Market News

– In a meeting held the other night, the administration finally changed the recent unified FX policy approved for exchange houses to get involved in export FX trades at an agreed price. This way, exporters who are not obliged to sell their FX on NIMA platform (non-oil and petrochemical, aka group 3) can use exchange houses services to inject their FX revenue on a USD/IRR rate based on supply-demand. The proper execution of this plan could reduce the heavy bubble weighted on FX trades significantly.

– The Head of Majlis’ Budget and Planning Commission announced that the USD/IRR has the potential to lose around IRR 30,000 in case a secondary market is established to change the foreign exchange from exports. He then named Iran Capital Market as the most bubble-free market in the country since it has not yet applied the rise in USD/IRR.

– Referring to the safety of the JCPoA following the US pullout from this deal, the Iranian Foreign Minister announced the upcoming cooperation between Iranian firms and 5,000 SMEs as a part of negotiations with European parties. This will provide a good opportunity for the private sector, which should not be missed.

– Despite the 21.7% decline in trading volume on the housing sector, prices have gone through a 29.5% growth in Khordad month ended June 21^st in comparison with the same period last year; it has also registered a 7.7% rise compared to the previous month.

– According to the Iranian Steel Producers Association, 1.62 mn tons of products have been exported by Iranian steelmakers in the first 2 months of the current Persian calendar year, 1.21 mn of which account for Semi-finished steel, which posts a 12% growth y/y; in addition, billet and bloom along with slab export have also registered a 91% and 46% growth YOY, respectively. It is so while finished steel products export has experienced a 129% rise YoY to stand at 413,000 tons.

In the Market

The Tehran Stock Exchange’s main index hiked for 3,113.18 points, equal to 2.78%, today to reach 115,174.54; this is an all-time high for this gauge following its rally over the past sessions. Today’s session was historic in terms of trading value for the whole market and some blue-chips. The advance is mostly due to the undervalued share prices triggered by USD/IRR new policy news.

The majority of names in the Metals industry closed today’s session with by queues, led by Esfahan Steel; a subsidiary of Esfahan Steel Company exported its products to Iraq.

Unlike the previous session, nearly the entire Automobile space ended in the red; Renault Company’s CEO has announced its decision to stay in Iran despite the US pulling out from Iran deal, although it has asked Renault Pars Company for settling financials; this is said to be completely natural and not in any conflict with their statement.

Led by Gol-e Gohar Mining & Industrial, names in the Iron Ore group continued their rally. Except for Iran Zinc Mines Development and Bafq Mines, the rest closed with buy queues.

At the beginning of the session, the Oil Products space attracted investors’ attention, pushing names towards touching their highs. Except Bandar Abbas Oil Refining which entered the red eventually, the entire names finished near their ceilings. Having held its AGM, Sepahan Oil has payout IRR 2,000 DPS to its shareholders.

Source:

2018, FX policy eases in Iran Economy!, Monday, June 25, p.1,<https://agahgroup.com>