“Renewing the production line is one of the major next year projects of the company”, said the CEO of Behshahr Industrial Company today. Reconstructing the current production lines will positively affect the production costs directly. Regarding the released data, the volume of products will be remained at 520 to 530 thousand tons while the cost of production can drop significantly. Currently, Behshahr has 35% of eatable oil market in Iran and is one of the leaders in this sector. Not being allowed to increase the rate of sales, the company had to negatively adjust its EPS in FY2014. However, the board members are hopeful to gain maximum profit in FY2015 due to the production lines reformation and the possibility of importing new technologies after the lift of sanctions.
The all-share index slid 299 points or 0.45 percent to stand at 66530 points. The benchmark is still grappling with the 66000 channel in the technical chart. As it was clear from the exchange market, we were witness to a balanced volume in today’s trading. Fortunately, the overall atmosphere of the country is calm and tensionless. We hear less negative remarks from the opposition sides and it appears that the country is preparing itself for the post-sanction era as this was quite evident in the reception of Foreign minister Mr. Fabius despite his country’s solid resistance against Iran in the nuclear talks. In other words, it was a clear message to the world that Iran is fighting for its own benefits and its interests come first in interactions with the outside world.
Federica Mogherini announced at the beginning of 2016 that the European Union must start high level negotiations with Iran in fields such as energy and commerce. She further continued to stress out that the European commission is going to start new economic relations with Iran. She also clarified on this point the European commission must prepare the conditions to resume economic and business relations with Iran as soon as the international sanctions are relieved.
Companies have released their 1Q financial statements which were concerning in some sectors. The recession dominating all sectors seemed more worrying than the last year’s. Most companies’ profit margins were descending and if this recession is going to continue, more severe circumstances can be assumed.
The minister of commerce, industry and mine stated that Iran expects to re-join SWIFT, the international electronic payment network within three months after sanctions’ relief; therefore, as he argues this might help pave the way for foreign companies to participate in privatizing Iran’s economy more easily. Experts believe that since Iran’s economy has been isolated and dependent specifically on the energy sector for a long time, the window of economy should be opened to foreign investors upon the relief of sanctions to smoothen the trade-off between the both parties.
General circumstances and conditions surrounding the capital market is the same as what we mentioned earlier and the market benchmark is an undeniable proof to this claim. The stock prices intend to correct and modify and the only element to help them appreciate in value is fundamental information to be seemingly improved most probably in the next quarterly reports. Currently, the market is demonstrating reactions to AGMs’ reports on the 1Q financial statements and the poor far from expected distributed dividends that were aggravated with extremely low budgetary coverage of most listed companies on TSE. We can refer to a multitude of factors contributing to and corroborating the current dilemma in the Tehran Stock Exchange that has stirred the problems. To start with is the continuous and on-going recession combined with decline in the inventories prices both in domestic and international scale.
“Renault is negotiating to buy less than half of the Pars Khodro Company’s shares”, said one of the Pars Khodro’s directors in Iran- EU economic conference held in Vienna. However, he did not disclose the possible value of this transaction. Pars Khodro is currently assembling various automobile models by Renault parts. It’s worth to mention that Renault has over 562 USD mn in its bank accounts in Iran which could not be withdrawn due to sanction. Peugeot has also announced that is planning to import new products to Iran.
As it was predictable in this industry, estimates for the first quarter for the financial institutions do not appear to be appealing due to unprecedented increase in doubtful receivables in financial statements of the related banks. The leader among the shares in this field is Saderat Bank which has realized 12 percent of its profit forecast in the first quarter of the Iranian fiscal year ending March 20th. This is largely because of SWIFT embargoes on this bank and the immense amount of non-performing loans that are not paid back as a result of poor economic conditions and the high rate of interest which is a record of its kind in the world as the minimum is below 10 percent compared to that of above 20 percent in Iran. Nevertheless, we should say that the future for this sector is promising in the aftermath of the nuclear deal.
Neishabour Sugar Company released its financial statements for its 9-month period ending September 22, 2015. Holding 200 IRR bn capital, this company recognized 115 IRR loss per share; last year, it had recognized 189 IRR EPS with 81 IRR bn. Furthermore, although this company had predicted to suffer 36 IRR loss per share until the end of FY2015, it increased that amount to 148 IRR for the whole current year.
In our latest blog post we provided a review of Iran’s economy and its capital markets. Of course you need more specific information to actually start investing specially as a foreign investor. That is why we have tried to cover the steps you need to take. We at Agah Group get so many questions all the time sent to our mail box. Although you can always feel free to ask us for more information , we have tried to answer many of the questions on how you can invest in this post. Please ask us for more by dropping us an email