Market News

– In the unofficial news, it seems that the Iranian Parliament is firm to pass the FATF related amendments after all. Rumours have that subsequent to the reforms made by the guardian council, the parliament has passed today the amendment with 11% more votes “Ay” on this controversial directive.

– In a study carried out by the Iranian parliament research centre, three main solutions have been provided to the policymakers in order to tame the FX market volatilities in the sanctions era. The research suggests the following:

• Prioritizing the subsidized FX uses only to 20% of imported goods (vital goods)
• Omitting any other allocations of subsidized FX and redirecting the demand on that side to the free market surveilled only by the CBI
• Freeing the entrance of FX through borders and make the export appetite strong again

Moreover, a part of the study is addressing the gold coin market and suggest the transfer of pre-sold coins into coin certificates which are tradable on Iran Capital Market.

– SEO has granted its principal consent for the issuance of a new mortgage-backed Sukuks this time for Kerman Motor automaker. These securities worth IRR 2,000 bn (USD 46 bn) with a coupon rate of 16%, to be paid quarterly and will be matured in 3 years. Ayandeh Bank will act as the guarantor to this issue and Tamadon investment bank is going to be its book runner.

In the Market

Stocks finished an exciting session highly changed in an upward manner. The TEDPIX ended the day +0.49% higher on the edge of the 109K level and IFEX added +0.71% to its weekly gains. The surprisingly better than expected Q1 performance reports are the only catalyst behind today’s move as the administration is still indecisive towards a change in the nations official FX regime.

After some disappointing performances over the recent weeks, Metals (+1.98%) sector showed a bit of correction in its trends while the amazing Q1 reports on its giants surprised the participants greatly. National Copper Industries (MSMI, +5.0%) record a 115% rise in EPS and 192.2 positive points on the overall index. Other names like Khorasan Steel (FKAS, +4.99%) and Khuzestan Steel (FKHZ, +1.79%) do their parts in the industry’s bullish trend today.

Following an import ban imposed by Ministry of Industry, Mines and Trade on passenger vehicles tires (size 13, 14 and 15 inches), major names in the Plastic and Rubber (+3.90%) sector faced a massive demand from investors. Both Barez Industrial group (BARZ, +4.97%) and Kavir tire Co. (KVRZ, +4.99%) ended the day with orders left in buy queue. Other tickers of the industry managed to close the session in good green.

Elsewhere, on the Banking (+0.08%) sector, the reason behind the cancellation of almost all GMs for major banks has been revealed. Apparently, the audit organization and central bank has controversies in the way of calculating the profit realization on facilities and also the FX translations on banks’ balance sheets. However, blue-chip tickers managed to get reopened today and maintained zero to moderate changes. One of the few well-managed banks in Iran, Middle East Bank (BKHZ, +0.05), paid IRR 150 in dividends and reopened on the trading board.

In general, with the parallel markets of FX and Gold Coins burning in irrational profits, the capital market is still far behind the lines and it is expected in the near future and with the easement of political tensions, the market shall reach its upward potential.

Source:

2018, Iranian Parliament passes FATF related amendments!, Sunday, July 22, p.1,<https://agahgroup.com>