Iran Capital Market Monthly Wrap!
One of the major risks that shadowed Iran Capital Market, and in fact the whole world, was in fact the continuation of Donald Trump presidency which now seems eliminated. However, considering the structure of power in America and the limited influence of the president without the support of either House of Representatives or Congress, it seems that Iranian policy makers shall wait until after the president elect Joe Biden’s inauguration to see whether the US foreign policy towards Iran will be any different or not. On the other hand, as the window on ratification of Iran’s next year budget is closing and the new term presidential election is near down the road, the whole sentiment towards Iranian equities is as cloudy as it can be.
The stock market is yet responding heavily to the governmental ETFs listing and that is considered as another source of uncertainty for retail investors. Most of the listed companies have now reached a very interesting levels valuation wise and in case of experiencing a state of stability in the whole economy, we can be optimistic about a bullish trend again in the market.
The situation on the parallel investment markets (e.g. Gold Coins and USD) is somehow very dependent on the future actions of the new US government towards JCPoA therefore, these markets are now considered too risky for short and medium term investments.
The real estate market also has formed a massive bubble these days and most likely will enter a phase of recession for the few years coming. This analysis is backed by the meteoric rise of P/R ratio and also a super weak demand power from the real consumers.
As for the inflation, the monthly numbers are still scary enough to ensure a +40% yearly inflation. This made the real interest rates too negative for debt securities and treasury bills so any fixed income investment would be out of question until after a massive reduction on the inflation.
All in all, considering all the influential factors, it seems the capital market has the best risk to reward ratio among all Iranian investment markets.
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: Inter@agah.com