Iran’s Economy on a Reform Path
* Having held its plenary meeting, the FATF announced the expiry of its action plan for Iran at the end of January 2018 and urged Iran to fulfill its commitment and continue its reform path to guarantee the full and accurate implementation along with pointing out the deficiencies remained. It also set the meeting in February 2018 as the date to assess the country’ progress.
* Stressing on the importance of strong banking and insurance ties in a meeting with the President of the Federation of Belgian Chambers of Commerce, the head of Iran Chamber of Commerce, Industries, Mines and Agriculture announced Iranian banks’ interest in opening branches in Belgium, which enjoys a high level of economic strength among the EU member countries. In This regard, the Belgian ambassador to Iran had earlier noted opportunities for cooperation in different areas as well. It is worth reminding that a delegation of the ICCIMA had paid a visit to Belgium and discussed ways to expand bilateral relations a few months ago. Furthermore, as the result of a meeting with the International Trade Minister of Malaysia along with a number of both Iranian and Malaysian lawmakers and representatives, ways to establish correspondent relationships between banks of the two countries were explored.
In the Market
Following the assigning of a new CEO for Bank Mellat, as had previously been promised by the Minister of Economic Affairs and Finance, along with the explanations presented by the bank on its projections, Bank Mellat (3.06%) in the Banking sector rallied and faced a buy queue after quite a long time in the first hour; the bank has covered its estimated EPS in the first half of the current year. In addition, the CEO of Bank Saderat announced the acceleration of getting rid of the bank’s excess and non-profiting (toxic) assets in the second half of the current year; besides, the rumor has it that the bank has managed to collect IRR 10,000 bn worth of its non-current claims.
Despite a rather negative sentiment dominating the Automotive sector, Electric Khodro Sharq and Iran Radiator held their buy queues until the end of the session, which were followed by Iran Khodro Investment Development going up by more than 2%. The Association of spare part mfg. companies have asked the government for a rise in prices; besides, the CEO of VOLVO company announced their planning for increasing investment and activities in Iran Khodro production lines.
Tickers listed on the Cement group were traded in a balanced way. According to an official, Iran cement has found new markets, including Bangladesh and Africa; besides, negotiations are underway to facilitate export to Russia.
Approved by the Board of Ministers, Mapna Group’s (1.92%), listed on the Engineering industry, claims from the Iran Grid Management Company have been cleared with the company’s debt to the National Tax Admission and Privatization Organizations; this dragged the name into the 2.58% zone early in the session.
Following the limitations put on Chinese companies due to environmental pollution, which resulted in higher metals prices, it has now appeared that production has not decreased as much as predicted that directed prices into a correction phase; the Metals space settled with slim gains with Zangan Zinc Industries (+3%) as the top gainer; Foreign Currency-denominated facilities received by Arfa’ Metal and Steel (-2.67%) will be changed into IRR.
Being halted for 6 months, Arak Machinery Mfg. ticker in the Metal Products group returned to the market at IRR 1550, shedding 15%; the company has estimated to make IRR 209 and IRR 42 loss per share for the current and next years.
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