Tehran Stock Exchange boomed as the new FX regime comes!
– In wake of speculations on a different FX regime that suits the current situation of Iran economy (post-sanctions), Tehran Stock Exchange made history today and registered an all-time high. The trading value and volume reached record highs as the overall index stood at +128K level. According to the news, the chair of CBI, Naser Hemmati, will announce the details of a brand new FX package tonight. A realistic and pragmatic rate of currency translations for non-oil exporters on the secondary market and the volume of travel FX allocated to passengers are among the “to be amended” demands of economic experts. Technical analysis of the overall index heralds a potential rise to the +145K level.
– Rates on Islamic Treasury Bills have shown a rise as the parallel markets hiked meteorically and the economic situation faced with lots of Unknowns. Risk-free rates have reached +28% on Iran Debt Market as speculations for a higher bank deposit rate gets stronger. Below images are showing the yield curve of ITBs and risk-free rate changes over the time.
– The head of SEO announced that the idea of FX trades on Iranian Stock Exchanges is not pragmatic. According to Shapour Mohammadi, due to lack of viable transfer routs the trades of export-based companies foreign currency revenues on the exchange cannot be carried out. In other parts of his press conference, the chair of SEO indicated that the profitability of listed companies on both TSE and IFB reached a surprising figure of IRR 620,000 bn (USD 14 bn) during the first 5 months of current Persian calendar year.
In the Market
The major averages continue to trade on their recent supper bullish trend as investors are optimistic towards a better working FX package to be revealed tonight by the CBI chair. TEDPIX stood tall and registered an all-time high of 128,448.01 with 3.29% rise today. The IFEX (3.87%) did perform even better and jumped for 54.86 green points.
Almost all blue-chips of the market started the day with massive orders stuck in buy queue, however, through the session, the sale pressure won over the demand volume and made investors lose their never-ending hunger for a bit. This only held for a short period of time and once again the purchasing strike got back on its rail. Both markets together recorded a historic figure of USD 354.45 mn as the trading value which shows the wave of optimism pouring into the markets.
Heavy weighted Chemical (+4.79%) sector was once more on the top with lots if its giants closed a tick higher. Persian Gulf Petrochemical (PKLJ, +4.97%) changed hands for almost 40 mn shares and closed with near 7 mn orders left in buy queue. Pars Petrochemical (PARS, +4.93%) performed the same and placed 254.36 positive points on the index itself. Zagros Petrochemical (PZGZ, +4.99%) of IFB also were highly demanded today with 10 mn traded shares.
Elsewhere, Metal (+4.45%) sector pushed up the whole trades significantly as investors have high hopes for its future performance after their translation FX rate gets more realistic. Isfahan Mubaraka Steel (FOLD, +4.90%) was the ticker with highest trading volume (260 mn shares) and despite a mid-session pullback, the company rode the market pretty rough. Other important components of the industry followed the footsteps of their leader made a full green day for the whole sector.
In general, all markets have their eyes on tonight’s statement of CBI and the details of this so-called new FX package. Unless something out of logic happens there, it could be hoped for equity markets to perform handsomely in the coming months.
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