Weekly Market Report

Trading Week Ended: 7-11 January, 2017

Summary

Main Topics

· TSE All-Share Index slips 0.5% despite 4.1% gain by Metallic Ore sector.

· TSE30 index fell 0.3% to close at 3,218.

· This week the Average Daily Trade Volume (ADTV) of the TSE fell 43% to USD 37 million.

· Iran Fara Bourse overall index falls 1.7%

· TSE All-Share Index gains 29% in 2016 with top sector Automotive more than dou­bling

 

Tehran Stock Exchange

The Tehran Stock Exchange All-Share Index posted a fifth straight week of losses, closing down 0.5% at 78,622. As in previous weeks most sectors fell slightly. The top performer among major sectors over the week was Metallic Ore (+4.1%) with investors encouraged by the latest reports from listed companies. Sector leaders Golgohar Mining & Industrial Co. (GOLG +2.6%) and Chadormalu Mining & Industrial Co. (CHML +6.3%) released their third quarter reports for the financial year ending March 20, 2017. Golgohar earned IRR 5,807 billion (approx. USD 148 million) net profit over the nine months, representing 92% of its already raised profit outlook for the financial year. The company had previously in­creased its initial projection by 58% following better than forecast performance. Similarly, Chadormalu Mining & Industrial Co. has also already realized 85% of its projected net profit for the year by earning IRR 5,234 billion (approx. USD 133 million). Chadormalu had also previously raised its net profit outlook by 84% for the current financial year. Higher iron ore prices and a strengthening US dollar against the Iranian rial have boosted perfor­mances and projections of metallic ore companies. This week Bafgh Mining Co. (BAFG +17.1%) raised its projected net profit for the current financial year by 92% to IRR 256 billion (approx. USD 6.5 million). It is the second time that Bafgh has raised its profit out­look, with its latest projection being five times more than the initial forecast.

 

In contrast with gains for Metallic Ore, Machinery & Electric Equipment (-4.7%) was the biggest faller of the week with losses seen across the sector. Iran Transfo Corp. (TRNS -5.4%) and Alborz Cable Co. (KALZ -11.7%) both released disappointing updates. Iran Transfo, with the largest market capitalization in the sector, released its unaudited half-year report for the financial year ending March 20 showing a 36% increase in net profit to IRR 245 billion (approx. USD 6.2 million) compared with the first half of last year. This rep­resents just 22% of the transformer producer’s initial projection for the whole year. Mean­while the disclosed cash flow reflects Iran Transfo’s substantial difficulties in obtaining cash payments for sold products. Alborz Cable was one of the main companies dragging the sector down and also one of the biggest fallers on the TSE. On Wednesday it issued its initial projection for the financial year ending September 22, 2017, forecasting a plunge of 85% in net income to IRR 4 billion (approx. USD 0.1 million) compared with last year.

 

The TSE30 index of the thirty largest companies by market capitalization fell slightly less than the overall market, losing 0.3% to close at 3,218. Chadormalu Mining & Industrial Co. was the top gainer while Iran Transfo Corp. saw the steepest drop.

 

This week the Average Daily Trade Volume (ADTV) fell 43% to USD 37 million, recording one of the weakest weekly performances in the current Iranian calendar year ending March 20. The stocks with the highest traded value over the week were led by Azarab In­dustries Co. (AZAB -2.8%), SAIPA Group (SIPA -1.4%) and SAIPA Investment Co. (SSAP -5.3%), with USD 9.3 million, USD 6.4 Million and USD 5.1 million of trades respectively.

 

Iran Fara Bourse

Investors also endured further falls on the Iran Fara Bourse (IFB) market, for the third con­secutive week. The IFB overall index closed at 830, down 1.7% over the week. The IFB’s ADTV reached USD 41 million, down 4%. Debt securities remained the most popular in­strument on the bourse but their total traded value fell 28% from the previous week to USD 101 million. 

 

Foreign Exchange Market

The Central Bank of Iran reduced the official rate of the US dollar slightly to IRR 32,368, down 0.01% from last week. On the free market, USDIRR rose 0.6% to 39,295. The offi­cial euro rate was quoted at 34,348 by CBI, up 0.9%. Similarly the EURIRR free market rate increased 1% to 42,678. The CBI’s official rate for British pound sterling was IRR 39,535, down 0.9% from the previous week. However the free market rate of the pound gained 0.8% over the week to IRR 49,000.

