Playing a Role in Central Bank of
Iran Policy Making
* Reviewing the proposed reform bill by the parliament members regarding the Central Bank of Iran’s laws and structure, officials in Iran’s private sector are trying to maintain their say in decision making and devising policies in the country’s financial sector by proposing ways to reduce the government influence over the CBI and policies as well as improving the CBI independence and autonomy. Referring to the suggested High Council which is to replace the current Money & Credit Council, they are pointing fingers to its non-executive members as a way to keep government interferences at a low level; in this regard, they have suggested for the three macro-economist experts to be nominated by the non-government entity of Iran Association of Economist as well as the legal expert to be recommended by the Iranian Bar Association.
* Stressing on the necessity of Banks’ supporting start-ups and knowledge-based projects/schemes, the Minister of Economic Affairs and Finance mentioned the need for liquidity, modernization, renovation and taking the most out of export opportunities. Attending the GM of Bank San’at va Ma’dan, Mr. Karbasian stated that this bank along with the Export Guarantee Fund, Bank Tose’e Saderat and the Industrial Management Organization must cooperate to bolster small to medium sized companies, driving higher economic growth in the country.
* The agreement made between OPEC and non-OPEC nations on extending oil production cut has pushed oil prices towards more than $60 per barrel, adding to the revenue petrochemical and polymer products export by $2.1 bn over the first 7 months of the current year to reach $2.130 bn.
In the Market
The equity market finished the week with a rather uneventful performance that left the major indices ended rather unchanged, although a solid performance from mega-cap names like Esfahan’s Mobarake Steel and National Iranian Copper Industries pushed the TEDPIX into the green zone.
Nearly the whole Automotive group settled with moderate losses, except from a few active in spare part mfg. area like Charkheshgar, Electric Khodro Sharq and Motorsazan Iran Tractor gaining more than 3%. Following yesterday’s news quoting head of IDRO on the merging of spare part mfg. companies, these companies assume that such mergers will only end in stricter monopoly killing any chance for competition. There are also talks on the possibility of a merger between Iran Khodro and Saipa; while the Ministry of Industry, Mine and Agriculture encourages the private sector to invest in the Automotive industry, such mergers, experts assume, will result in a giant company leaving other parties incapable of competing with it.
Iran Khodro (-1.24%) has increased the prices of 12 of its products since early this month. As one of Iran Khodro’s subsidiaries, Iran Khodro Investment Development (-2.75%) is also planning to divest its 30% share of Nirou Gostaran-e Khorasan Industries Company.
Despite the grounds for higher oil prices, mostly as the result of rising uncertainty and tensions in the Middle East, which were assumed to underpin a positive performance in the Oil Products sector, the majority of tickers settled with slim losses, while Pasargad Oil and Lavan Oil Refining eked out with a small victory. Esfahan Oil Refining (-0.81%) weighted on the sector throughout the session.
Following the high tariff Iraq had applied on importing dairy products from Iran and promises by the country’s officials to negotiate over this problem, an official in the Dairy industry announced the failure of negotiations. However, he referred to the statistics showing a 40% growth in exporting dairy products in the 7 months of the current year to stand at $500 mn. At the end of today’s session, a positive sentiment dominated the Food & Beverages sector, led by Kesht va San’at-e Shahdab-e Nab-e Khorasan (4.17%). Pegah-e Khorasan Milk (4.14%), Behpak Industrial (3.14%) and Pegah-e Fars Milk (3.86%) were among those positively affected.
While Iraq acted as one of the major export destinations of Iranian cement in the past that was then followed by applying 100% import tariff, which were also accompanied by attempts to ease conditions by the Iranian side, the obstacles are still in place. As was said before, however, hopes over the upcoming construction of the west of Iran, suffering from earthquake, have dragged nearly the whole Cement group into the green, led by Fars & Khuzestan Cement (4.89%). Soufian Cement, Ilam Cement, Darab Cement and Kurdestan Cement were the other names hitting their highs.
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