Market News

– Continuing it FX unification policies, the Iranian government is just one step shy of ratifying the latest directive on Iran economy FX regime. According to early news today (unofficial), the central bank of Iran offered a bylaw to the administration consisting of 3 different priorities for currency usage:

• Essential goods: Wheat, rice, live stocks, beans, etc. which will be offered to enjoy USD/IRR rate of 42,000 and get an IRR 400 subsidy from the state (the final rate would be 38,000). The required FX shall be supplied from oil sale revenues;
• Capital goods, raw materials and intermediate goods: The rate they will be offered is to be at USD/IRR 42,000 with no subsidies. The supply source of the currency shall be the petrochemical, metal and mineral products sale which is offered on NIMA platform;
• Consumer goods: The rate would be at USD/IRR 42,000 + export declaration difference (the final rate is speculated to be at 62,000 level). The required FX shall be supplied from the export revenues that are not obliged to be declared on NIMA platform.

– With the advancement of the capital market over recent days, the exchange tradable funds (ETFs) are now amid the top choices of inexperienced investors. Stats show that Iranian ETFs have performed handsomely over a 30-day period ended June 18, 2018. The below table demonstrates the details:

– The heads of executive, judiciary and legislative branches of Iran have held a meeting with regards to extending their support for the capital market. In a dedicated session to Tehran Stock Exchange situation and the future of this market, all participant were unanimous on the importance of capital market growth for the Iranian economy. Directing the unleashed money supply of the nation to productive branches of the economy other than FX or gold coins is the priority for president Rouhani administration.

In the Market

The early meeting of Iranian policymakers weighed at the start of today’s session in favour of the previous bullish trend and got stronger towards the ending bell. TEDPIX recorded another jump of 1.88% and stood on 106,504.01 to extend its super green trend of past days. IFEX hiked for almost 1% and closed on it historic ceiling of 1,213.40.

While capital market and its parallel peers remained at odds over the absorption of the unleashed money supply, the far better than expected performance reports of market giants turned the direction in favour of the equity exchanges. Most market sectors finished the day in positive territory and it is speculated that this trend would be sustainable if all parties play their cards well.

The super luck Metals sector (+6.60%) started the day with a hickup yet the demand pressure lift the industry even higher than the previous session. The reopening of National Copper Industries (MSMI,+19.91%) was the knockout punch which made the overall index go up by 894 points. Lots of industry components got halted due to more than 20% advance in 4 consecutive sessions.

Elsewhere, Chemical (+1.45%) names were in focus once again after the speculations of a third FX rate got stronger. Tamin Petrochemical (PTAP1, 4.17%) advanced again today to end the day with more than 2.0 mn purchase orders in the queue. Except a few, other group peers ended the day in good green.

General feelings on the market are positive for now and the continuation of the current bullish trend with small correction is in hand of administrative decision making.

Source:

2018, FX priorities in Iran Economy!, Tuesday, June 19, p.1,<https://agahgroup.com>