Despite the expectancy of a mild bullish trend for the market and at least an increase in share prices for the listed companies enjoying a proper fundamental status after the nuclear agreement, the significant decline of the overall index and shares’ value shocked market activists. Authorities’ insufficient attention has been expressed as the reason to this bearish trend due to not owning any formulated plan and just talking about the capital market support with no actual walking. To add salt to the wound, we witnessed heavy share supplies by authorities to control investors’ likely emotional behaviors which were also resulted in the decline of trades’ value. Factors such as digesting the positive effects of the nuclear deal on the market, the release of 1Q2015 reports of the companies, the meetings, etc. have been mentioned as the causes of this negative trend while some other experts regarded such reasons only as excuses since such information was not new and most market activists were already aware of the negative profitability of those firms. Under such circumstances, it seems that unless a solution has been found, the market will again suffer the problem of liquidity crisis and by witnessing severe and harsh fluctuations, traders in markets parallel with the stock market will not have any motivation to inject liquidity into that.
While most stakeholders regard the halting of 5 important companies’ tickers unnecessary, the corresponding authority explained the reasons. Esfahan’s Mobarakeh Steel Company, Mellat Bank, Gol- Gohar Iron Ore Company, Refineries and Metals are the important and major tickers being halted since May, when the market was facing the least volume of trades. Regarding the halting of Esfahan’s Mobarake Steel Company, Ali Beik- Zade stated that this company’s EPS has dropped from 700 to 200 IRR and the company is required to explain and clarify the reasons; on Mellat Bank latest status, he stated that the ticker is ready to reopen; however it seems that this requires a proper timing. On Gol -Gohar’s latest status, he mentioned that this company faced a 30% negative adjustment on the one hand while the letter sent by the minister of industry on this company’s financial statements has caused new ambiguities which must be removed. The tickers of mines and metals are the ones being halted for some time; however, since Chadormalu Mining and Industrial Company and Gol- Gohar Iron Ore Company are regarded as the most important assets of this industry, their reopening requires the removal of ambiguities on Iron Ores.
Mapna is one of the companies making headlines these days. After the announcement of a nuclear agreement between Iran and west, the rumor has it that its old rival, Siemens, is planning to return to Iran’s market, when sanctions have been lifted. The question is whether the entrance of foreign companies to this field can result in the termination of Mapna monopoly or not. Mapna, as one of the superior companies in the Middle East, is in possession of high technology knowledge and enjoys specialized and fully trained workforce; but, experts are eager to see whether this company can compete with foreign rivals in terms of quality and suggested prices or not. Albeit, it should be remembered that investors elect companies based on their profitability expectations; as a result, when their future is mingled by ambiguities, investors prefer to take actions more cautiously.
During a meeting between the government and the private sector, Tayebnia stated that after the relief of the imposed sanctions on our country in the near future, the government is planning to use this sector’s collaboration and consultancy more than ever; he continued to say that the government’s plans are designed such to provide the required infrastructures for a great economic growth and the private sector’s investment in fields such as production and export in addition to removing the economy’s structural problems. On a question about the exchange market future after the lifting of sanctions, he mentioned that the fact that the nuclear agreement did not end in any emotional behavior was the sign of the private sector’s economic maturity and the market behavior was quite natural because nothing special has yet happened to expect the market reaction.
The Electricity Meter Manufacturing Company has been recently making headlines due to entering into contract with Syria and holding negotiations with some other countries on electricity meter manufacturing contracts along with its 80% EPS positive adjustment due to the reduction of financial costs and the increase of investment earnings. Experts are wondering whether a country such as Syria can remain committed to its contract under its current politically-dilapidated climate. Preliminary researches have relieved the Iranian party due to bonds between the two governments and the realization that Saderat Development Bank has been introduced as the contracting intermediary.
“Renewing the production line is one of the major next year projects of the company”, said the CEO of Behshahr Industrial Company today. Reconstructing the current production lines will positively affect the production costs directly. Regarding the released data, the volume of products will be remained at 520 to 530 thousand tons while the cost of production can drop significantly. Currently, Behshahr has 35% of eatable oil market in Iran and is one of the leaders in this sector. Not being allowed to increase the rate of sales, the company had to negatively adjust its EPS in FY2014. However, the board members are hopeful to gain maximum profit in FY2015 due to the production lines reformation and the possibility of importing new technologies after the lift of sanctions.
The all-share index slid 299 points or 0.45 percent to stand at 66530 points. The benchmark is still grappling with the 66000 channel in the technical chart. As it was clear from the exchange market, we were witness to a balanced volume in today’s trading. Fortunately, the overall atmosphere of the country is calm and tensionless. We hear less negative remarks from the opposition sides and it appears that the country is preparing itself for the post-sanction era as this was quite evident in the reception of Foreign minister Mr. Fabius despite his country’s solid resistance against Iran in the nuclear talks. In other words, it was a clear message to the world that Iran is fighting for its own benefits and its interests come first in interactions with the outside world.
Federica Mogherini announced at the beginning of 2016 that the European Union must start high level negotiations with Iran in fields such as energy and commerce. She further continued to stress out that the European commission is going to start new economic relations with Iran. She also clarified on this point the European commission must prepare the conditions to resume economic and business relations with Iran as soon as the international sanctions are relieved.
Companies have released their 1Q financial statements which were concerning in some sectors. The recession dominating all sectors seemed more worrying than the last year’s. Most companies’ profit margins were descending and if this recession is going to continue, more severe circumstances can be assumed.
The minister of commerce, industry and mine stated that Iran expects to re-join SWIFT, the international electronic payment network within three months after sanctions’ relief; therefore, as he argues this might help pave the way for foreign companies to participate in privatizing Iran’s economy more easily. Experts believe that since Iran’s economy has been isolated and dependent specifically on the energy sector for a long time, the window of economy should be opened to foreign investors upon the relief of sanctions to smoothen the trade-off between the both parties.