Piazar Agribusiness Co. (Ghazar) recorded 74 percent increase in return for 9 months period of 2014 compared with same period a year before. With 30 IRR bn capital, The company made 357 IRR return per share in 9 months period of 2014 and covered 76 % of its 2014 forecasted EPS. The EPS for FY2014 had been estimated 467 IRR. The company recognized 401 IRR return per share for FY2013. The company’s profit margin for FY2014 was 37% which increased 8% compared with FY2013. The 150 percent raising capital plan also has been approved.
Seven percent stake of Mobin Petrochemical Co. was offered today by Persian Gulf petrochemical Holding Co. and each share priced at 2900 IRR. Mobin is a utility company the main products of which, including steam, Electricity, Nitrogen and Industrial waters, are sold to Pars, Jam and Ariya Sasool petrochemical companies. It’s noteworthy to mention the 1,107 IRR bn Mobin’s debt to Boushehr Sate Gas Company. The company is providing gas for Zagros & Pardis petrochemical companies which have not settled their debts with Mobin. However, the company denies any effect of this debt on its financial statements. The main risk which is threatening the company is the gas rate. Based on the latest financial reports, the level price of 300 IRR was considered reasonable for Mobin’s share. In only 63 seconds, 570 million shares were purchased and Mobin market cap was recorded more than 4.1 thousand IRR bn. The other 287 million shares were purchased for Mobin and other Persian Gulf subsidiaries.
Following the participation of Electricity Meter Manufacturing Co. (Sherkat Kontorsazi Iran- SKI) in Syria’s three open tender buying which were held by the Syrian Electricity distribution Organization for purchasing the power meter, the company’s products met all the requirements and international standards and approved for purchase. Based on the three contacts were signed, the SKI is required to export 400 thousand single phase electricity meters, 50 thousand direct 3 phase electricity meters, 25 thousand indirect phase electricity meters to Syria in 2015-16. Financing of these contracts will be from the existence credit between Iran & Syria and will be through the Saderat Bank.
The CEO of Persian Gulf Petrochemical Holding Co. (FARS) announced the one billion Euro investments in development projects of the company in 2015-16. Regarding to strategic plans, he also added, the company will reach its 100% capacity in 3 years. By emphasizing on current challenges he hoped the company would reach 80% capacity (20 Million tons production) in 2015. Persian Gulf holding has a nominal capacity of 22 Million tons. Last year, 35% of reduction in production was due to lack of raw materials and feed in all company’s subsidiaries. The company’s subsidiaries have increased from 15 to 60 companies, exporting 8 to 9 billion dollars annually. Having 11 percent of total market cap and diversity of activities in its subsidiaries is a privilege of Fars in Iran’s capital market.
Zangan Zinc Industry Co. reduced its forecasted EPS for FY2014 by 21.5% from 241 to 189 IRR. However, the company predicted 177 IRR for FY2015 and 142IRR cash dividend is suggested by the board member. It’s noteworthy to mention that the company’s realized EPS for FY2013 was 308IRR. The company predicted the sale and cost of sale to increase by 40 and 55 percent respectively compared with FY2014 performance, while the company’s operating income decreased by 16 percent. Although the company’s sale was forecasted to improve by 40% in FY2015, the gross profit decreased from 23 to 14 percent compared with FY2014 which no explanation is given for that.
Negotiations with companies from Germany, Netherland and Italy have commenced for participating in petrochemical projects, the deputy of Iran’s Oil ministry said. He mentioned that after the recent nuclear negotiations and the higher possibility of lifting sanctions, many foreign companies have contacted for mutual partnership in new petrochemical projects. He declared that some of them have even Americans partners. He also added that there is no restriction for US companies to invest in petrochemical industries. These companies have assured to start their partnership with Iran’ petrochemical industries if the sanctions are lifted. Besides having cheap resources of natural oil and gas, Iran has the privilege of having educated and young human resources. Furthermore, having more than 2000 km maritime border in Persian Gulf and Oman Sea is another advantage for polymer and petrochemical industries in Iran.
While closing the oil refinery shares during the last year led to the virulent experience for their shareholders, halting the share trades of Bandar Abbas, Tehran and Isfahan Oil Refinery companies during the last two trading sessions brought more concerns to this sector again. Adjusting the forecasted EPS and releasing their 2015 budget reports are announced as their closing reason. Although in general circulation there is rumor of over 20 percent positive EPS adjustment for Isfahan, the oil product sector is still the biggest loser among others. This sector recorded 32 percent loss during the last month.
The state bankers agreed to cut the interest of the one-year deposit accounts to 20% and decline the interest rate of banks mutual contracts by 2 or 3 % due to lower inflation rate. However this decision needs to be approved by the central bank’s Money and Credit Council. In case of the council’s approval this rates will be effective from May 2015. Lower interest rate will decrease their financial costs. Besides, the banks have already offered loans with current interest, there profit of which will be declared on 2015 financial reports. Although the final approval can have a short term positive effect on market, it must be noted that the private banks and the credit institutions have no willingness to follow this agreement due to their competition for absorbing more liquidity.
The possibility of interest rate changes are increasing. Besides influencing the money demand and supply, any changes in interest rate can act like a double edged sword for banks. Decline in cost of interest will lead to lower cost of money for banks. Moreover, deposit cash withdrawal will be likely to happen if the interest rates are cut by more than 2 percent. If any changes in interest rate associate with the final nuclear agreement, a huge liquidity will flow from banks to other capital market sectors.
Based on cement association reports, the request for a price increase has been submitted to the government. The capacity of Iran’s cement production is around 82 Million a year. Last year (ending 20 Mar 2015) the production and sale of 67 Million tons was recorded. Currently the cost of production has increased by 20 percent. At the present time the EXW price of cement is 1000 IRR per ton which is requested by the cement association to increase by 17 percent.