Market News

– In a promising news for Iranian Petrochemical sector companies, the cabinet members have decided to put some easement on their activities in order to urge them to bring their export currencies to NIMA platform at USD/IRR 42,000 rate. Therefore, from now on, the petrochemical companies “feed gas – condensate or regular” will be calculated at USD/IRR 38,000 as an incentive to bring their profitability higher.

– In an attempt to give more depth to Iranian gold market, the Central Bank’s General Secretary announced about making a market for “Gold coin prepaid certificates”. CBI injected (in form of pre-payment) 7.6 mn Bahar Azadi gold coins into the market after volatilities of FX and gold market and these securities aim to fill the gap between physical delivery dates. It shall be noted that new certificates are considered as the gold coins itself and will not be tradable until the due date.

– Following the US threats on Iran sanction snap-back, the India State Bank has announced Indian petrochemical companies that no Iran related transaction services will be offered to them after November 2018. This could cause a significant reduction in Iranian oil exports to India.

In the Market

Iranian equities outperformed today on a historic session ended ankle-deep in green. All major averages hit the record high after what can only be a giant fresh wave of money supply entering the market. After official statements supporting the direction of unleased liquidity to productive sectors and downfalls of other parallel markets, Tehran Stock Exchange jumped meteorically to well above 100,000 level. Both TEDPIX (+0.0) and IFEX (+0.0) surprised the investors as the weight of institutional supportive trades hands in hand with individual re-trust to capital markets were massive.

Today’s impressive performance was mostly indebted to the heavy weighted metal sector as the giants of the industry roared from the starting bell. Isfahan Mubaraka Steel (FOLD, +4.99%) was the flag barrier of this move that solely stamped 400 positive points on the overall index with almost 200 mn traded share. Except for a few poorly performed tickers, almost all of the sector shares ended the day in green either with orders left in buy queues or massive traded volumes in upper limits.

The supportive trend spread to other industries like Iron Ores (+0.00) and Chemicals (0.00). With the news on their new gas feed pricing model (mentioned in Market News), all of the sector tickers were highly demanded. Given the fact that they are obliged to bring their export FX to NIMA platform, the government reduced their gas feed prices in order for them to keep their EPSs high.

After the announcement made by the CEO of Renault Co. about continuing their presence in Iran, the Auto sector responded positively with most of its components ended the day in high demand. Still lacking any fundamental catalysts for a bullish movement, the sector might reward day traders for a day or two speculating for price fluctuations.

In general, it seems that the capital market was next in the row after FX and gold coin extremely out of mind performances with better intentions than the two later unproductive markets. It shall be clear in coming days that whether the capital market movement is for real or just another panic attack is on its way.

Source:

2018, Iranian Petrochemical sector to enjoy FX easements!, Sunday, June 17, p.1,<https://agahgroup.com>