Iran’s Banking Sector
Following the Roadmap
*Referring to the problems with which Iranian banks are dealing as impediments ahead building cooperation with their foreign counterparts, President Rouhani, outlining his government performance in the first 100 days, continued to urge Iran’s Banking Sector to follow the roadmap set to allocate resources to boost economic growth while simultaneously managing to keep inflation rate down. Likewise, the Central Bank of Iran has also explained measures taken over this period, which includes strong actions towards closing un-regulated financial institutions, lowering interest rates on bank deposits as well as building cooperation with foreign ones.
*The international credit rating agency, Capital Intelligence Ratings rated Bank Saman “B”, with its outlook upgraded to Stable, having thoroughly investigated its performance. While the bank enjoys a working business model, active retail banking and growing deposit franchise, its weaknesses fall into weak capital adequacy ratio, asset quality and profitability. The bank’s officials are planning to revalue their real estate to improve the pertinent ratios
*As the head of Central Securities Depository of Iran has said, 19 new foreign investors, including 9 institutional and 10 individual foreigners, have received trading codes.
In the Market
Enjoying an 18% growth since the beginning of the year, Tehran Stock Exchange is placed first as the highest yielding investment market in the country with sectors, including Sugar, Paper, Oil Products, Metals and Iron Ore contributing the most to such high return.
Following its 14% decline over the past year, the housing sector has been reported to grow by 6.2% in the first 7 months of the current year. However, this news seems not to have exerted any effect on the Cement space, despite the rather positive trades seen in the Construction industry.
While tickers in the Banking sector settled with slim gains, Bank Middle East managed to close the session hitting its high. In a visit to Yerevan, Bank Mellat CEO announced their readiness to participate in Armenia’s development plans. In its unaudited H1 reports, Bank Eqtesad Novin announced the recognition of IRR 244 loss per share, posting a 49% decline compared to year before; the bank had estimated to make IRR 51 EPS. Besides, with decline in interest rate on bank deposits to 15%, the minister of Economic Affairs and Finance announced the interbank interest rate to hover around 16-17%.
Nearly all symbols in the Other Financial Intermediaries space saw demand rise led by Qadir Khodro Leasing and Iran Leasing Companies.
Just like the recently trend seen in the Automotive group, most companies active in spare part mfg. area ended in the green with some like Iran Tractor Casting, Zar Spring Mfg. and Mashhad Wheel going up more than 4%.
Finally, over the end of the month meeting, OPEC agreed to extend its oil production cut to the end of 2018; in this regard, Iran’s Oil and Gas Minister has announced Iran’s agreement with a 6-9 month oil cut extension. As the result, the majority of names in the Oil Products space finished in the green with Oil Industry Investment (+2.3%) as the top gainer.
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