Islamic Finance to revive Iran Capital Market!
Market News
- Hosting senior manager of Iran Capital Market, Banks’ CEOs and practitioners in the Islamic finance, the second Islamic Finance conference was held the other day. Among the most important topics discussed were financing through the capital market up to IRR 1,000,000 bn until the end of the year, attempts to implement independent option trades, launching venture funds, obliging companies to follow IFRS measures to bring transparency to the whole economy, formulating 5 to 10 year plans along with attempts to help export companies grow through the IME can be named.
- In his live talks to the nation the other night, referring to the signs of economic growth seen in the country, President Rouhani stressed that more attempts and hard work is needed to attract investment in the country aimed mainly at modernizing oil industry facilities. Being asked on the government role in intentionally devaluating the national currency, he seriously denied it and said that the recent devaluation was temporary and due to the holiday seasons and the government is still determined to maintain this value along with controlling the inflation rate.
- Referring to the probable rise of inflation within the next few months, experts believe that Iran economy is not ready yet to have inflation rate lower than a certain point. Reporting that the downward trend for this rate seems to be stopped at 8.6%, they agree with the statements by the minister of economy and financial affairs on the government unwillingness to pull down this rate further because they believe that it might have negative consequences for the country.
Corporate Earnings
Holding IRR 13,800,000 mn in capital, Bandar Abbas Oil Refining released its audited financial report for the H1 ended 21 September 2016. Estimating to make IRR 245 EPS for this FY, the company has covered 59%, equal to IRR 144.
In the Market
In the past months, several incentives have contributed to the upward movement of the overall index, pushing it towards the 81,000-point level. After quite a time, commodity centered sectors went through price hikes in line with global price growth; then, the increase in the methanol and urea prices exerted their positive impact on other sectors, including the chemicals. The other factor playing a role in this regard was the rise in US dollar price, which was beneficial for companies active in export area. However, the government interference in the Forex market has pushed these companies into the correction phase. President Rouhani speech the other night and his promise on the 6.6% economic growth resulted in a more balanced market.
Among names in the Automotive space, a few spare part mfg. company went through positive trades such that Iran Tractor Motorsazan faced a buy queues. The news on the reopening of Saipa at first pushed names like Iran Khodro (-0.55%) and Pars Khodro (-0.34%) in to the green; however, the way it was reopened, changed everything. Today, Saipa Group ticker was finally reopened after 70 days; despite the positive news about the company and its subsidiaries, it was opened in the (-14.5%) zone, dragging the overall index by 185 points; however, it will be halted tomorrow to hold its extraordinary general meeting.
Despite some tickers finishing with sell queues, a few tickers in the Cement space went through positive trades such as Soufian Cement (+0.93%) and Kurdistan Cement (+0.19%). Experts have the idea that their correction phase is about to end. In this regard, an official stated that the cement is to be traded in the IME very soon. Besides, due to the decline in demands for cement in winter, officials seem to be ready to increase its price soon.
Symbols in the Metals space were positively traded such that Asia Zarin Ma’dan, Khorasan Steel, Kimia-ye Zanjan Gostaran finished with buy queues. Going through correction phases, experts assume that Esfahan’s Mobarake Steel and National Iranian Copper Industries (Fameli) are ready to start strong trades. Besides, 17 mn shares of Fameli, 232 mn shares of Middle East Mining Industries and 6mn shares of Yazd Alloy Steel Industries were block traded in the retail market.
The majority of tickers in the Chemicals industry finished beneath their flat lines mainly after the US dollar price fall, halting of gas import from Turkmenistan, and removing discounts on feedstock prices. However, Pars International Products and La’abiran finished in the +4% zone.
Going through rather balanced trades early in the session, some names in the Oil Products space like Esfahan Oil Refining (+2.63%) and Lavan Oil Refining (+1.09%) after the audited financial report for Bandar Abbas Oil Refining was released. Other tickers like Shiraz Oil Refining and Tabriz Oil Refining are also expected to publish fine reports.
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