Market News

– In an attempt to bypass the effect of US sanctions, the central bank of Iran is to launch its very first Iranian national cryptocurrency by the end of September 2018. This the first official response that CBI made with regards to the issue which will make the bed further development of Iranian FinTech startups and firms.

– Following the optimization of a previously made decision to unify the FX rate on Iran economy, the allocation of USD currency at the subsidized rate of 42,000 is completely limited to essential goods and pharmaceuticals now. In its very first take after entering the office, the new chair of CBI announced that from today on petrochemicals, metal producers and mining companies can exchange their US dollar export revenues on the FX secondary market and not in NIMA platform (all the news are unofficial up to this point). The below table shows companies who benefit from a free market FX rate exchange:

– In a study carried out by Part financial data processing, the trend of the money supply and its components in the Iranian economy have been analyzed for the last 5 years. As the figures indicate, the money supply volume (e.g. the nation’s liquidity volume) has now reached to IRR 15,300,000 bn (USD 347.5 bn) which shows a meteoric rise contrary to previous years. Below images demonstrate the trend of national money supply along with the administration’s liabilities to the banking sector:

In the Market

Stocks started today with a storm after unofficial news suggest that soon there will be no obligation for Chemical, Metal and Iron Ore producers to inject their FX revenues in NIMA platform at USD/IRR 42,000 and the rate shall be discovered in the FX secondary Market. The chemical-heavy TEDPIX jumped 2.83% while the IFEX also raised to 1,275.1 level showed a 3.46% growth.

The top-weighted Chemicals (4.74%) sector finished the day at the top. Since the sector will benefit the most from a free FX rate, almost all of the industry’s tickers ended the day in deep green. Persian Gulf Petrochemical (PKLJ, +4.95%) was the leader today and has recorded a 389.83 positive points on the overall index. Its super giant sister, Pars Petrochemical (PARS, 4.53%), also closed the day with better than expected demand and left near 13.5 mn orders in buy queue.

Steelmakers and Metal (+4.77%) sector, in general, stood the second in today’s storm. With literally all of its important components ending the day ankle-deep in green, the industry retracts a fair share of its previous losses. Isfahan Mubaraka Steel (FOLD, +4.97%) placed 357.12 points on the overall index. With 11% of its sales dedicated to exports, the company’s earnings are highly dependent on the translation of its FX revenues.

Elsewhere, with the heat rising in the global crude market, policy-wise, the lifting oil prices favoured the Oil Products (+3.20) components. Adding to this, a free FX rate for their products can draw a positive future for the sector’s profitability. Tehran Oil Refinery (PTEH, +4.98%) was the most demanded amid the group names. It is safe to say that all the industry’s tickers ended the day in green ranging from 1.98% to 5%.

In general, today’s session was just an indicator of a situation where the FX rate is determined by a demand-supply scheme which many believes is the only way to guard the upcoming sanctions imposed by the US.

Source:

2018, CBI is to launch the first Iranian national cryptocurrency!, Saturday, July 28, p.1,<https://agahgroup.com>