Signals to Recover from Recession
The Governor of the CBI announced the 7% drop in liquidity growth in 2016/17, compared with 2015/16, to reach from 30.94% to 23.2%; together with lower liquidity growth rate than its long term trend, this provides authorities with more certainty in controlling the inflation rate. Referring to signals like the stability in the foreign exchange market, the inflation rate descending trend continuance and reaching one-digit inflation ratio along with the realization of a 2-digit economic growth in the 9-month period of 2016/17, he brought hope over Iran’s economy prospect in the future. The next item announced was the 31.4% increase in facilities granted within the banking network during this time, to reach from IRR 4173.2 thousand bn in 2015/16 to IRR 5483 thousand bn in 2016/17, irrespective of impediments like credit crunch and structural problems in the banking network.
In its latest report, the World Bank has named Iran as one of the 2 countries in the region which is expected to have high trade balance in 2017 and the only one with financial deficit less than 1% of its GNP. This report has also announced Iran’s economic growth to stay above 4% until 2019, while calling this rate up to 6.4% in 2016/17. Stressing on the importance of foreign direct investment and relinking with the international banking system, Iran’s economic growth has been stated to be moderate due to oil production near full capacity and weak performance of the non-oil sector in the midterm.
Holding IRR 57,800,000 mn in capital, Bank Saderat has predicted to make loss per share equal to IRR 245 for the FY ending 19 March 2018; in its previous report, the bank had estimated to realize IRR 255 loss per share.
In the Market
The TSE ended Farvardin month (21 March- 20 April, 2017) registering a 1.8% growth; expected to take a rather conservative approach in the election-influenced atmosphere, it pictured a completely different image than the same period last year. In the current month, however, a more conservative behavior is expected among shareholders until the election results come out.
Names in the Automotive group started the session strong, most of which like Saipa Diesel, Pars Khodro and spare part mfg. companies faced buy queues. Spreading to the whole sector, this atmosphere left all tickers above their flat lines, led by Saipa. Taking it as the signal of new money injection to the market in general and the automotive industry in particular, technical analysts believe that the descending trend of this group has been ended and a 10-15% return can be expected in the current month.
Symbols in the Banking industry went through rather negative trades with only Post Bank Iran closing in +2.6% zone. Having released its projections for the current year, Bank Saderat ticker is expected to reopen in this week. Today, the government spokesman announced the settlement of a part of the government debt, equal to IRR 132500 bn to the banking sector. Besides, aimed at deepening the market and increase its liquidity and eventually, fair price discovery, buy options are now available in Iran Fara Bourse for by trading Bank Hekmat Iranian stock.
The whole Oil Products group, but Iranol Oil (-0.1%), witnessed demand growth and some like Tehran, Lavan and Esfahan Oil Refineries faced buy queues. Among such names, the 20-30% difference between real products prices and those estimated in their projections has attracted investors’ attention to such tickers.
Most companies listed on the Computer space witnessed positive trades closing with buy queues, including Iran Arqam, Parsian Electronic Commerce and Iran Data Processing. Experts believe that this space is in its infantry and huge profits are hidden inside it, if kept with long term perspective.
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