Khark Petrochemical Company announced 2902 IRR EPS for FY2015 (ending March 20, 2016), recognizing 25% of the estimated EPS for the fiscal year. Gross profit margin both for the first quarter of the year and the financial year stood at 58% and 61% respectively. The company improved its production capacity up to just 1 % compared with the prior year, but sales amount and price each fell by 5% and 25% in the same period.
According to market analysts, until its actual implementation, JCPA would exert no net effect on market improvement or recession exit; however, short-term and temporary positive shocks will be experienced in mid-September whether due to the agreement’s approval or its veto by President Obama. As these professionals continue, the mere approval cannot export the market’s way out of the current slowdown and it should be accompanied by the entrance of capital to the country, the implementation of the government’s expansionary policies, Swift sanction removal, and the realization of profit in companies’ balance sheets. They also believe that the market has reached its bottom line and no more slump can be predicted, relying their logic on the economy minister’s promises to support the market. In conclusion, along with other market experts, they also think that the real and tangible effects of the nuclear deal will be felt from 2016 onwards.
“Optimally manufacturing steel is of the most important goal of Khuzestan Steel Company (Fakhooz)” said the company’s development officer. Ahmadian continues: “now that steel consumption, due to economic growth slide, has hit the bottom, investing in this field can be highly economical and profitable”. According to him, this company has manufactured around 4 mn tons of steel which might whether increase or decrease. The lack of market pull, export reduction, excess inventory, power supply limitations and market volatility have all been announced as the causes to such probable fluctuations. This authority concluded that specific plans and standards have been formulated for each and every manufacturing unit, such as raw materials, iron ore, and Ferro-alloys based on their capacities, taking into consideration their energy consumption ratio aiming to witness a drop in the final costs in all sections. After sanction removal and global prices’ improvements, those who have planted their seeds in these cloudy days will harvest the most.
Bargh Mapna Company is a subsidiary of MAPNA Group companies involved in construction and installation of energy production machinery, including boilers, gas and steam turbines, electrical generators, as well as industrial. This company, BMAZ, was highly favored and thus traded in today’s market and about 5 million shares of BMAZ’s equities changed hands in Iran Fara Bourse (IFB).
As TSE officials have announced, the number of foreign investors, both individual and institutional, in Iran’s capital market has exceeded 400. Recently, investors from countries such as Italy, Australia, Belgium, Sweden, and England have completed the required process to receive a trading license which is the first step of investment in Iran’s high potential markets.
Kosar Insurance Company’s stock market launch took place on Iran Fara Bourse secondary market on August 26, 2015 through Agah Brokerage Firm. The share’s price was discovered at 1750 IRR, with more than 5 percent of the company’s stocks being offered, amounting to 70,000,000 equities. This ticker was promoted from Base Market to secondary market of Fara Bourse, an over-the -counter market, and categorized in insurance and pension funds sector, with 1400 IRR bn worth of capital.
Petrochemical Industries Investment Company’s CEO officially announced “capital raise, administrative structure correction, establishing professional and analytical units to specialize processes, and entering new work fields” as the most important aims and goals of the company. Fereidoon Fadaee also added that generating higher profit margin for technical companies such as Technical Inspection and Corrosion Control Company (Techinco) is also another important goal. Besides, he stated that the Petrochemical Industries Investment Company is intended to offer stocks of some of the group’s firms such as Firmco into the market. According to him, Techinco Company looks for more revenue and profit margin; therefore, based on the conducted research on newly-established petrochemical companies, it is investigating the opportunities to export technology to the neighboring countries such as Iraq and Oman.
Hegmatan Cement Company released its 2Qfinancials for the fiscal year ending January 20, 2016. Holding 502,900 IRR mn capital, the company recognized 202 IRR EPS in the first half of the current year, covering 80% of its whole year estimated return (253 IRR). It is so while it had made 873 IRR EPS the year before. According to the statistics, its realized profit and profit margin recorded 63% and 10% falls, respectively compared to the similar period the previous year. Although this company targeted to reach 670 IRR EPS for its 1Q15 and recognized only 59 IRR for that period, it has reduced its whole year EPS to 253 in its latest financials. The reasons for such a 62% negative adjustment have been stated to be:
Global markets have been witnessing unexpected drops in commodity prices. China’s recession and its DGP reduction have contributed to the copper price downturn which has itself affected other correlated metals’ price movements. Zinc price, for instance, fell to below $1800 after 6 years to stand at $1,770. There are also some reliable analyses supporting its bearish trend to reach $1450. Metal ores are also in tumbling conditions specifically due to the recession prevailing China’s steel sector due to its construction reduction; since China imports its metal ores mainly from Australia and Brazil, Iran’s metal ores are experiencing worse conditions and any change in China’s gloomy economy can shake the global price of this material. However, in case of regulating proper laws to stop importing steel and its damping by China, any increase in the country’s production capacity and its local use can be imagined, paving the way for more local employment of metal ores and its export with lower prices. To add salt to the wound, petrochemical products’ prices are also subordinate to the oil price whose oscillations have portrayed a gloomy picture for these materials, too. All in all, such issues can end in the price reduction in mines, metal, and steel companies quoted on the Tehran Stock Exchange, being more than 40.
The capital market continues to feel the impact of the non-stop flow of information, which sometimes proves to be misinformation actually, especially through the numerous news agencies here and, of course, the social media. And as the confusion continues, so does the market’s inability to analyze independently the published data and verify those based on the economic realities. This mentality, clouded by the speculations and fast-moving rumors, is detrimental as market practitioners keep being distracted by facts and figures that make safe and sound judgments seem irrelevant, regarding macroeconomic factors that are underlying market conditions.