Iran Capital Market Monthly Wrap!
Iran Capital Market is experiencing maybe one its most challenging times in its founding history. The trading volume and value have reached their all time lows these days and it now faced with a pile of ambiguities and lots of unknows on its future path. On one hand, the SEO made a decision to make the daily fluctuation limit asymmetric, -2% to +6%. The decision has made daily trades more spent than ever and caused a liquidity disaster for short term traders. Almost all the tickers are now locked in sell queues and one can barely trade on the sell side.
The overall political situation is more in gray now as the JCPoA future is in jeopardy and that has added lots of pressure to all investment markets in Iran. The capital market which rallied mostly based on devaluation of Iranian Rial over the recent years, is now faced with a dilemma that whether this devaluation will continue or some sort of arrangement with the west is going to stop the sinking of IRR.
However, there are a couple of known facts that investors should bear in mind:
- The government budget deficit will be in place for the next fiscal year, ergo the two digit inflation (at least 30%) will be with Iranians for some time;
- The dream of a fresh new nuke deal with the US is far-fetched in the near future;
- The capital market still looks the best among all parallel investment markets (valuation wise);
- The USD/IRR rate would hover around 21-25K as we approach the year end (Iranian year) and for the next year it could reach 25-27K range;
All in all, the capital market is now in a coma and it needs time to revive.
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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