Weekly Market Report

Trading Week: 2 – 4 October 2017

Summary

Main Topics

· Stocks slip ahead of October 15 nuclear deadline in US; dollar gains

· Iran replaces Iraq as Turkey’s main supplier of crude oil

· Unemployment rate falls to 11.7%

 

Tehran Stock Exchange

The TSE All-Share Index (TEDPIX) slipped 0.5% to 85,429 in the first trading week of Oc­tober, which was shortened by public holidays to three days. The TSE-30 index of the 30 largest listed companies fell 0.6% to 3,482. Volumes were low and the average daily trad­ing value fell nearly 28% from last week to USD 53 million.

 

Most of the market decline came on the first day of the week and was not industry specif­ic. Iranian investors may take a relatively defensive approach as they approach the Octo­ber 15 deadline set by Congress for US President Donald Trump to certify Iran’s compli­ance with its 2015 nuclear pact. Trump has certified Iran’s compliance twice but his recent comments have fueled speculation that this time he may at least question Iran’s compli­ance.

 

Monday’s fall was followed by a smaller decline the next day, but the market partly recov­ered on Wednesday. The Automotive sector, which relies extensively on imported parts, fell 4.2% and was a big drag on the TEDPIX. Refineries were down 2.5%, although the sector is still up about 30% over 12 months.  

 

Among the recently listed companies on the TSE, HiWEB experienced its first decline on Tuesday after 10 straight days of gains and pending buy orders, but then bounced back 4.2% on Wednesday. Chodan Sazan Industrial fell 7.1% after gaining 23% last week.

 

Iran Fara Bourse

The IFB Overall Index dropped 1% to 951 after advancing 0.4% last week. Refineries and steel makers fell. Maroun Petrochemical, a large-cap olefin producer, rose 4.6% on the last day to limit the decline in the index. Newly listed Rishmac Co. posted three consecu­tive days of 5% gains, the maximum daily limit. Iran & Shargh Leasing Company is ex­pected to hold its IPO next week, according to media reports on Tuesday. The company expects revenues of USD 7.3 million and net income of USD 2.7 million for the financial year ending December 2017. Its IPO would be the seventh public offering since March. 

 

Foreign Exchange Market

On the foreign exchange market, the US dollar gained 0.7% to IRR 39,375, slightly more than its 0.6% increase in the official rate to just above the IRR 34,000 level. Considering the level of speculation around Trump’s mid-October report on Iran’s compliance and the increase in the official exchange rate, it would seem that the fall in the rial has been limited so far.

 

Economic Development

Iran’s exports of crude oil to Turkey increased 142% in the first seven months of 2017 compared to the same period last year, according to Turkey’s Anadolu Agency. Turkey imported 7.4 million tonnes of crude oil in that period, or approximately 255,000 barrels per day (bpd). The increase means Iran has replaced Iraq as the major supplier of Tur­key’s oil, raising its market share to just above 50 percent.

 

The jump in Iran’s oil exports to Turkey comes as India is reducing its imports after Iran refused to accept conditions for development of the giant Farzad B gas field. India used to import around 500,000 bpd from Iran but now has a target of 369,000 this year, according to Reuters. 

 

Iran’s unemployment rate fell to 11.7% in the summer from 12.6% in the previous quarter when presidential elections were held, the Statistical Centre of Iran reported. The jobless rate is 1% lower than 12 months earlier but the employment rate remains lows at 41%, while unemployment among young people aged 15 to 29 years stays high at 24%.

 

Producer prices rose 1.4% in the month ending September 22, the Central Bank of Iran reported. The PPI index is up 10.7% over 12 months. The industrial/construction index rose the most, gaining 2.7% on a monthly basis.

FX Information

Description

5 October 2017

28 September 2017

% Change

Official USD - IRR

34,002

33,805

0.6

Market USD - IRR

39,375

39,111

0.7

Official EUR - IRR

39,980

39,666

0.8

Market EUR - IRR

46,469

46,471

(0.0)

Official GBP - IRR

45,038

45,231

(0.4)

Market GBP - IRR

52,400

51,800

1.2

Market Information

Index Info

Close

Unit Change

% Change

%  Change from March 20, 2017

TSE Overall Index - TEDPIX

85,429

(389)

(0.5)

11.3

TSE30 Index

3,482

(21.5)

(0.6)

13.2

Iran Fara Bourse Overall Index

951

(9.9)

(1.0)

8.7

Description

This Period

Last Period

Market P/E

6.8

6.8

Trade Statistics

Description

This Period

Last Period

% Change

TSE Average Daily Trade Vol­ume (Million USD) **

53

74

(28)

IFB Average Daily Traded Val­ue (Million USD) **

112

57

96

Industry Index Information

Description

Close

% Change

IT & Communications

169

4.0

Transportation & Logistics

4,231

2.0

Telecommunication

1,043

1.9

Engineering Services

686

0.9

Banking

567

0.02

Utility Service Providers

209

0.0

Textile

1,301

(0.02)

Industrial Conglomerates

7,838

(0.02)

Machinery & Electric Equipment

493,362

(0.2)

Paper Products

12,890

(0.2)

Base Metals

43,952

(0.3)

Chemicals

5,020

(0.3)

IT

12,703

(0.3)

TSE All-Share Index

85,430

(0.5)

Pharmaceuticals

9,227

(0.5)

Printing & Publishing

201,235

(0.6)

Metallic Ore

16,515

(0.6)

Insurance

5,008

(0.6)

Investment

1,950

(0.7)

Leather Production & Products

2,081

(0.8)

Cement

668

(0.9)

Metallic Products

31,951

(1.0)

Construction

688

(1.3)

Agriculture

6,990

(1.3)

Machinery & Equipment

15,902

(1.6)

Other Financial Services

2,202

(1.6)

Foods excluding Sugar

3,660

(1.7)

Rubber & Plastics

22,040

(1.8)

Oil Products

257,450

(2.5)

Non-Metallic Ores

2,310

(2.6)

Mining

12,230

(2.8)

Wooden Products

54,748

(2.8)

Coal Mining

1,286

(3.0)

Sugar

8,625

(3.7)

Ceramics & Tiles

2,258

(3.8)

Automotive

17,043

(4.2)

Oil Drilling & Services

457

(4.7)

Medical & Measurement Products

9,227

(9.9)

TSE Top 5 Gainers

Company

Close **

(USD Cents)

% Change

VAMCO

Vehicle Axle Mfg. Co.

7.2

13.5

BAFG

Bafgh Mining Co.

38.7

9.2

ROOI

Iran Zinc Mines Dev. Co.

7.3

7.5

SAHD

Shahed Investment Co.

3.5

4.6

SKBV

Noor Kosar Iranian Inv. Co.

3.3

4.5

TSE Top 5 Value Leaders

Company

Close **
(USD Cents)

Trade Value **

(Million USD)

HWEB

Hi Web

11.7

44.2

CHDN

Chodan Sazan Industrial Co.

7.6

4.7

APPE

Asan Pardakht Persian Co.

35.3

3.3

ALIR

Iran Aluminum Co.

4.7

2.9

SIPA

SAIPA Group

2.9

2.8

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

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