Banking Reform; a prerequisite to revive Iran’s Economy !
– Despite their promise to finalize the banking reform plan , as a pre-requisite to bring prosperity back to Iran’s Economy, before the end of the current year, an official in the Majlis announced there is low chance for finalizing this draft by the end of the acting government tenure. Although the general outlines of this bill were approved in early fall, the specifics are under investigations, which will take time more than what was estimated. Defining the duties and obligations of banks and credit institutions, this banking reform determines criteria for the establishment of branches and selection of new chief executives and board members, as well as setting limits to their investments and setting up auditing and internal risk committees; all in all, the bill will provide the CBI with more authority in its regulatory and supervisory roles.
– The Minister of Communication and Information Technology announced the establishment of correspondent relationship between Iran and 900 countries around the world in the post-sanctions era. Insisting on banks not to involve too much in irrelevant business activities, he added that new liquidity will be injected into banks in order to improve their stability.
– Based on the latest statistics, trade between Iran and the EU has posted a 66% increase, compared with the previous year, to stand at 10.3 bn euro within the first 10 month of 2016; this happened following the cooperation road-map defined between these two parties in April 2016. To be more specific, Iran export to the EU hit 9 bn euro while the EU export to Iran reached 6.4 bn euro during this period.
In the Market
Of the factors playing in the capital market, the credit crunch has dragged share prices down and intensified with the ambiguities over the future after Mr. Trump takes office, which will cause fluctuations in international markets, and then, Iran’s market, have left shareholders in a pause position.
In line with commodity price hike, the majority of tickers in the Metals industry finished in the green and some like Zarin mines Asia and Iran Mineral Processing closed with buy queues. In its Q3 report, Esfahan’s Mobarake Steel (+0.65%) has positively adjusted its EPS by 19%, covering 85% of its budget; this company is expected to raise its adjustment by more than 25% until the end of the year. Hormozgan-e Jonoub Steel (+4.4%) also experienced profitable export over the last month such that experts estimate that the company will be able to make profit in its Q3 reports.
Following the decline in coal and gas prices, methanol prices are expected to fall, which dragged the majority of names in the Chemicals group down. Tuka Steel Sepahan and Iran Mineral closed with sell queues and Zagros Petrochemical (-0.97%) and Pardis Petrochemical (-1.68%) finished beneath their flat lines. Jam Petrochemical (+1.21%) however, ended in the green.
Despite the previous session where tickers in the Food and Beverage sector attracted investors’ attention due to the rise in their prices, they went through rather negative trades today. A few such as Salemin (+0.1%), Shahdab-e Nab-e Khorasan (+5%) and Mahram (+4.98%) finished in the green; in addition, Piazer Agro-industries ticker was also reopened in the +19% zone to stand at IRR 4,925.
Tickers in the Automotive space mainly finished in the red and some facing sell queues. Iran Automobile Spare Part (+4.16%), however, finished with a buy queue. Saipa Diesel ticker was reopened today, 18% down; the company has realized IRR 544 loss per share in its H1 period and estimated to make IRR 747 loss per share until the end of the year.
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