Market News

– After a series of wild and inept fluctuations of FX rates on the Iranian economy, caused USD/IRR pair to reach +19,000 level, yesterday and by the injection of some good news, the Iranian Rial appreciates and the FX market got relieved for a while when rates went south rapidly for both USD/IRR and Bahar Azadi gold coins. Analysts believe the following reasons are the main catalysts behind the other day’s downward rally:

• A possible oil-related agreement between Iran and EU assures the government on its oil sales;
• Open market operation of CBI with regards to FX rates (backed by the above hypothesis – Iranian government has no longer concerns about its FX resources)
• Possible ratification of FATF related amendments (joining the CFT convention) on the parliament today’s session.
• Surprising verdicts for disrupters of the FX market (which caused household FX stockpile hitting the market)

Moreover, the technical analysis of US dollar shows that there is the possibility of a price correction (up to 12,000 level):

– Following the development of Iranian Startups in Iran Alternative Investment Ecosystem, the tax administration has announced the guidelines for knowledge-based companies and early-stage startups with regards to their taxation fillings. According to this new directive, startups shall file their tax cases like any other companies in order not to be penalized and be able to utilize from tax incentives.

In the Market

Stocks opened today on a greatly lower note, mainly due to the falling prices of USD/IRR and other currencies. The trading session had a hint of irrational thinking behind as most of the tickers stock in sell queues were right on the perfect price path. TEDPIX (-3.69%) lost more than 7,000 points and got back into 188K level again. IFEX (-3.73%) fell even worse and lost 75.43 points.

Analysts believe that the market needed a correction and this is it, however, the lack of analyses along with the emotional behaviour of rookie traders added up to the correction pace. It is widely anticipated that tomorrow’s session would be the same with a little less sale pressure and the overall index can rest on the 180K level.

Agah experts believe that the proceeds of investors today’s trades would be parked in fixed income ETFs until the market finds it path again and there would be no withdrawal from the market. The below image is an example of said funds precisely show that during the Q1 of 1397 (2018-19) when the capital market experience days of vertigo and had no vivid trajectory, a massive amount of funds had been injected into the ETF.

This is while, during the Q2, when markets showed signals for a rise, huge amounts of funds were withdrawn. Now it shall be monitored for the next couple of days to see whether proceeds will go into fixed income ETFs or not.

Source:

2018, Iranian Rial appreciates as positive signs of reform rise!, Tuesday, Oct 02, p.1,<https://agahgroup.com>