financial Services

2,144

(3.4)

Oil Drilling & Services

694

(3.5)

Machinery & Electric Equipment

446,159

(5.3)

Banking

629

(9.7)

TSE Top 5 Gainers

Company

Close **

(USD Cents)

% Change

SGAZ

Shoga Gas & Glass Co.

9.2

20.0

IAGM

Iran Argham Co.

14.5

19.7

SHSI

Sina Chemical Industries Co.

33.0

19.4

CHAR

Charkheshgar Co.

5.4

16.9

TAMI

Silica Sand Mfg. Co.

7.3

16.5

TSE Top 5 Losers

Company

Close **

(USD Cents)

% Change

BMLT

Mellat Bank

3.2

(37.3)

TRNS

Iran Transfo Corp.

30.3

(9.5)

SSOF

Soufian Cement Co.

7.4

(9.3)

JOSH

Jooshkab Yazd Industries Co.

29.9

(7.3)

MRAM

Mahram Mfg. Co.

66.1

(7.1)

TSE Top 5 Value Leaders

Company

Close **
(USD Cents)

Trade Value **

(Million USD)

BMLT

Mellat Bank

3.1

8.9

SIPA

SAIPA Group

2.9

5.9

IKCO

Iran Khodro

7.4

5.3

AZAB

Azarab Industries Co.

9.8

3.2

FKHZ

Khozestan Steel Co.

9.5

2.4

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

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