Chodan Went Public
* Today, 80,000,000 shares, equal to 10%, of Chodansazan Industrial Company were offered, as the 512th listed company on the Tehran Stock Exchange, via the book building method to investors for the first time with its price ranging from IRR 1,773 to IRR 1,950; each investor was allowed to order up to 2000 shares. With IRR 800 bn in capital, the company has earned IRR 614 bn over 2016/17 out of sales resulting in IRR 173 bn net profit; it has also estimated to make IRR 784 bn out of sales and IRR 201 bn net profit in the current year, 18% of the former and 15% of the latter has been realized in the first quarter of the current year. The company has been listed in “Metal Products” sector.
* Following the Central Bank of Iran directive on lowering short term and long term interest rates on banking deposits to 10% and 15% respectively, there have been talks on the changes it might have on fixed income mutual funds’ return rate; the funds’ permission to deposit up to 50% of their assets in bank accounts also added fuel to the fire of such talks. In this regard, a former official in the Securities and Exchange Organization of Iran has stated that being regulated by the SEO, the funds’ return ratio is not defined by the CBI since prices in the capital market are set based on the supply/demand mechanism; besides, allocating a part of their assets to purchase stocks, it is natural for such funds to offer rates which are 2-3% higher than that of bank deposits. Referring to the direct correlation between interest rate on deposits and debt bonds yield, since fixed income funds’ portfolio contain long term bonds with high yield rate, experts believe that this directive will not drag funds’ return down so soon; with such bonds having become matured, we should expect a decline in funds’ return as well. Also of note, we should bear in mind that currently, only 20% of these funds’ portfolio are deposited in non-bank accounts, which is not considerable.
In the Market
Finally, after posting gains for more than a month since its IPO, Mobin One Kish in the IT & Communication space started trading in a balanced manner; shareholders enjoyed a 200% return. The share started with a buy queue today but could not hold its session high to the closing bell and finished 3.9% higher.
Demand has significantly increased among tickers in the Automotive industry such that the whole space, but Iran Tractor Forging, ended above their flat lines. Spare parts mfg. companies were the top gainers; Indamin Shock Absorber faced a buy queue right from the start.
Crude oil came back into focus once again which is mostly due to atmospheric conditions in the US; Oil Products space tickers were traded in a balanced manner.
As was said yesterday, commodity mostly metals, prices retraced a part of their losses and no major selling was seen in the sector. Except from Yazd Alloy Steel and Zangan Zinc Industry as the top laggards, other names in the Metals group went through balanced trades, led by Esfahan Steel. 10 mn shares of Esfahan’s Mobarake Steel and 5 mn shares of National Iranian Coper Industries were also block traded in the retail market. A rather more positive sentiment was seen in the Iron Ore space with Damavand Mineral as the top gainer (+1.6%).
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