Agah Mutual Fund Fact Sheet (Aug 2016)
By Mahdi Goodarzi & Alireza Hojjatnia
Debt Market to play role in banks restructuring!
Iran central bank has recently gave birth to a plan reforming the banking sector structure. There is no doubt that it will be the most effective of Rohani’s administration rulings. A reform that if adequately being executed, it would lead to a paved path through economic growth and make the bed for an international re-entry.
Banks loaned more than USD3.5bn on the first third!
- CBI stats show a 37.8% increase on loans granted in 2016/17 first four months. Facilities paid as working capital had a 67.8% share from the total figure and grew 42.6% contrary to the same period last year.
Fixed Incomes to inject cash!
- Evidence indicates that fixed income funds can inject up to USD1bn of liquidity to the market. Holding about 96% of total funds (licensed) value, they worth more than USD21bn. Almost Three-fifths (60%) of fixed income funds are permitted to dedicate a part of their investments to equities up to a designated threshold. That leaves 21 funds with net worth of near USD14bn. Taking “10% limit for equities” rule into account, there should be a capital of USD 141mn in the market, yet that is not the case for now. Stats show a figure of 50% less. The giant pile of liquidity, if directed perfectly, can cause a boom in the market.
Four angles on ETFs!
An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. ETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like features.
- Industries to warm up!
Spring stats on 32 chosen industrial products, showing a growth rate of 60% in 19 items while a drop for the rest. It proves that finally there is an end to depression over the sector. Lower oil prices, reduction in government revenues and lack of demand in the market were to blame for the unprecedented downturn of recent years. In case of a reform in structures, lifting of the barriers and non-inflationary exit from recession it would lead to a way out of the current negative status.
- Banks to trade FX on the market!
CBI chair assures nation to have single rate FX by the current year end. A new directive, notified within a week, should allow banks to trade currency on the market. Exporters would be authorized to freely deposit or sell the currencies of trades.
“This shall be a huge leap towards a single rate on FX market.” Said Kamal Seyed Ali, former CBI’s foreign currency deputy. Smoothing currency operations, raising banking network as the main market player and increasing currency inflow are just a couple cases in point.
Surfing on audacity edge!
Changes have been seen in Iran’s economic climate over the past couple of years. Now the nation feels homey with the Start-Ups, Ventures or accelerators. Even IFB published the prospectus and statute on VC funds.
Indeed one of the main challenges the new ideas face with, is to reap the funds they need. Financing may take months to be ready and make entrepreneurs cold feet, eventually end in depression over the whole project. Above the average failure rate in brand new small businesses make it somehow impossible for newcomers to demand funds from financial institutions, needless to say they are unwilling to do so.
The economy’s skeleton key; Filed!
Liquidity shortage is the dilemma made both markets and key players captive in the recent years. Deficit is to amend by the major four economy drivers:
- Government Investment;
- Foreign Investment;
- Money Market, and
- Capital Market
Despite the fact that the first three are in limits for now, it seems the 6% share for capital markets to compensate for all is drastically low. Debt market development shall reduce the pressure on banks and public sector. Not to mention that non-inflationary growth of liquidity leads to higher multiplier.
Mortgaged backed securities to lift up economy
“It sounds innocuous enough, and it is. It’s also an excellent and safe way to make money when the housing market is booming”. This is the sound of MBS’s (Mortgaged Backed Securities), a type of asset-backed security that is secured by a mortgage or collection of mortgages.