Inflation Indices to Go Up?
Investigating the Consumer Price Index record, 28% of which is made up of the Food and Beverage item, registers an ascending trend in the last quarter of the year ended 20 March 2017. In fact, the research shows that the consumer price inflation rate stood at 2% in Farvardin (March-April 2016) and reached 2.7% in Khordad (May-June 2016), which was not significant. The climbing trend of this inflation rate commenced since summer, reaching from 5.3% in Tir (June-July 2016) to 9.5% in Shahrivar (August-September 2016); it remained in the same range until Day (December 2016-January 2017). However, it jumped to 17.8% in the last two months of the Persian calendar year. This sudden rise dragged the total Consumer Price Index up in Esfand (February-March 2017) by 2%, which was unprecedented in the 11th administration tenure.
The statistics released on the Producer Price Index also prove that this index has reached 235.4 point in Esfand (February-March 2017), which is higher by 0.7% compared to the previous month. Investigating this index demonstrates that it has gone through positive changes during the previous Persian calendar year, the most of which occurred in Esfand. In addition, the point to point growth of this index hit 9.1% during Esfand, which was 8.9% in the month before. Among the 8 groups constituting the PPI, the industry group inflation rate was 0.8% in Esfand; the same rate had been seen during the previous month, too. Considering the inflation rate trend in this group, one also finds out that this is the first time since the release of the Producer Price Index that the industry group inflation rate has been in the green zone during the last 2 months of the year. Taking into account the fact that the industry group inflation rate has been positive since Mordad (July-August 2016), experts assume that the recession phase might be near to its end.
The Producer Price Index and Consumer Price Index are 2 important price gauges, determining prices at the beginning and end of the supply chain, which the former is therefore, interpreted as an indicator predicting the latter. Investigations show that around 40% of items constituting these 2 indices are the same, which will intensify the CPI following the PPI; this has been verified in the recent surveys. In fact, the point to point consumer price inflation rate went up by 1.3 points in Esfand to stand at 11.9%, in comparison with its previous month and a similar trend was seen for the producer price inflation rate over the same period; a trend which is hugely attributable to the rise in demands at the end of the Persian calendar year. Although taken as an unpleasant incident by many, the growth in the Producer Price Index can be a sign of the recession leaving out the economy under the current circumstances of the country.
Holding IRR 4,000,000,000,000 in capital, Bank Hekmat-e Iranian received its permission from the SEO to increase its capital by 50% relying on its investors’ paid-in capital and retained earnings.
In the Market
Since the beginning of trades in the new Persian calendar year, the value and volume of trades have not registered pleasant records mainly due to the approaching of the presidential election in the upcoming month; this has made investors adopt a conservative approach in their trading.
Symbols in the Metals space went through rather balanced trades with Shahid Bahonar Copper closing with a buy queue; it has been heard that its sales volume has hit 4,600 tons, which is 1,500 ton more than what was predicted in its budget for the FY ended 20 March 2017 and the company has experienced a 200% rise in its export.
The majority of companies listed on the Banking group ended beneath their flat lines; with the necessary reforms to be implemented in banks, many shareholders, especially minority ones, seem to lose their interest in keeping banking shares. Answering why comprehensive information has not been submitted to the SEO, an official in Bank Saderat mentioned factors like management changes, the application of the CBI’s obligations and measures to the bank’s financial statements along with the bank’s managers’ insisting on utmost transparency as reasons, which will take more time for things to be prepared. Although the bank is under pressure due to being trapped with frozen assets, the government debt and therefore, the shrinking of the profit margin, the bank’s authorities are focused on reducing loss, which will take place mostly from revenues made from 22 foreign branches.
A great number of tickers in the Non-Metallic Ores hit their highs and closed with buy queues, led by Razi Glass Corporation.
All symbols, but Rail Pardaz-e Seir (-1.54%) in the Transportation industry closed in the green and went through positive trades.
Despite positive movements in the previous and early in today’s sessions, names in the Construction group experienced sales pressure. Shomal-e Sharq Housing Investment faced a buy queue for the second day.
Among symbols in the Chemicals space, Polyacryl, which has enjoyed consecutive buy queues early after its reopening, witnessed a low-volume buy queue; this might be interpreted as the end of its ascending trend. The rumor has it that Jam Petrochemical (-0.08%) has developed and increased the capacity of its production units as well as launching FNCT equipment with German experts’ assistance.
DISCLAIMER: This report has been prepared and issued by Agah Brokerage Firm on the basis of publicly available information, internally developed data and other sources believed to be reliable. The information contained herein is not guaranteed, does not purport to be comprehensive and is strictly for information purposes only. Agah does not assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions. Any expressions of opinions are subject to change without notice.
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