The possibility of interest rate changes are increasing. Besides influencing the money demand and supply, any changes in interest rate can act like a double edged sword for banks. Decline in cost of interest will lead to lower cost of money for banks. Moreover, deposit cash withdrawal will be likely to happen if the interest rates are cut by more than 2 percent. If any changes in interest rate associate with the final nuclear agreement, a huge liquidity will flow from banks to other capital market sectors.
Mellat Bank considers higher return for FY2015 compared with the year before. EPS for FY2014 was predicted 450 IRR which has increased to 475 IRR for FY2015. Considering 29 and 14 percent increase in mutually earned income and individually earned income respectively are announced as the main reason for this improvement. The costs also rose by 17 percent. Its noteworthy to mention that due to the Euro depreciation, the loss form currency exchanges has increased compared with last year. However, the bank forecasts its margin operating and exchange incomes unchanged which is believed to be a warily consideration and also, positive adjustments is likely in future.
Pak Vash Henkel CO. released its 4Q2014 report. Based on this report, the company made 1769 IRR return per share for year ending Jan2015. This number shows 63 percent increase compared with the realized profit over the year before. In 12 months period the company’s gross profit , total costs and operating income increased respectively by 69, 92 and 40 percent.
Chahar Mahal Food & Sugar Co. (Ghechar) released its first unaudited forecasted budget for FY2015. The company considered 15 % increase for the purchase rate of sugar beet and 5 % decrease in its volume of purchase. For buying crude sugar 16 % and 36% increase in rate and volume is also considered respectively. The company predicted receiving 50 IRR bn loans in FY2015. The company’s gross profit jumped by 190% compared with last year. The company forecasted 75 IRR EPS for FY2015 which has been (231) IRR loss per share in FY2014.
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There is no specific news in the market. The main risks which are still influencing the market are the high interest rates and the ambiguity over the result of nuclear negotiations. However, is expected by releasing the 4Q2014 reports the market remain stable at current levels.
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