Iran’s Capital Market Hosting German Investors
* According to the Deputy Head for International Affairs at Securities and Exchange Organization (SEO) of Iran, German investors are in possession of half portfolio investment owned by foreigners in Iran’s capital market. The signing of an MoU with BaFin, as the Germany’s Federal Financial Supervisory Authority in 2016 with the SEO played a crucial role in building Germen investors’ trust in Iranian markets, which is followed by attempts for facilitating inter-bank relations as well as inking a cooperation agreement between the Tehran Stock Exchange (TSE) and Munich Exchange, although in general, many believe that the rise in Germen investment in Iran mostly originates from the purchase of Pakvash Company’s shares by Henkel Company. All in all, more and deeper trade relations between Iran and Germany strengthened by the facilitation of money transfer and hopefully, the upcoming branch opening by Iranian banks in Germany have directed germen investors’ attention towards Iran’s market.
* The Ministry of Road and Urbanization is to receive the permission to issue IRR 15,000 bn worth of Sukuks as a way to finance projects on the renovation of old areas based on some state-owned assets investing the resulted capital in Yekom-e Bank Maskan Fund for 4 years; Bank Maskan will then grant IRR 30,000 bn worth of housing loans for the renovation process.
* Referring to the predictability of foreign exchange rate with regards to the inflation rate, the Chief of the Chamber for Industries, Mines and Agriculture asked the government to provide grounds for the liberalization of the forex rate since keeping it stable seems only resulted in the piling of companies and contractors’ claims as well as bad production conditions. He also reported a 34% rise in housing transactions, after 20 consecutive seasons filled with recession, with prices becoming in line with the inflation rate
In the Market
The market started its activity with demand rise for oil refining companies in the Oil Products space; it appears that the upcoming positive H1 reports is the major driver; the rise in products produced by oil refining companies was also confirmed. Esfahan, Bandar Abbas, and Tabriz Oil Refining companies hit their highs. After ambiguity over the announcement of the supply cut extension plan by the OPEC rose, which lowered demand level, the energy minister of Saudi Arabia has stated that this decision will be made at the meeting held at the end of the month; this held oil prices at high levels; going up by 8 cents, oil price hit $62.20.
The Central Bank of Iran announced the sales of its 13% block of National Investment Company of Iran’s, in the Investment group, shares. Despite the negative momentum in this sector, Sobhan Investment ended with a buy queue.
The Chemicals industry was among a few dominated by a positive sentiment; tickers like Pakshoo Industrial, Nirouchlor and Pars Carbon gained more than 3%.
Following the changes in Saipa, it was announced that the new CEO of Saipa was elected by the company’s board members rejecting any appointment by the Ministry of Industry, Mine and Trade; this change appears not to have affected the share price. Among the whole Automotive group, Motorsazan Iran Tractor experienced significant growth while nearly all the rest shed their prices; the USD/IRR growth is one of the reasons behind such fall.
Being halted since early this month, the CEO of Hi Web Company listed on the IT & Communication sector announced the probable reopening of the ticker in the following week, having held several meetings with SEO officials to discuss the possible changes/adjustment its merger with Pars Online Company will have on its financial reports.
Finally, names in Metals and Iron Ore sectors were also highly demanded with Esfahan’s Mobarake Steel and Arfa’ Steel & Metal leading the former and Gol-e Gohar Mining & Industrial and Bama leading the latter
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