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.
“It’s expected that the exchange prices turn to a single exchange rate in the Petrochemical Industry soon “The CEO of the National Petrochemical Co. said. Existence of two official and free float exchange rates has made so many problems for this industry. He mentioned that some of the petrochemical complexes have no willingness for selling their products to other domestic companies with official exchange rate since they are able to export with higher free rates. However, during the meeting between Seyf, the chief of central bank of Iran, and PMs ; last night, some issues of the exchange market were discussed in order to support the domestic producers, and Seyf clarified that “at this moment with regard to the nation’s economic situation, having a single exchange rate is not possible”.
“Transparency in the market could have an essential role in improving the nation’s economic productivity”, Fetanat, the chief of the Security and Exchange Organization of Iran said today. He added that not even the shareholders will benefit from the market transparency, the government and taxing system will also profit. He clarified that publishing only government circulars and bills will not be enough for this purpose. He mentioned that improving the transparency of financial statements is one of the main SEO’s objectives and soon the opaque sectors will be required to publish monthly financial reports.
- During the past few days, in different events, the chief of central bank of Iran, Seif, emphasized the central bank’s plan for the banking interest rates. However, he asked the banks to reintegrate the rates first by themselves before any action taken place by the central bank. The Melli Bank’s CEO also said that the deposit interest rate could be defined at 20%level, if the inflation rate would be announced at 15%. .it is clear that the interest rate will definitely decrease next year but it’s unlikely to become less than 18%.
- In the metal sector, among 19 companies only 7 predicted the rise in their return compared with current year. At the top is Kashan Amirkabir Steel Co. with 23 percent increase in sale and 108 percent increase in its net income. The company predicted to reach 905 IRR EPS in FY2015 with 111 percent improvement compared with current year. Mobarekh Steel CO. with the highest market cap in the group, forecasted 23% profit margin with 11 percent decline in its EPS compared with current year. With regard to the market cap, the second place belongs to National Iranian Copper Industries Co. , which predicted 5 percent decline in its next year return. However, National Iranian Lead & Zinc Co. which is a losing company forecasted 8 percent increase in its next year sale and decreased the total loss 137 percent compare with current year.
- The fixed income mutual funds are permitted to invest in equity or blended mutual funds, the last directive of SEO’s financial instrument affairs department indicated. From the issue date of this directive, with no special procedures, the fixed income funds can purchase the units of equity or blended mutual funds if the both fund managers are not the same legal entity. For Investing in such units all the related curricula must be met as investing in stokes.
- The impact of economic interactions in the USA and the Dollar’s rally against Euro on Iran’ markets will be most on the commodity prices. 70 percent of companies’ performances in Iran depend on the price of commodities. Euro depreciation will impact on the companies with imports from Euro region. Electronics and pharmaceutical sectors are the main importers from Euro. The companies with Euro assets will also feel the negative impact in their balance sheets. Currently the market does not pay attention to this matter. However, by continuing the depreciation of Euro, the attentions are expected to turn to this issue.