Market News

– After a period of an absolute rise in risk-free rates in Iran Economy, reaching +30% for Islamic Treasury Bills, it seems now rates are about to experience a fall into 27% channel once again which carries out two important news. Over the recent months with economic inflammation, guaranteed interest rates took a hike mainly due to the fact that other parallel markets performed by far better (Gold coins: 150%, FX: 125%, Equities: +40%, Real Estate: c32%). Now the rates are falling down and it could only mean:

• Investors are aware that other markets are not far from their high;
• Inflation expectation amid the nation has become more reasonable;

The below table shows the latest status of ITBs as of today:

– Following the policies to amend Iranian Banks structures, CBI announced a very important amendment to its previously ratified directive on banks shareholding structure. According to this new decree:

• The ownership of up to 10% in banks and credit institution is allowed for a single investor (individual or institutional) without CBI’s approval;
• For the ownership of more than 10 and up to 20 per cent and more than 20 up to 33 per cent, the CBI’s consent is a must (in two different level);
• Any previously owned shares more than mentioned figures and without required documentation will be treated as excess ownership and has no voting rights, stock rights and dividends. Any revenues generated from stock rights sales and cash dividends will be subjected to a 100% tax and its correspondent voting right will be reserved for the Ministry of economic affairs.
• Domestic and foreign investors will be treated the same in this regard.

– Following the successful entrance of Saffron to Iran Mercantile Exchange by offering futures contracts, now the policy-makers are to pivot courses towards more agricultural products replacing the non-productive commodity of gold coins. Saffron futures registered more than 2.2 contracts on IME which made the board think of new underlying assets.

– Bloomberg reports have that Iranian oil exports reduced by 755K barrels per day to go under 2.1 which is the lowest figure since March 2016. Two months left to the US imposed sanctions, analysts believe that there might be more reduction in the nation’s oil sales to EU, India and other Asian buyers. This is while the EU oil imports from Iran show a thin rise for the month of August and reached 355K bpd versus the previous number of 323K.

In the Market

Equities performed surprisingly disappointing today as investors get more pesimistic towards the future of Iranian economy get affected more than anticipations by the US imposed sanctions. Both major indices plummeted but the sale pressure relieved through the ending bell make all eyes tomorrow’s session. TEDPIX (-1.79%) fell for almost 2,500 points while IFEX (-2.48%) did even worse and closed at 1,506.90.

Despite its attempts to save the day, Banking (+0.56%) sector advance was not enough. The sector’s giants, Mellat Bank (BMLT, +4.48%) once again was on the leaderboard with 751 mn traded shares which led to 78.65 green points on the overall index. Other names of the industry were traded on a broad base moderation and the ones ended the other day with a but queue finished today in a sell one.

The continuing disputes over IME pricing schemes along with one by one cancellation of commodities offering in the exchange made a sad day for Metals (-2.81%) tickers. The sector’s blue-chips, who have export concerns amid the US sanctions, performed poorly and made the most of today’s losses. Isfahan Mubaraka Steel (FOLD, -2.69%) hand in hand with National Copper Industries (MSMI, -3.87%) recorded almost 500 negative points on the index. It is safe to say that other names, except a few, ended the day in the deep red.

Finally, the situation over Chemicals (-2.31%) sector was not any different and its major names performed fat lower than expectations. Analysts believe that reaching their technical resistant levels along with a need for a time-price correction are the main catalysts behind their bearish trend. Parsian Oil & Gas (PASN, -4.80%), Persian Gulf Petrochemical (PKLJ, -1.38%) and Tamin Oil & Gas (PTAP, -3.97%) were the leaders of today’s red battle for the industry.

Source:

2018, Risk-free rate changes course in Iran Economy!, Sunday, Sep 2, p.1,<https://agahgroup.com>