Iran’s Capital Market to Issue
Foreign Exchange Bonds
* Following news on the issuance of foreign exchange bonds in regards with the permission granted to the Ministry of Oil & Gas in the annual budget law for the current year, the Head of Securities and Exchange Organization (SEO) of Iran announced that foreign exchange bonds are planned to be issued in foreign countries, having received the required licenses. Considering the commitment such bonds create for the country, the Central Bank of Iran, as the sole authority in charge of the foreign exchange market in Iran, must pave grounds. Mr. Mohamadi also referred to the understanding and agreement between the SEO and CBI on the SEO’s readiness to issue such bonds in the country to be sold in rial. The first round will contain $2bn worth of bonds to be issued in foreign exchange and sold in rial.
* Following attempts to comply with international standards in the banking sector and having been ordered to put an end to their non-banking operations, mostly investments in real estate, Bank Sepah has managed to sell 20 properties in an auction at around IRR 200 bn; this has been the 12th round of auctions planned to sell banks’ excess assets. The next auction will focus on selling assets of Bank Refah and then Bank Melli.
* Deputy Head for International Affairs at Securities and Exchange Organization (SEO) of Iran announced the 50% share played by German investors in foreign portfolio investment in Iran’s capital market, which follows by Switzerland.
* Acting as Iran’s largest trading partner in 2010 with trades hovering around $ 7bn, Italy-Iran trades have not yet bounced back to the pre-sanctions levels, which triggered series of negotiations between Iranian and Italian authorities; in this regard the head of Iran-Italy Chamber of Commerce promised the resolving of obstacles within two months in a meeting with an Iranian delegation in Rome attending the joint Business Forum on Banking, Insurance and Legal issues. In this regard, the head of Bank Sepah branch in Italy announced their readiness to offer all kinds of financial services, having received its operation license from the Italian Monetary Authority.
In the Market
In line with global commodity prices fall, the majority of names in the Metals industry shed their prices, settling mostly with slim losses. Esfahan Steel (0.9%) has been heard to implement the second phase of its capital raise plan soon; the rumor also has it that a foreign company has expressed readiness to invest in it. South Kaveh Steel (-0.73%) has been heard to positively adjust its Q3 financial reports. A delegation of Swiss and German investors has attended Khuzestan Steel (0.1%). Besides, referring the 340,000 tons of domestic production per year, an official announced that Iran is planning to become a net exporter of aluminum since 2019, having implemented plans to add 350,000 tons of new production capacity.
A rather negative sentiment dominated the Automotive space, although Motorsazan Iran Tractor finished with a buy queue. Iran Khodro seems to start producing its second new product of Peugeot 301 within the next week. There are talks about Iran Khodro Investment Development (1.19%) capital raise from its retained earnings. In addition, an official in IMIDRO announced the finance agreement to be signed with Germany soon.
Releasing its consolidated financial reports, Iran Tractor (4.28%), listed on the Machinery sector, has registered a 100% growth in its operating income compared to the past 6 months. Absal (3.19%) and Iran Pomp Mfg. (2.37%) were the other top gainers.
Having gone through heavy sales pressure since its reopening, Arak Machinery Mfg. Company (4.08%), listed on the Metals Products space, hit its high.
Bank Khavar Miane (Bank Middle East) (4.18%) in the Banking group returned to the market after its extraordinary GM and approving its capital raise (20% from retained earnings and 40% to be decided by the Board) at IRR 1,850, 4.5% higher.
The whole Iron Ore sector, but one, ended beneath their flat lines following the global commodity prices entering a correction phase. Iran Manganese Mines (14.31%) ticker was reopened at IRR 4,901, growing by 10%, having applied a 151% positive adjustment.
Names in the Oil Products industry were traded in a balanced manner with Pasargad Oil as the top gainer going up more than 3%.
Despite the dominating negative momentum in the market, symbols in the Construction sector saw demand growth, led by Pardis Housing Investment, Abadgaran-e Iran Tourism & Welfare. Alvand Housing Investment also ended with a buy queue. Tous Gostar Urban Development ticker also came back to the market after holding its extraordinary GM and approving its 33% capital raise based on investors’ paid-in capital and claims due, 6.4% higher at IRR 2,100.
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