Market News

– Following the maximum disclosure policies on Iran Banking industry, the process of transforming granted facilities to bad debts has been accelerated over the recent months. According to the stats released by a senate committee, during the years from 2006 until September 2017, the volume of non-current claims has reached a record high (seven times bigger), which made the NPL/Facilities ratio to hover around a two-digit zone. A massive portion of these bad debts was in the range of IRR 100 – 1000 bn (USD 2.5 – 24 mn). Moreover, the size of doubtful debts from non-current claims reached more than IRR 600,000 bn (USD 14.82 bn) in the year 2016, which can be categorized as NPLs anytime soon.

– Despite their support for keeping the JCPoA in place, the minister of economy of Germany stated that their government might not be able to fully protect German companies against the consequences of sanctions’ re-imposition on Iran; the German government is planning to urge the US to grant exemptions and deadline extensions while at the same time, assess the situation to offer as much help as it can. In another note, German officials have announced that 6 German banks have decided to -cooperate with companies exporting to Iran in spite of the threat of being sanctioned.

– The Statistical Center of Iran put Iran’s economy inflation rate over Ordibehesht month (21Apr- 21 May) at 8%, which shows a 1% decline in comparison with the prior month.

In the Market

Due to concerns over probable lower crude supply by Iran and Venezuela along with oil price recent jump, OPEC seems to increase its production. The Oil Products group finished in the red. Furthermore, the British Petroleum Company announced that it has postponed its cooperation with National Iranian Oil Company until the consequences of US government decision about Iran is clear.

The Chemicals industry was highly demanded. Zagros and Kharg Petrochemical companies went up by 4%; Abadan Petrochemical and Pars Carbon Black also finished with buy queues.

Influenced by news on food products price rise, including dairy products and oil, the Food & Beverages space saw a rise in demand. Margarin, Kalber Dairies and Pegah-e Khorasan Dairies were the top gainers.

Despite negative movements in the previous session, the Construction industry finished above its flat line with many like Shahed Civil & Development, Abadgaran-e Iran Tourism & Welfare and Saman Gostar-e Esfahan closing with buy queues. On the contrary, apart from a few like Lar-e Sabzevar and Fars-e No Cement companies, the rest of the Cement industry settled rather with negative trades.

Source:

2018, The Alarm on Iran Banking industry goes off?, Saturday, May 26, p.1,<https://agahgroup.com>