Market News

– In its latest chair meeting, the Financial Action Task Force (FATF) left Iran with another 4 months period in order to complete its reformative measures in the fight against money laundering and terrorist financing. This is another diplomatic win for Iran against disputed with the US and coming sanctions. The FATF related amendments of Iranian law has been approved by the parliament recently and now is in hands of the Guardian Council for their final consent.

– Reuters claimed that a huge shipment of 22 mn barrels of Iran oil has been exported to China’s Dalian port during the current month in a move to circle the US sanctions coming on November 04. This port would act as a parking to Iranian oil and in future NIOC will decide on who to sell. In 2014, Iran used Dalian port in order to sell its oil to India and South Korea.

– 110 European small to medium-sized companies are ready to start joint ventures with Iranian private sector in the field of Oil Industry Equipment production. All these firms can finance a figure of EUR 20 mn through the European Investment Bank and deal with Iran private sector in developing their oil-related projects. A seminar in that regard will be held in Iran inviting EU firms for further negotiations with Iranian counterparties soon.

– Today, another piece of Islamic Treasury Bills was offered to the public on Iran Fara Bourse. This new issue worth USD 238 mn – USD/IRR 42,000 – and will be matured on October 15, 2019. The issue price was IRR 000,000 which made the YTM stand at 0.00%. The below image shows the latest status of ITBs in terms of the yield curve:

In the Market

Equities closed today’s mostly session far above their flat line, a perfect start to a stormy week; the benchmark index, TEDPIX ended +3.09% above its last close and left 5,646.66 green points behind. The session began with a bang for IFB as well, with the IFEX adding as much as 3.36%, following positive H1 performance reports anticipations.

Despite the worst than expected performance of global commodities, mainly due to an empowering USD index, Iranian Metals (+2.98%) and Iron Ores (2.65%) producers rebounded from their last session low today. as most of the time, today’s market leader was once again Isfahan Mubaraka Steel (FOLD, +3.05%) which was not only got affected by the US sanction, but the H1 earnings anticipations are much higher than expected.

Analyses show that the participation of retail investors picked up today and put an end to the recent cash withdrawal fever. Just today, a figure of IRR 3,030 bn (USD 72.14 mn) has been injected into the market by individual investors. Moreover, market experts (thoughts gathered by Kian Capital Management Co.) unanimously agree with the following facts about the market:

• Blue-chip companies will earn 11% more on Sep/Oct 2018 than their previous estimates;
• The average EPS of the companies will be higher by 45% in 2019/20 than 2018/19;
• The market shall yield at least 17% in the coming 5 months until the Persian year-end. This figure might be around 32% for 2019/20;
• The P/E ratio on Oct 18 reached 5.5 which was only 4.2 in Jul/Aug;

It seems generally that unless something extraordinary happens in the coming months, politically or economically, the stock market can reward its investors with rational and stable yields.

Source:

2018, FATF leaves another grace period of 4 months for Iran!, Saturday, Oct 20, p.1,<https://agahgroup.com>