Iran’s Banking Relations on Amend
* After months-long talks and discussions, the Central Bank of Croatia has expressed serious hopes and interest in cooperation and deepening its ties with Iran in the field of payment systems. In a meeting held on August 30th between the two heads, Mr. Seif also elaborated that such collaborations can be in the form of making joint investments and opening branches along with representative offices in both countries. In this regard, an Iranian delegation, made up of representatives from the Chamber of Commerce and Industry, Mine, Agriculture and Trade Ministry is set to visit Croatia over the next month to expand bilateral trade relations. Iranian banks’ following up compliance with international standards has been repeatedly mentioned as the pre-requisite for this to happen. In lines with many attempts to establish banking correspondence between Iranian bank and their foreign counterparts, the Iranian Ambassador to France is also working to enhance the cooperation between major French banks with Iranian ones.
* In its latest forecast, the CBI has predicted Iran to experience a 5% economic growth for the current Iranian year ending 20 March 2018. Referring to the major role oil revenues played in the previous year growth, i.e. 12.5%, the current year seems to enjoy growth rather equally in most sectors. It is worth mentioning that the World Bank had also predicted Iran going through a 4.1% growth in the said year.
* Referring to the implementation of the next phase of issuing mortgage-backed securities by Bank Maskan, the CEO announced that the current 9 investment banks in the country have managed to provide finance worth IRR 21,000 bn so far which is nearly equal to a bank’s capital; this calls for improving such companies’ capital adequacy ratio in order to play a more significant role in the capital market. Mr. Botshekan also criticized the non-formation of credit rating agencies in the country, which is a necessity when issuing such securities, which all in all can guarantee the market independence.
In the Market
The actual implementation of lowering interest rate on deposits as of today was estimated to exert positive effects on the capital market. This directive has raised questions on the rate offered by Fixed-Income investment funds. In this regard, an official stated that it is the interest rate on deposits, put both by individual persons and Fixed-Income funds, that will be 15% and this directive does not set any ceiling/floor for investment funds to offer to their unit holders because they have Islamic Treasury Bills in their portfolios, whose return rate exceeds that of banks’. Contrary to expectations, the market still seems to suffer from ambiguities, long halting periods and the sales pressure usually seen in Shahrivar due to investors’ settling credits with brokerage companies.
The majority of companies listed on Construction and Cement spaces went through balanced trades, not registering specific records, although Kerman Province Civil & Development Investment (19.01%) ticker in the former was reopened at IRR 20,514, 20% higher.
The majority of tickers in the Chemicals group went through rather positive trades, including Persian Gulf Petrochemical Industries (+2.9%), Saina Hygienic Industries (+3.3%) and Zagros Petrochemical (+2.2%). The symbols shedding the most were Polyacryl and Fars Chemical Industries losing nearly 4%. Having benefited its shareholders with 25% in the past week, Tuka Paint Foolad Sepahan lost nearly 5% in its final trade and ended in the -1.79% zone.
The Automotive industry also settled with slim gains, with the majority of companies in the spare part mfg. area ending above their flat lines. Irka Part San’at, Iran Lent and Iran Tractor Casting, on the other hand, lost more than 3%.
With uncertainties around the continuing growth of commodities, investors pushed half names in the Metals space below their unchanged marks, although Iran Mineral Processing managed to go up by 4%.
A more positive sentiment was observed in Iron Ore group with Bafq Mines, Iran Zinc Mines Development and Bama climbing up more than 2% while the rest settled with slim losses.
Finally, in the Banking group, Bank Hekmat Iranian ticker returned to the market at IRR 1,001 shedding 11%. Today, the cooperation agreement between Bank Pasargad and Bank Tejarat from Iran and the South Korea’s Exim Bank was signed, aimed at providing long term finance to improve economic growth and employment in Iran.
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