A crack in the deep bottom of Iran Monetary basement!
– A study carried out by Donya-e-Eqtesad, analysing Iran Monetary basement, base on CBI’s stats show that over the month of Tir (Jun-Jul 2018) the liquid part of monetary base, aka the “Money (cash)” part of the nation’s money supply, is experiencing a faster growth pace (raised by 34.70% in one year). On the other hand, the “Near Money” part of the banking sector’s money supply expanded for 18.1% recording a 6% reduction. The money part has always a greater tie with inflation and once the composition experiences a meaningful change, it could make the bed for an out of hand inflation growth. The below chart demonstrates the details:
– The CEO of Iran securities and exchange organization announced that in line with the development of the capital market, two new instruments will be soon on the Tehran Stock Exchange and Iran Fara Bourse. Warrants, Re-insurance and catastrophic securities have been raised with SEO’s Fiq council from which the first one earned the principal consent and the two others are in line next.
– After 50 years, the rules and regulation of Iran Central Bank are subjected to serious and fundamental amendments in an attempt to make the entity more independent and self-organized. The major headline of this change is on creating a powerful supervision establishment to replace the traditional monitoring schemes. Moreover, this amendment will pave the road for the upcoming and absolutely vital reform of the banking rule of law.
In the Market
Stocks boosted out of the gate on today’s session with an unbelievable strength as the day wore on, ending higher for the second day in a row this week. The benchmark TEDPIX finished with a super gain of 4.36%, closed at 155,061.06 and stamped another record high of all time. IFEX jumped meteorically as well to 1,771.25 left 75.28 positive points behind. Trading volume and value also reached to interesting levels of 1.12 bn shares and USD 479.98 mn respectively.
The rumours of a free FX rate for the last standing sector of Chemicals (4.75%) hand in hand with positive adjustment reports from Metals (4.87%) sector components and rising crude prices for the Oil Products (4.57%) industry made a historic day for Tehran Stock Exchange and Iran Fara Bourse. After all, the recent holistic approach adopted by the administration to not control commodities trades caused a true adjustment of prices in line with today’s economic realities.
Despite the fact that today’s session has a hint of over thrill amid rookie participants, analysts believe that the market has the potential to move up another 60-70% from this point on until the end of 1397 (Mar 2019). Technical charts of the overall index along with most of the blue-chip tickers show that they just got out of their year-long bearish bond and could rise a bit more if the country stays in its “status quo”.
However, the slightest change in the officials’ decision making progress or political pressures from outside could change the course of all market including TSE and IFB. Moreover, as it was anticipated before, the unleased money supply growth of the nation could bring a fire to all markets, productive and non-productive, that could need years to die out.
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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