Weekly Market Report

Trading Week: 19 - 23 August 2017

Summary

Main Topics

- Tehran Stock Exchange steps up gains

- Iran Fara Bourse rebounds with 2.3% increase

- Central Bank of Iran cuts interest rate to 15% from 17%

 

Tehran Stock Exchange

The Tehran Stock Exchange accelerated its upward trend this week, with the All-Share Index advancing 1% to close at 82,541. The top performing major sector of the week was Metallic Ore (+6.4%), mostly due to gains by iron ore producer Chadormalu Mining & In­dustrial Co. (CHML +7.2%) and Metals & Mines Development Investment Co. (MADN +9.5%). Construction (-2.3%) dropped the most among the majors sectors as several con­stituents lost ground.

 

The TSE30 index of the thirty largest companies by market capitalization closed up 1.6% at 3,334. Higher metal prices on global commodity markets gave a further boost to several top 30 stocks. In a review of the top 30s index, Omid Investment Management Group (OIMD -0.4%) and Pasargad Bank (BPAS - its ticker is off the trading board) were dropped, while Informatic Services Corp. (INFO +1.2%) and Khorasan Steel Co. (FKAS 0.0%) were added. 

 

This week the Average Daily Trade Volume (ADTV) surged 51% to USD 62 million on higher market appetite for metal and mining companies. Stocks with the highest weekly traded value were Esfahan Mobarakeh Steel Co. (FOLD +2.8%), Tabriz Oil Refining Co. (PNTB +0.37%) and National Iranian Copper Industrial Co. (MSMI +6.7%) with volumes of USD 6.4 million, USD 5.6 million and USD 5.4 million respectively.

 

Iran Fara Bourse

The overall index of the Iran Fara Bourse reversed two weeks of declines, gaining 2.3% over the week to close at 940. However, its ADTV plunged 59% to USD 29 million. In the previous week a block trade including 7% ownership of Maroon Petrochemical Co. (PMRZ -1.9%) had increased the ADTV significantly. Debt securities were the most traded instru­ment on the IFB with total volume over the week of USD 79 million.

 

Foreign Exchange Market

The Iranian rial dropped versus major currencies this week. The Central Bank of Iran raised the official rate of the US dollar by 0.4% to IRR 33,075. On the free market the dol­lar gained 0.6% to IRR 38,398. The euro’s official rate added 0.6% to IRR 39,022, while its free market rate rose 0.3% to IRR 45,141. The official rate of the British pound was quoted down 0.5% at IRR 42,279 but sterling was unchanged on the free market at IRR 48,700.

 

Economic Developments

Bank interest rates on one-year deposits will be reduced to 15% from 17% as of Septem­ber 2, Central Bank of Iran Vice Governor Peyman Ghorbani announced. Short-term de­posit rates will fall to 10%. The CBI has been considering reductions in interest rates fol­lowing the downward trend of inflation since 2015 but has only been able to apply lower rates at a slow pace. Despite the CBI’s target and rate reductions, the interbank rate has not been affected, fluctuating from 20% to 30%. The main reason has been strong de­mand by banks for cash to be able to meet their commitments. The inefficient manage­ment of assets in a number of banks has threatened the industry, leaving them with non-performing loans of over 20%. Some estimates indicate that three years of stagnation in the housing and real estate sector has locked up nearly USD 300 billion of bank deposits. CBI officials announced that with lower interest rates the banks’ commitments would be reduced, which would ease competition to raise cash on the interbank market. However a reduction in the interest rate from 22% over the past two years has not yet achieved this. Some analysts expect higher investment interest in the Tehran Stock Exchange with the latest rate cut.

FX Information

Description

24 August 2017

17 August 2017

% Change

Official USD - IRR

33,075

32,931

0.4

Market USD - IRR

38,398

38,173

0.6

Official EUR - IRR

39,022

38,783

0.6

Market EUR - IRR

45,141

45,012

0.3

Official GBP - IRR

42,279

42,495

(0.5)

Market GBP - IRR

48,700

48,700

0.0

Market Information

Index Info

Close

Unit Change

% Change

%  Change from March 20, 2017

TSE Overall Index - TEDPIX

82,541

799

1.0

7.6

TSE30 Index

3,334

52

1.6

8.4

Iran Fara Bourse Overall Index

940

21

2.3

7.4

Description

This Period

Last Period

Market P/E

6.7

7.0

Trade Statistics

Description

This Period

Last Period

% Change

TSE Average Daily Trade Vol­ume (Million USD) **

62

41

51

IFB Average Daily Traded Val­ue (Million USD) **

29

71

(59)

Industry Index Information

Description

Close

% Change

Wooden Products

59,837

6.4

Metallic Ore

15,562

6.3

Ceramics & Tiles

2,376

5.7

Coal Mining

1,450

5.3

Transportation & Logistics

4,173

5.1

Non-Metallic Ores

2,450

4.7

Base Metals

43,101

3.7

Paper Products

12,506

3.7

Printing & Publishing

196,496

3.5

Oil Products

233,688

2.2

Agriculture

7,306

1.9

TSE All-Share Index

82,542

1.0

Investment

1,905

0.9

Utility Service Providers

196

0.8

IT

12,636

0.3

Machinery & Equipment

16,109

0.2

Metallic Products

30,674

0.2

Chemicals

4,710

0.1

Engineering Services

693

0.1

Leather Production & Products

1,789

0.0

Medical & Measurement Products

10,244

0.0

Oil Drilling & Services

604

0.0

Telecommunication

946

(0.1)

Industrial Conglomerates

7,556

(0.2)

Foods excluding Sugar

3,750

(0.2)

Pharmaceuticals

9,198

(0.3)

Textile

1,349

(0.4)

Automotive

18,054

(0.4)

Banking

570

(0.4)

Machinery & Electric Equipment

499,745

(0.4)

Rubber & Plastics

22,132

(0.6)

Insurance

5,076

(0.7)

Sugar

8,890

(1.0)

Cement

700

(1.3)

Other Financial Services

2,297

(1.3)

Construction

738

(2.3)

Mining

13,306

(12.8)

TSE Top 5 Gainers

Company

Close **

(USD Cents)

% Change

NASI

Iran Refractories Co.  

10.0

23.5

FRVR

Iran Mineral Processing Co.

33.5

17.1

ALIR

Iran Aluminum Co. 

2.6

16.8

MSTI

Motorsazan Iran Tractor Mfg. Co.

20.2

13.9

MNGZ

Iran Manganese Mines Co.

7.3

10.6

TSE Top 5 Value Leaders

Company

Close **
(USD Cents)

Trade Value **

(Million USD)

FOLD

Esfahan Mobarakeh Steel Co.

4.8

6.4

PNTB

Tabriz Oil Refining Co.

14.1

5.6

MSMI

National Iranian Copper Ind. Co.

5.3

5.4

MADN

Metals & Mines Inv. Dev. Co.

3.7

5.4

ALIR

Iran Aluminum Co.

2.6

4.9

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

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