Central Bank of Iran (CBI), had in the past obliged all the banks to set considerations, for loans granted to their clients, on the basis of accrual accounting to realize the penalized amount as revenue. The decision was to help the government to earn more fortune from taxes, exerted on the funds, generated via late payment penalty fees. There was a 6 % penalty on deferred repayments of the interest rate.
The very recent recession and poor economy climate made the indebted parties unable to pay neither the principle nor the interest rate. Aggregation of dishonored penalty fees and their sizeable amount forced CBI to address the lenders to stop the practice of accrual accounting and record the revenues incurred with respect to cash accounting.
With the notified directive put into effect on December 22, 2015, it will significantly hit the banks’ earnings, notably the ones with high NPLs such as Saderat, Tejarat or Mellat, and mutually a decline in their stock price is not far-fetched. On the bright side the banks earning’s quality can improve due to the transparency of the financial statements after all.
- Holding $13.83 mn in capital and predicting to recognize a $0.01 EPS for the FY ending 19 March 2016, Ama Industrial Company has been able to make 44% of this amount over its Q2 periods. It is so while the company had made 46% of its estimations in the same period last year.
- Holding $165.84 mn in capital, Bank Gardeshgari (Tourism) has made a $0.02 loss per share over the Q2 period ending 21 June 2015, while it had covered 23% of its estimations in the same period in the prior year.
In the Market
Despite good and positive political news in the country, the issue of oil price drop and the deepening of economic recession are keeping to exert their negative effects on the market. In today’s trading session, tickers in the Sugar sector became more balanced after the speculative pressures, started in the recent days, reduced; albeit, most tickers still faced buy queues.
Companies active in the Cement sector, already suffering in selling their products, are about to be closed temporarily due to the current air pollution, which can add to their problems; this resulted in tickers in this sector ending in the red.
Unfortunately, investors did not react positively as was expected after announcing the news on the lifting of sanctions; as a result, tickers in the Transportation sector were traded negatively and IRI Shipping Line Company ended with a sell queue.
Finally, in the Chemicals sector, oil price descending trend and negative fluctuations have added to investors’ concerns. Although tickers, including Jam Petrochemical Company and Iran Chemical Industries Company enjoy rather healthy conditions, the oil price fall has made investors more risk-averse, ending in their rather negative trading.
TSE at a Glance
Summary of Trades
TSE Top 10 Stocks
TSE Major Sectors’ Daily Performance
Trading Halts and Reopenings
IFB at a Glance
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