Tehran Stock Exchange went up by 342 points mostly influenced by mega-cap names like Esfahan’s Mobarake Steel and also thanks to better than expected Q2 performances of Metal producers. However, the value of trades in both the TSE and IFB was light ahead of the upcoming holidays.
– Following the foreign investors’ entrance to the real part of Iran’s economy, a female individual investor submitted her request to buy an 18.84% stake in Asia Insurance Co, (one of the Iranian Insurance Sector blue-chips) to the Central Insurance of I.R. Iran. Right now the SEO is evaluating the customer (KYC process) along with the possible routes of fund transfers. Earlier last year, Iranian government officially divested from Asia Insurance Company complying with latest privatization directives.
– In an interview, the head of the Securities and Exchange Organization of Iran enumerated the reasons for the 27% growth of the Tehran Stock Exchange major index (TEDPIX) in the current year. Referring to the whole trading value (4 exchange markets) exceeding IRR 2,100,000 (cUSD 47 bn) bn, he firstly mentioned President Rouhani’s administration’s economic policies to lower interest rate on banking deposits, which also dragged bonds yield rate and therefore, financing costs for companies down as well. Another factor was companies’ profitability growth, mostly due to facilities offered by the government and global commodity prices soar. A part of this growth was due to the USD/IRR increase, which raised export-oriented companies’ income. Applying changes to the halting-reopening mechanism of the market to accelerate the whole process played another crucial role by increasing the market liquidity. To all these, the reduction in trading commission must also be noted, which will show its positive effect in the long run.
– With IRR 1,180 bn in the capital, 117,943,000 shares, equal to 10%, of Shafa Darou Investment (SHFA1) went public on Tehran Stock Exchange through book building method ranging at IRR4,000-IRR4,150. The company is owned by Ayande Pouya (81%), Tose’e Melli Investment Group (13%) and Tose’e Melli Investment (5%). Each investor, both individual and institutional were allowed to purchase 1,500 shares at most, whose price discovered to be IRR 4,150.
– Today 10% of Shouyande (detergent) Industry Management Co. (SHOY1) offered to public on Tehran Stock Exchange and 100 mn shares of the company got listed among Chemical tickers. The estimated price range during book building was from IRR 2,600 to IRR 2,730 and finally the ticker priced at IRR 2,730. SHOY1 is a subsidiary of Behshahr Industries holding (TSBE1) with its main focus on detergent production. The company’s sales are expected to rise 30% in upcoming year despite the surge of its revenues by 11%. The forecasted EPS for FY2018/19 is IRR 420 which make the P/E ratio 6.4.
– The CBI statistics on Iran’s Economy components in Aban month (Oct. 23-Nov.21) demonstrate a change in the money supply face; money volume has increased by 3% over the quarter ended in Aban, while it had grown 1.5% in the same period last year. Furthermore, the near money experienced a 4.4% increase over the period while it had gone through a 6.3% rise in the previous year. In 30 days ended November 21, 2017, the money volume grew up by 4.1%; but the near money only added 1.2%. In economy, near money can be described as a shelter for money itself; mostly due to fact that a rise in this component of a nation’s money supply would fuel the banking resources and has a lesser effect on the inflation. On the other hand, money volume growth will push the money supply in to an ambush state. The slightest trigger in one of commodity markets (e.g. Forex and gold) would release the volume to said markets and the result will be stamped as inflation. In fact, it appears that after the usually expected rise in USD in Mehr, which was attributed to demand growth, a part of the freed money was directed to the forex market, which justifies to some extent the recent intense speculation and therefore, the ongoing growth in foreign exchange. Such a situation requires monetary policy makers to come up with a new method for managing money supply and not allowing the attempts to bring down inflation rate into the one-digit zone to go in vain.
– “The recent directive by SEO addressing brokers to provide their clients on longer with credit lines was an absolute misunderstanding” said Rouh Allah Mirsanei the Secretary-General of Iranian brokerages association. He continued: “the previous customers credit lines bylaw is still in place and SEO is just to mitigate any unnecessary risks by simply recording each client credit history and eliminate probable adverse balance and delays in payments.” According to the SEBA Secretary-General, brokers can continue offering their customers with purchase credits like before.
– Head of the Economic Commission of the Iranian parliament announced the bill releasing justice shares for trades on Tehran Stock Exchange will be notified on the next public hearing of Majlis anytime soon. “We are against distributing earnings of justice shares and principal asset along with the equity ownership shall be in hands of shareholders themselves” Said Pourebrahimi on a radio interview.
– From the beginning of the current Iranian year (March 21st, 2017) to date, Tehran Stock Exchange and Iran Fara Bourse issuers paid a figure of IRR 248,000 bn (cUSD 5.77 bn) in cash dividends to their investors which made the DPS average equal to IRR 267. Moreover, the net profit (loss) of the Iranian listed companies reached IRR 476,917 bn on November 2017 showing IRR 17,272 bn (Ave. IRR 355 per share) raise contrary to the previous month.
– After a combination of USD/IRR, crude oil and global metal prices rise (mostly arising from OPEC severe control on oil supply and China economic and environmental policies) accompanied by stricter regulations and supervision with regards to lowering interest rate on banking deposits in the country, many are questioning whether this ascending trend of Tehran Stock Exchange will continue in the foreseeable future or not. With the All-Share Index hike over the past 5 months, which benefited investors with a more than 20% return, the Metals space registered a performance of 45%, which followed by the Oil Products space and Iron Ore groups posting 44% and 43% return over the said period; the Chemicals industry also offered an above 35% return. Many believe that a sharp and heavy correction is not expected in the global markets, which multiplied by the expected increasing trend in US dollar price until the end of the current Persian calendar year will keep our hopes up in regard with the market growth. It is worth mentioning that the Automotive and Pharmaceuticals industries are the two lagging behind the TEDPIX, which are usually assumed to experience a relative growth at this time of year when their AGMs are being held.