Market News

– In a Resilient Economy committee meeting held the other day, the first VP of president Rouhani has announced that a brand new FX policy is on its way for Iran Economy. Stressing that the current economic situation is not permanent, he stated that the essential goods shall be provided at a subsidized USD/IRR rate of 42,000 while other sectors may enjoy a free market rate determined by the FX secondary market. Other news suggests that the CBI approved the idea of FX revenues other than oil sales to be offered at an agreed price between the market participants. This could have massive impacts on Iran Capital Market which welcomed the idea over the recent days.

– After the anticipations of a free market FX rate got stronger, the volume of individuals participating in Tehran Stock Exchange and Iran Fara Bourse has raised meaningfully. Agah Group data shows that over the past 45 days, a total volume of IRR 9,160,606 mn (USD 207.86 mn) has been flooded into the export bases (better to say the ones with FX revenues) tickers of mostly Chemicals and Metals sector. The below table demonstrates the details:

– Stressing on the continuation of Iranian oil sales to India, the head of Iran-India chamber of commerce announced that soon two listed Iranian banks are to open branches in India in order to keep the monetary transactions intact between two nations. Both Saman and Pasargad Banks are to open branches in India soon targetting to make the USD sanctions less painful to the nation’s commerce and trades.

In the Market

Stocks continued their stormy upward movement for the 4th consecutive session as anticipations towards a possible talk between Iran and US got stronger. Following a late-night statement from president Trump, market participants rushed to the market and made history today. TEDPIX jumped for 3.78% to an all-time record high and closed at 121,173.48. IFEX did better than expected and stamped a magnificent rise of 4.73%. Analysts believe that either the FX rate will be calculated at the free market rate or peace talks with the US will kick in eventually. Both scenarios will end in better profitability for all listed tickers of the capital market.

Most of the giants and blue-chips got halted today due to more than 20% consecutive change. However, before they left, they did a great job pushing the index to its all-time high. The Persian Gulf petrochemical (PKLJ, +4.99%) of heavy weighted Chemicals (+5.06%) sector was the market leader today recording a 429.22 positive points on the overall index. It is safe to say that all the industry components ended the day in good green ranging from 5 to 10%.

Metals (4.87%), on the other hand, performed stunningly with their super giant, Isfahan Mubaraka Steel (FOLD, +5%) stamped a 412.21 positive points on TEDPIX solely. However, the ticker got halted early anyway in hours and left out of the play for almost all session long. Literally, all the sector participants ended today with great purchase orders left in the queue. The possibility of a free FX rate for their export products burned them all in a better profitability mirage.

Elsewhere, with almost all the important tickers halt, there was space for smaller caps to parade and rule the entire market. Tickers of Oil Products (+5.51%), Conglomerates (+4.95%) and Iron Ores (+4.72%) were highly demanded throughout the entire session.

In general, the market had a decisive response to better expected economic and political situation. Now it is for the administration to choose whether it is going to listen to the markets or ignore it away and wait for its further reaction.

Source:

2018, Iran Economy looks for a free market FX rate!, Tuesday, July 31, p.1,<https://agahgroup.com>