According to the data published by the Tehran Stock Exchange during the 20 business days between Jun 22—July 22 the value of transactions in comparison with that of the previous month demonstrated a noticeable increase of 111 percent and reached $1,165 billion comparing to $553 billion last month. Plus, the volume transacted peaked 109 percent and arrived at 19475 million shares this month from that of 9297.5 the month before. This is while the average daily volume and value of trading was 861 million and $49.18 million respectively.
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.
General circumstances and conditions surrounding the capital market is the same as what we mentioned earlier and the market benchmark is an undeniable proof to this claim. The stock prices intend to correct and modify and the only element to help them appreciate in value is fundamental information to be seemingly improved most probably in the next quarterly reports. Currently, the market is demonstrating reactions to AGMs’ reports on the 1Q financial statements and the poor far from expected distributed dividends that were aggravated with extremely low budgetary coverage of most listed companies on TSE. We can refer to a multitude of factors contributing to and corroborating the current dilemma in the Tehran Stock Exchange that has stirred the problems. To start with is the continuous and on-going recession combined with decline in the inventories prices both in domestic and international scale.
According to TSE data, the benchmark plummeted down 1183 points or 1.72% to stand at 67.644 during trading session ended on July 24. There were some reasons resulting in the index’s standstill and stopping it to go upper touching new ceilings. Some believed that the TSE authorities manipulated the gauge and controlled it not to experience new levels due to their own reasons.
Agah mutual fund is a pioneer fund in the capital market of Iran. Since its inception date, it has made more than 1500% return for its unit holders. This fund enjoys a professional management team and in terms of its combination, Agah fund components are picked up out of different sectors in the capital market.
“Renault is negotiating to buy less than half of the Pars Khodro Company’s shares”, said one of the Pars Khodro’s directors in Iran- EU economic conference held in Vienna. However, he did not disclose the possible value of this transaction. Pars Khodro is currently assembling various automobile models by Renault parts. It’s worth to mention that Renault has over 562 USD mn in its bank accounts in Iran which could not be withdrawn due to sanction. Peugeot has also announced that is planning to import new products to Iran.
As it was predictable in this industry, estimates for the first quarter for the financial institutions do not appear to be appealing due to unprecedented increase in doubtful receivables in financial statements of the related banks. The leader among the shares in this field is Saderat Bank which has realized 12 percent of its profit forecast in the first quarter of the Iranian fiscal year ending March 20th. This is largely because of SWIFT embargoes on this bank and the immense amount of non-performing loans that are not paid back as a result of poor economic conditions and the high rate of interest which is a record of its kind in the world as the minimum is below 10 percent compared to that of above 20 percent in Iran. Nevertheless, we should say that the future for this sector is promising in the aftermath of the nuclear deal.