Iranian parliament conditioned the support of a new FX regime for Iran Economy!
- The separation of primary (essential goods and pharma) and secondary (all other currency needs) FX markets;
- Determination of petrochemical, metal and refineries products FX translation rate at the secondary market based on free market mechanism;
- Currency exchange house shall be the focus of the nation’s FX transactions;
- The supply of administration’s surplus FX from the primary market into secondary market;
- The secondary FX market shall be managed by CBI only based on open market operations;
- FX depositing services shall be offered to public guaranteed by CBI;
- A fully functional money supply management by the administration;
- Practical utilization of monetary treaties;
- Codification of essential rules of law for cryptocurrencies;
- Providing the CBI’s suggestions for amending banks’ balance sheets in order to stop the growth of the money supply;
- Organizing the ownership structure of banks and credit institutes;
- Accelerating the assets assignment of unauthorized institutions;
– The latest speculation on administration’s new FX package suggests a rate of 80,000 to 85,000 for USD/IRR on the secondary market which non-oil exporters can translate their FX revenues at, a subsidized rate of 42,000 only for imports of essential goods and pharmaceuticals and a halved, in volume, travel currency at official rate of 42,000. It is expected for this new FX package to be introduced late this week. Stats show that from the total EUR 94 mn offered at the secondary market, there was demand only for EUR 9.5 mn which caused mostly by the official rate FX dedications on NIMA platform.
– In a research carried out by Donya-e-Eqtesad, it was analyzed that Iranian banks on average are now paying interest to deposits 2% more than the approved rate of 15%. The major part of this deviation definitely caused by credit institute and second-tier private banks who have a taste to gather more resources by offering higher than usual risk-free interest rates. The below chart shows the details:
In the Market
Despite an early morning selloff, stocks added to their gains today as investors took the anticipated new FX package in stride. The TEDPIX advanced 0.32% while Chemical-heavy IFEX couldn’t hold to its gains and ticked down -0.66%. In short, the weight of unknowns raised during the session as speculation over political and economic future raised.
The top-weighted Chemical (+1.60%) sector held the market back in early action but eventually and thanks to reopenings of big names picked up the pace, closing higher extending its gains for the 4th consecutive session. Pars Petrochemical (PARS, +4.25%) returned to market +8.0 after a short halting period due to more than 20%. Its mother holding, Persian Gulf Petrochemical (PKLJ, +1.02%) led the market early session yet failed to be the first ticker with the most influence on the index and only placed 96.80 green points. Jam Petrochemical (PJMZ, +3.70%) along with Parsian Oil & Gas (PASN, +4.17%) performed better than expected and drove the index higher by 145.15 and 126.58 points respectively.
Elsewhere, the lucky Oil Products (+1.72%) despite the fact that a free market FX rate would not have any major impacts on their revenues continued its bullish trend again today. The rise of vehicle petroleum production over the summer along with higher crude price influenced the sector and made a good monthly performance for the sector components. Tehran Oil Refinery (PTEH, +4.10%) got back to the trading board +9.0% higher yet the sale pressure added up as the session went through. Other names of the industry experienced a modest trend until the closing bell.
On the flip side, the poor Auto (-3.06%) sector tumbled today as the first sign of US sanctions snapback. The heavy sale pressure along with disappointing news from the industry made almost all of the tickers to end the day in the deep red. Iran Khodro (IKCO, -4.11%) changed hand for almost 10 mn shares and closed with orders left in the sell queue. Sipa Co. (SIPA, -4.05%) did worse and each of its shares price reached only IRR 782! The statement of Renault and other international participants on their leave after US deadline hit the sector really hard, made their miserable condition direr.
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.
To contact reporters: Inter@agah.com