As the oil prices have edged up to 60 USD levels, the petrochemical trend shares became more attractive for the market players. Since those companies are buying the crude oil 5% percent less than the Persian Guld FOB price, their EPS could be adjusted positively. Selling the products with higher prices and buying cheaper raw material will affect their financial statements in long run.
Two important but untimely events in TSE
First, as it was already announced by the SEO (Securities and Exchange Organization), Stock price fluctuation domain increased. This domain which used to be 4 % saw an increase of 1 % and became 5 % from Saturday 23th. However, this event is not happening at an appropriate time as the current conditions in the stock market aggravate the positive and expected impact of the new decision which was awaited by the investors and artificial entities, active in the market, long ago. This could have led to better and more liquidity, improvement in stock prices of top companies in the market, rise in transactions’ volume and value and most significantly faster balance and equilibrium when one specific stock happened to face abnormal flood of buyers or sellers.Nevertheless what happened was quite contrary to the expectations the authorities bore in their mind. In fact, what went on in the aftermath of this decision was somehow predictable and it is a big question why such measures are being introduced at an inappropriate occasion when there is no genuine support from the government and on top of that the shadow of a final nuclear deal is still on the body of the market. Considering these issues which were not solved yet thus resulted in selling pressures from those who are seeking any opportunity to leave the market.
“The companies in pharmaceutical sector have a great potential for growth and due to their low P/E ratio (near 4), they could bring more return even than the governmental bonds”, the portfolio manager of Etela Alborz Investment Co. said today. He added that although the companies like Alborz, Tolid Darou and Osveh pharmaceutical companies will have a better performance if the sanctions will be removed, they have low risk opportunities with more than expected return. He also mentioned that the KBC Company has signed new contracts for importing medicine to the country. He assessed the KBC financial performance at good levels.
Ministry of Urban Development could finally convince the central bank for raising the mortgage loan from 600 to 800 IRR mn. Although confirmation of this news will be officially announced next week, the housing sector index boosted in yesterday and today’s market. Due to heavyweight downtrend in all sectors in the country, the share of housing companies are traded 70 percent less than their net asset values. However, one might wonder if this decision could increase the demand in this sector. Regarding the high inflation, it should be noted that following the high interest of mortgages the payoffs of obligations might not be affordable by many people. Currently the volumes of trades in real estates are significantly low and so many housing projects are halted. The rate of sale is so close to the costs that no profit margin is left for the construction and housing companies.
Neyshabour Sugar Co. released its 2Q2015 audited report. Although the revenue increased by 20 percent compared with same period in FY2014, the company could not recognize any gain. However, the company earned 112 IRR per share in same period last year. The company’s net profit in 2Q2015 dropped by 100 percent compared with 2Q2014 due to its 20 IRR bn loss reserves.
Most of the sugar companies are facing the raw material shortage and importing crude sugar is not allowed by the government. Due to lack of liquidity the companies are financing their fixed costs with high interest loans and their production lines are stopped. Based on newly released data, Neyshabour Sugar Co. could not recognize any gain in the first half of FY2015. However, the company made 107 EPS for the same period last year. The company forecasted (36) IRR loss per share for FY2015. The company’s gross profit in 2Q2015 decreased from 21 to 5 percent compared with same period a year before. “Not only the Neyshabour Co. is in a critical condition and all the productions are halted, Shahroud Co. is also suffering from the same situation” the CEO of Neyshabour company said. Shahroud Sugar Co. is also recorded (108) IRR loss per share in 2Q2015 while, the company’s EPS in same period last year was 106 IRR. The gross profit in 2Q2014 was 20 percent which reached to 18 percent at the end of FY2014. In the first half of FY2015 the gross profit decreased to (-1) percent and is estimated to reach 1 percent in FY2015.
“There is more demand for new technologies than new investments in oil and gas industry in Iran” Zanganeh, the oil minister of Iran mentioned in a meeting with energy companies in Berlin, Germany. He also added that Iran has a good infrastructure in this sector and support of government. He said that billions of dollars are already invested in south part of Iran for petrochemical projects, while for more extractions newer technologies are needed. He asked the German energy companies for starting corporation with Iranian counterparts.
Mobin trades get back to normal. Mobin Petrochemical Company’s shares were initially offered with a price of 2900 IRR and reached 3391 IRR within 10 days. After a buying pressure for 10 days, the company’s shares were traded near settlement price on negative percentage. It’s noteworthy to mention that 1338 of 2,061 IRR bn value of today’s market trading value belongs to Mobin transactions.
Iran has participated in a pharmaceutical tender for exporting medicine to Iraq, The portfolio manager of Etela Alborz Investment Company announced. The value of this tender is estimated 40 Million USD and with regard to the released prices on Iraq health ministry’s website is a great possibility for Etella Alborz to win a complete or part of the project. Iraq is planning for furnishing its drug stores while Iran has reached international standards in this field.
“We’ve done a pretty good assessment on our side and we think the demand, should things open up, would be very strong,” vice president sales, Middle East, Russia & Central Asia at Boeing, told reporters in Dubai . Since 1970 Iran has been banned from buying aircraft and related parts by sanctions. In 2014, Boeing got a license from US government to sells aircrafts’ spare parts to Iran. However, not a significant amount has been sold to Iran. It is estimated that within 10 years Iran will be in need of replacing at least 400 aircraft with its current fleet.