In the Market

– After the devastating devaluation of Iranian Rial against foreign currencies, the nation’s money started a recovering trend with chaotic ups and downs. The unbelievable rates of more than 19,000 for USD/IRR plummeted to reasonable levels (circa 12,000) and went down even further during the past week (entering 11,000 band). The main reason behind this rapid recovery was indeed lying behind Iran Central Bank latest anti-money laundering decision limiting the daily transaction cap of P.O.S devices. Previously, the smuggled POS devices outside of the country were the source of abnormal fake demands for AED, IQD, AFN and other currencies in Herat, Dubai and Sulaymaniyah which had no cap limits. Now bounding the daily limit to IRR 500 bn made FX speculators unable to place orders without clearing the deal in person and the growing outside market with no controls are in hands of CBI for good.

– After the US granting 8 countries exemptions with regards to their Iran oil purchases, Japan’s minister of economy and trades told the press that Japanese oil refineries are to cut any trades with Iran before April 2019 and now seeking alternatives for Iranian oil.  Just before the sanction’s snapback, Japan was importing 164,900 barrels of Iran oil per day (equal to 5% of the nation’s imports).

– A brief look over Iran’s customs stats shows that the country’s exports have seen no noticeable decline after the sanctions snapback. Despite a thinly iced hickup in Propane, Buthane and CNG exports, data tells that other headlines of exports were with an acceptable increase. The capital market participants had doubts regarding the ability of good exports after the November 4th which will be addressed more thoroughly in companies monthly performance reports later this month.

In the Market

Tehran Stock Exchange chipped in another loss today after all major market factors signal a state of time-consuming correction. Disappointing guidance from market leaders kept losses in check. TEDPIX (-2.90%) fell for more than 5,200 points to lose all its short-term technical supports and closed at 173,557.70. IFEX (-1.65%) continued its bearish trend again and stamped a negative 31.58 points performance today.

Agah analysis shows that the pace of money withdrawing by retail investors has now accelerated and roughly one-third (1/3) – IRR 1,910 bn from IRR 5,930 bn – of the previously injected cash buy the individuals, which caused the major part of recent jumps, has now been withdrawn from the market.

Today’s fall was mostly driven by tickers of mid-weighted Banking (-3.52%) and Auto (-3.22%) sectors. The delay in CBI’s acceptance for the banks’ FX reserves translation rate along with indecisions of automakers for a price hike made investors pessimistic towards these industries which were once market leaders.

Source:

2018, Iran Central Bank fights money laundering in FX transactions!, Sunday, Nov 18, p.1,<https://agahgroup.com>