Tourism Bank Fixed Income Mutual Fund Fact Sheet (Sep 2016)
Issuance of salam sukuk for PGSOC
The salam securities issued by the largest gasoline producer in the country, namely Persian Gulf Star Oil Company, sold out in a fraction of seconds on Iran Energy Exchange (IRENEX). The financing facilitated by the issuance of 1,400,592 contracts with the base price of IRR 2,141,950. The bond’s yield rate is 20% paid on a daily basis to the holders of the salam.
Banks loaned more than USD3.5bn on the first third!
- CBI stats show a 37.8% increase on loans granted in 2016/17 first four months. Facilities paid as working capital had a 67.8% share from the total figure and grew 42.6% contrary to the same period last year.
- Industries to warm up!
Spring stats on 32 chosen industrial products, showing a growth rate of 60% in 19 items while a drop for the rest. It proves that finally there is an end to depression over the sector. Lower oil prices, reduction in government revenues and lack of demand in the market were to blame for the unprecedented downturn of recent years. In case of a reform in structures, lifting of the barriers and non-inflationary exit from recession it would lead to a way out of the current negative status.
Surfing on audacity edge!
Changes have been seen in Iran’s economic climate over the past couple of years. Now the nation feels homey with the Start-Ups, Ventures or accelerators. Even IFB published the prospectus and statute on VC funds.
Indeed one of the main challenges the new ideas face with, is to reap the funds they need. Financing may take months to be ready and make entrepreneurs cold feet, eventually end in depression over the whole project. Above the average failure rate in brand new small businesses make it somehow impossible for newcomers to demand funds from financial institutions, needless to say they are unwilling to do so.
Single digit Inflation: Bumpy road ahead
CBI’s latest stats shows the mean inflation rate fell under 10% after 68 months and stamped single digits. P to P rate is also on its decade low: 6.8%. It seems the administration stayed on the promise, yet the question is to what cost.
CPI came to 240.9 in June, however the opposition insists that there is only a recession left to deal with. It is noteworthy to express that nations like Venezuela, contrary to a deep depression, are struggling with even three digit inflation.
Interest Rate Cut While Market Rise?
- In addition to its importance in the banking structure, market experts hold the belief that the lowering of the interest rate on bank deposits to 15%, to be formally executed from tomorrow, will contribute to the rise of the market p/e ratio on one hand and reduce companies’ financial cost on the other; this has the potential to eventually increase companies’ gross profit and therefore, lead to the capital market boom. Unfortunately, the volume and value of trades has fallen sharply in comparison with the period after the JCPOA struck. Referring to the recent fallings in the all-share index, such experts blame technical analysts whose financial decisions have led to the formation of a short term investment horizon among investors. Market activists assume that under the current situation, creating motivation to attract money to the capital market and pull it out from recession is a necessity, which was formed through setting tax exemption law, especially VAT. Such instruments are known to kick start demand on one hand and prevent the formation of a bubble on the other.
- After the announcement of selling 73% of Zob’s stake by Iran and the Steel Pensioners’ Fund for retired Iranian Steel Workers, while also planning to boost its production, an aware source has stated that companies from South Korea and Luxemburg have expressed interest in buying a part of Esfahan Steel Company’s (Zob) shares.
- Daroupaksh Pharmaceutical Ingredients Company has submitted its request to raise its capital by 200% mainly based of its shareholders’ paid-in capital and claims due. This plan is targeted to improve and upgrade the product line, launch new product lines as well as financing the required working capital.
While the Iranian insurance market is reasonably developed based on regional standards, there is still significant potential for growth, especially in life segment and most non-compulsory non-life lines, according to BMI (Business Monitor International).
Hence, the lifting of trade sanctions should act as a spur to the growth in economy, leading to rise in household disposable income levels and its consequent positive impact on the segment’s growth, considering low insurance penetration of just 1.9%, at home, over 2014/15, when the international average standing at 6.2%.
- Market P/E has raised
Amid different TSE sectors, the P/E ratio is seen growth compared with the same period prior year. 33 out of 36 industries were subjected to a substantial growth in the ratio as of May 20. Textile took a big leap and placed the first with 293.3% increase. Coal & iron ores mining are next in the line with solid 167.3% and 145.6% development in their price to earnings. Nonetheless, it has to be mentioned that the case for Medical equipment, with the sole ticker of “Kontor”, were completely different and it took a 66.5 % downturn to stamp the utmost drop of the year.
Mahan Airlines Sukuks were sold on IFB today. The aviation giant decided to finance two airbuses by issuing Ijara securities with 21% nominal rate at par value of 1,000,000. The coupon payments will be quarterly and the maturity is in 4 years. The ask demand was 16 times higher than 2.1 mn issued papers and in an eye blink IRR 2,100 mn worth of securities were purchased.
“The idea of financing though capital markets is fast, easy and cheap” said Reza Namakshenas, the CEO of Mahan air.
In the Market
TSE index, TEDPIX, were down 303.62 points (-0.40%) this morning and stood on 76,387. Despite a moderate hike early session, most of the tickers remain red. There is absolutely no specific catalysts behind the fall according to the analysts. Altogether, the economic data released during the past week and the positive political news, kept the possibility of a summer hike, however the market begs to differ to this point.
The signals in Auto sector were mixed today. “Saipa” traded over 240 mn shares and closed at 1,281 IRR (+1.03%) to compensate a little for the catastrophic loss of yesterday. “Khodro on the other hand mustered moderate loss and closed at 3,594 IRR (-1.13%). Rumors behind USD 1 bn finance contract with Korea may tickled the giant’s trading trend. Other industry participants also were traded lower to prove that weakness in the sector fundamentals are only to blame for recent dizzy trend.
Banking went under a mild swing amid the old capital raising news. Analysts believes that it might be the actual catalyst to accelerate the sector’s profitability plans. Most of the trades were happened near support levels. With more than 15 mn shares traded, Mellat Bank placed the second, having the worst impact on TEDPIX. The trend was followed by Tejarat bank and the ticker closed at 1,054 IRR to stamp -18.23 point on the index.
Bandar Abbas oil refinery was the first to pull down on TSE. Although the trading volume was not high, however “Shebandar” had the worst impact on the index (-60.23 points). According to analysts, the lack of proper support from major shareholders is among reasons weaken the trades’ trend on a bear day like today. “Sehpna” on the other hand gained more than 2% and closed at 3,026 IRR to be the first with most positive impact.
It is safe to say the whole market saw below-average trading volume over the past 2 weeks and the reduced activity is bold. The trading week is going to be pretty quiet on the economic front, and only a handful of reports that cross the wires, might revive the investors’ sentiment.
DISCLAIMER: This report has been prepared and issued by Agah Brokerage Firm on the basis of publicly available information, internally developed data and other sources believed to be reliable. The information contained herein is not guaranteed, does not purport to be comprehensive and is strictly for information purposes only. Agah does not assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions. Any expressions of opinions are subject to change without notice.
To contact reporters: email@example.com