Market News

– Iran Central Bank managed to control the forex market fluctuations through offering its rescue package over the past week. While some economists believe that such a package will act as a proper tool to relax the current fluctuations and enable the policy maker to implement its reform plans free from irrational behaviors, there are some disagreeing with high interest rates, even for a temporary and short period of time. In other words, the first group believe that lowering such a rate by decree will not yield the proper result the policy maker is looking for while the other group say that the current CBI supervisory structure and not-respecting health indices by banks will push them towards old days, paving the way for un-regulated financial institutions re-gaining power in the market. However, what is common between those for and against the CBI directive lies within the temporary nature of this solution, which will only act as a painkiller and the need to address the structural reforms in monetary and financial areas ASAP.

–  After news on the biggest financing schemes of all time for Auto Sector, the CEO of Tamadon Investment Bank announced for IRR 1,000 bn (cUSD 22 mn) worth of Sukuk Salam issuance on Iran Mercantile Exchange, meeting the working capital needs of Iran refractory coating expanded polystyrene company. Paying no coupons, the new securities are to reward investors with an annual 18% yield at maturity (applying its underlying put/call options or through a physical delivery) and has a pre mature redemption rate of 17%.

– The Statistical Center of Iran put the goods and services inflation at 8.3% over the 12 month ended February 19^th, with urban and rural inflation rates standing at 8.2% and 9.1%; while the first 2 rates have registered a 0.1% increase, the rural areas inflation rate shows a 0.1% decline in comparison with the statistics of the previous month.

– Today, 1,000,000 securities of a new Islamic Treasury Bill worth IRR 18,000 bn (cUSD 395.43 mn) has been publically offered on Iran Fara Bourse to continue the streak of government liabilities settlement. TB241 has a maturity of 2 years and priced at IRR 702,001, which made the YTM and BEY 19.89% and 18.28% respectively.

In the Market

Iran equities ended the abbreviated week on a flat note, with the TEDPIX and the IFEX breaking their previous winning streaks. TSE gained slim today (0.01%) while IFB lost -0.1%. Trades were choppy for much of the session as the last business day placed amid two national holidays.

The Statistical Center of Iran announced the 17.9% rise in construction permits issued in Tehran over the H1 of the current year. Tickers in the Construction industry went through balanced trades.

Nearly the entire Automotive group saw a rise in demand with Saipa Diesel, Mashhad Wheel Mfg. and Mehvarsazan Iran Khodro facing buy queues early in the session. Announcing to apply a 28% negative EPS adjustment, Iran Khodro Diesel ticker was halted; the company increased its loss prediction from IRR 1273 to IRR 1627. Saipa Company’s CEO also announced their plan to increase production in Saipa Diesel aimed at renovating the worn-out heavy vehicle fleet along with closer cooperation with VOLVO Company, in his sitting with Swedish ambassador to Iran.

Such positive movements resulted in the Saipa Investment Company, listed on the Investment space, to close with a buy queue. Tose’e Melli Investment and Tadbirgaran-e Fars va Khouzestan Investment also went up more than 4%.

Bama Company’s board of directors have proposed a 100% capital raise plan based on investors’ paid-in capital and claims due. Gol-e Gohar Mineral & Industrial as well as Bafq Mines on the Iron Ore space were highly demanded.

Source:

2018, Iran Central Bank; will the FX market be in the right order?, Wednesday, February 21, p.1,<https://agahgroup.com>