 

Review of the Tehran Stock Exchange in 2016

The Tehran Stock Exchange All-Share Index rose almost 29% in 2016, boosted largely by growth in automotive companies. Due to the removal of sanctions following the interna­tional agreement on Iran’s nuclear program, Iranian car manufacturers reestablished co­operation with European companies, including Peugeot, Citroen and Renault. This result­ed in strong growth of nearly 151% for Automotive sector which ended 2016 as the top performing sector on the Tehran Stock Exchange. The second top performing sector of the year was Metallic Products with 114% growth. Chemicals sector was the worst per­former of the year by adding only 3%. On the quarterly basis, Automotive had gained 188% in the first quarter of 2016 alone, a period which saw gains for all major sectors. But in the second quarter Automotive lost 14% to become the weakest sector, while Non-Metallic Ore became the top gainer with a 22% increase. In the third quarter, expectations of an increase in the regulated price of sugar drove companies in the Sugar sector which became the top gainer with a 40% increase, while Metallic Products was the weakest sec­tor with a 14% decrease. The fourth quarter of 2016 saw Metallic Ore rise to the top of the leader board by adding 23% following gains in global commodity prices and a stronger US dollar against the Iranian rial. Transportation & Logistics was the weakest sector in the final quarter, losing 17%.

FX Information

Description

12 January 2017

5 January 2017

% Change

Official USD - IRR

32,368

32,371

(0.01)

Market USD - IRR

39,295

39,057

0.6

Official EUR - IRR

34,348

34,051

0.9

Market EUR - IRR

42,678

42,274

1.0

Official GBP - IRR

39,535

39,908

(0.9)

Market GBP - IRR

49,000

48,600

0.8

Market Information

Index Info

Close

Unit Change

% Change

%  Change from March 20, 2016

TSE Overall Index—TEDPIX

78,622

(368)

(0.5)

(2.0)

TSE30 Index

3,218

(14)

(0.3)

(4.8)

Iran Fara Bourse Overall Index

830

(19)

(1.7)

3.1

Description

This Period

Last Period

Market P/E

7.4

7.4

Trade Statistics

Description

This Period

Last Period

% Change

TSE Average Daily Trade Vol­ume (Million USD) **

37

65

(43)

IFB Average Daily Traded Val­ue (Million USD) **

41

43

(4)

Industry Index Information

Description

Close

% Change

Mining

8,291

4.4

Metallic Ore

14,402

4.1

Cement

701

1.3

Base Metals

33,844

1.2

Textile

1,525

1.0

Telecommunication

846

0.7

Wooden Products

48,213

0.1

Metallic Products

39,730

0.01

Coal Mining

1,265

0.0

Medical & Measurement Products

10,244

0.0

Engineering Services

843

(0.04)

Leather Production & Products

1,638

(0.2)

Banking

698

(0.2)

Ceramics & Tiles

2,018

(0.2)

Non-Metallic Ores

2,136

(0.2)

IT

8,597

(0.4)

TSE All-Share Index

78,622

(0.5)

Pharmaceuticals

9,241

(0.6)

Insurance

5,125

(0.7)

Transportation & Logistics

3,885

(0.8)

Chemicals

4,804

(0.8)

Foods excluding Sugar

3,585

(0.9)

Industrial Conglomerates

7,253

(0.9)

Rubber & Plastics

20,376

(1.2)

Investment

1,754

(1.4)

Oil Drilling & Services

699

(1.5)

Other Financial Services

2,075

(1.7)

Machinery & Equipment

15,451

(1.8)

Construction

682

(2.0)

Utility Service Providers

181

(2.2)

Sugar

5,383

(2.7)

Automotive

16,936

(3.4)

Oil Products

192,013

(3.5)

Agriculture

6,560

(4.0)

Machinery & Electric Equipment

481,769

(4.7)

Paper Products

7,742

(6.0)

Printing & Publishing

116,012

(6.4)

TSE Top 5 Gainers

Company

Close **

(USD Cents)

% Change

PIAZ

Piazar Agro Ind. Co.

14.1

34.8

BAFG

Bafgh Mining Co.

38.3

17.1

SBOJ

Bojnourd Cement Co.

13.4

14.7

NKOL

Nirouchlor Co.

7.3

12.9

ARDK

Ardekan Ceramic Co.

8.9

12.5

TSE Top 5 Losers

Company

Close **

(USD Cents)

% Change

SPDZ

SAIPA Diesel Co.

1.9

(26.9)

INDM

Indamin Saipa Co.

2.3

(12.3)

KALZ

Alborz Cable Co.

7.3

(11.7)

KLBR

Kalber Dairy Co.

5.0

(11.4)

LPAK

Pak Dairy Co.

4.6

(11.1)

TSE Top 5 Value Leaders

Company

Close **
(USD Cents)

Trade Value **

(Million USD)

AZAB

Azarab Industries Co.

9.4

9.3

SIPA

SAIPA Group

2.8

6.4

SSAP

SAIPA Investment Co.

2.5

5.1

IKCO

Iran Khodro

6.5

4.7

MSMI

National Iranian Copper Ind. Co.

4.8

2.7

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

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