Market News

– Stats show that the yield curve’s first derivative has turned positive on longer maturities of Islamic Treasury Bills which only could be translated into higher expectations on the risk-free rate for following months. Although, unless the situation stabilized in this status for some more days, the data shall be considered as inconsistent, however, analysts believe that the political uncertainties are only to blame for the raising risk-free yields on Iran debt market. The below images demonstrate the details.

Yield curve as of yesterday (before the market opening bell)

Yield curve as of yesterday (end of the market)

– The research by the Majlis Research Center has proved that Iran inflation rate faith in the current year will be affected by the policymaker strategies to deal with the forex market as well as the interest rate on banking deposits; in other words, factors like the Producer Price Index growth due to foreign currency rate jump, budget deficit, the ascending trend in money supply along with the probable re-imposition of sanctions will be in play to push the inflation rate upwards while factors like the significant decline in global commodity prices and the higher interest rate will drag this rate down, which altogether call for more attention to the way the government will handle the forex market and the interest rate.

– According to the latest report by Iran’s Customs Administration, non-oil exports over the first 2 months of the current Persian calendar year (21 March- 21 May) has registered a 22% increase to stand at $942 mn; other products exports, except from petrochemicals and gas condensates ($3.5bn), hit $4.3 bn; at the same time, the country’s non-oil imports over the said period reached $6.79 bn, posting a 0.4% rise in comparison with the same period last year. Altogether, total non-oil imports and export reached $7.73 bn, which proves a 21.9% growth compared to same period last year.

In the Market

The market carried a mixed move into the final hours of action in today’s session. The chemical-heavy TEDPIX perked up a bit after the bell yet failed to keep up the good work through the end, closed -0.13% lower at 95,409.62 and been affected mostly by chemical giant, Persian Gulf Petrochemical. IFEX also lost almost -0.3% again with the influence of a mega-cap Chemical ticker.

The Metals industry settled with moderate gains. Esfahan Steel ticker got halted; the rumour has it that the company is to positively adjust its EPS estimates. Shahid Bahonar Copper Industries ticker returned to the market at IRR 4041, 6% higher. Calcimine ticker was reopened at IRR 5005, 5.5% higher as well.

Led by Mines & Metals Development early in the session, the Iron Ore space also saw positive trades; the ticker faced a buy queue; following the letter by the Ministry of Industry, Mines and Trade on the abolition of exporting steel and metals without presenting an origin certificates, an official in the company said that this news would not negatively affect its subsidiaries; in regards to sanctions, he also mentioned that the only concern would be the transfer of foreign exchange into the company, which can be solved by importing machinery and equipment.

Besides, Russia UMMC Holding has voiced its readiness to make investments in the mining industry in order to increase the country’s production of copper, zinc and gold; the required funds for such cooperation will be provided from a 2.2 mn euro worth credit allocated by Russia.

Despite slim gains in some spare part mfg. companies, a negative sentiment dominated the Automotive group, attacked mostly by heavy sales pressure from Saipa Diesel Company, which lost more than 4%. Iran Casting Industries, Zar Spring Mfg., and Iran Lent were the top gainers, however, growing by 4 and 3%, respectively.

Source:

2018, Yield curve to be ascending on Islamic Treasury Bills!, Tuesday, May 29, p.1,<https://agahgroup.com>