Market News

– In an interview published by Donya-e-Eqtesad, three hyperinflation pitfalls that policymakers must avoid in order to prevent Iran Economy from entering into a hyperinflation have been analyzed as below:

• Overdrafting of banks from CBI’s resources in times of asset markets fluctuations which adds pressure to the monetary base;
• The wrongful behaviour of the banking and financial system which only causes speculative trends;
• The administration reaction to the first wave of high inflation and adjusting its expenses and wages accordingly;

– Iran Economy have experienced turbulence over the recent weeks. After the impeachment of the minister of the economy by parliament members, the economic status is now more unclear than before. The pricing scheme of commodities in Iran Mercantile Exchange which has a direct effect on Iran’s petrochemical-metal based market along with day to day instantaneous decisions of different ministries made the situation even worse. Despite the far better than expected performance of the capital market, stats show that during a one year period (YTD) unproductive parallel markets of gold and its coins performed strongly higher than equities. The below table demonstrates the details:

– Deputy publishers and members of SEO, Rouhallah Hosseini Moghadam, announced two new industries are to be added on Iran Capital Market soon. According to Hosseini Moghadam, “Retail” and “Aviation” sectors are in line to have their very first companies get listed on either Tehran Stock Exchange and Iran Fara Bourse. The first company of the Retail sector will be “Ofogh Kourosh chain stores” which is now processing by TSE admission team.

In the Market

Equities continued their super bullish trend on today’s session again by stamping a new all-time record on all major indices. TEDPIX rose by 1.25% to stand above the 140K level while IFEX (+1.05%) closed on 1,578.17 which is 16.39 positive points higher than its previous place.

Better than expected monthly reports along with amendments on a free FX rate effect on companies’ financial statements are the main catalysts behind today jumps. Technical analysts believed that markets reached their designated goals sooner than expected and there shall be a moderate correction phase after all.

Oil Products (+4.21%) sector was the top performer of today’s action as almost all of its tickers published a profitability amendment after the liberation of FX rate for their products sale prices. Differ from 9% to 25%, a secondary market currency translation put most of the refineries on spotlight today. Isfahan Oil Refinery (PENS, +6.89%) released its report today and got back to trades 9% higher. Tehran (PTEH, +4.68%) and Bandar Abbas (PNBA, +4.35%) Oil refineries followed the trend as well only with lower volumes.

The controversial Metals (+1.47%) industry were highly demanded right after the opening bell, however, the never-ending battle of IME pricing schemes added to sale pressure towards the session closing. Isfahan Mubaraka Steel (FOLD, +1.32%) changed hands for almost 60 mn shares and placed 123.96 green points on the index solely. National Copper Industries (MSMI, +1.23%) performed worse than expected due to its suspicious IME trades of sheets and wires.

Interesting fact of today’s trades, as well as the other day’s, was the turning of retail investors towards small caps and non-commodity based sectors. It seems that the bullish trend that dominated the market for a while, made the retail and small investors appetite more in favor of sectors with less drama.

Source:

2018, Hyperinflation pitfalls analyzed in Iran Economy!, Monday, Aug 27, p.1,<https://agahgroup.com>