News and Views
Western diplomatic sources have announced that the European Union will officially end the economic sanctions against Iran on Sunday. According to a well-informed source, the EU will adopt the legislative framework for lifting all nuclear-related economic and financial sanctions; its implementation, however, will become operational only after the International Atomic Energy Agency certifies that Iran has met its commitments under the July 14th accord with the major powers.
The import of tires from China accompanied by the recession dominating the economy has resulted in the unsatisfactory situation of tire manufacturing companies listed in the market. Recently, some news has been heard on the new limitations imposed on tire import to the country which can exert positive impacts on domestic companies active in this field. As a result, any registration for importing different types of tire will be merely allowed for the official agencies which offer after sales services.
Zahravi Pharmaceutical Company released its Q2 financials for the period ending September 22, 2015. Holding $2.3 mn capital, this company made $41.99 mn out of sales, leading to $16.83 mn gross profit. Subtracting the administrative and general costs plus the operating costs, it ended in $15.23 mn operating profit. Eventually, the subtraction of financial costs and taxes along the addition of non-operating revenues resulted in $7.38 mn net income, recognizing $0.09 EPS.
Fars Chemical Industries Company released its Q2 reports for the period ending September 21, 2015. Possessing $2.32 mn capital, this company earned $9.09 mn sales revenue which led to $0.98 mn operating profit after the subtraction of SGA costs. After the removal of financial costs and taxes plus the addition of non-operating revenues, $0.29 mn net profit was made, leading to $0.003 EPS.
Rumors in the Market
It has been heard that Iran Khodro Company’s ticker might be halted as a result of the anticipated negative adjustment in the Q2 financial reports.
Lavan Oil Company’s positive adjustment might not be materialized.
Gol-e Gohar Iron Ore Company’s right is faced with speculation, excessive growth and price manipulation which might lead to the formation of more sell queues.
It has been heard that Amir Kabir Petrochemical Company has managed to increase its sales and reduce its retained loss to a great extent.
As a result of market recession and the reduction of price and sales ratio, Nirouchlor Company might negatively adjust its EPS.
In the Market
A positive atmosphere has been created in TSE market since last week after the approval of the JCPOA by Majlis and President Rouhani’s addressing the nation. President Rouhani made remarks on the attempts, including banks’ legal reserve ratio reduction, to be conducted in order to inject liquidity to the economy and increase demand, relying on expansionary policies. Such a positive climate was also more boosted by the news announced on the removal of international sanctions from Sunday and the implementation of the agreement from Monday.
Despite issues such as recession and sales problems, difficulties in export, high inventory levels, and production capacity reduction, a bullish trend was seen in the Cement sector; the reason might be the fact that the prices in this sector has dropped by 50% which has made this sector a perfect choice for long-term investments. Besides, the news on the $33,000 construction loan (transferable to buyers) by the Ministry of Roads and Urban Development has also exerted its own positive impact. Most symbols faced buy queues, including Fars Cement Company ending with a 5.7 million buy queue.
Symbols such as Mellat Bank, Pasargad Bank, and Day Bank in the Banking sector were traded in the +4% volatility zone; other symbols except from Middle East Bank were positively traded. In addition to the overall positive atmosphere, the new package of economic policies by the government has been mentioned as the main reason to keep this sector in the green territory, since the government has considered the adoption of a new approach towards the banking sector in order to root out recession and switch from its contractionary policies in the post-sanctions era. One of the most important policies is the banks’ legal reserve ratio reduction by 3% which can inject new liquidity into the society and help banks offer less expensive provisions.
In the Oil Products sector, Bandar Abbas Oil Refining Company became the leader. The reason to this growth has been stated to be the rumor of the 10% discount on gas feed prices, despite the fact that any changes at this level of importance will be merely allowed by the parliament. Experts believe that the price growth in this sector was more due to technical reasons, rather than fundamental ones.
And a positive trend was also observed in the Automotive sector after President’s promises on the legal reserve ratio reduction and injecting new capitals to the market which can increase demand. Besides, the rumor has it that the Q2 financial statements will not be as bad as predicted; consequently, investors have regained hope in this sector’s growth.
At the end of today’s trading session, tickers of Iran E’tebar Investment Company and the Rights of Iran Tractor Mfg. Company were halted in order to approve financial statements and as a result of underwriting period termination, respectively.
TSE at a Glance[caption id="attachment_4869" align="aligncenter" width="762"] TSE at a Glance[/caption]
Summary of Trades[caption id="attachment_4870" align="aligncenter" width="740"] Summary of Trades[/caption]
IFB at a Glance[caption id="attachment_4871" align="aligncenter" width="712"] IFB at a Glance[/caption]
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