Market News

– In a meeting between the head of CBI and India ambassador in Tehran, the two nations (Iran-India) have decided to make their financial transactions, in domestic currencies, operational after a series of top-level negotiations. In this line, the Indian ministry of oil announced that refineries, whom purchase Iranian oil in Rupee currency, would be exempted from tax payments on their orders. This would unlock a figure of cUSD 1.5 bn that these refineries have in debt with Iran.

– CBI’s deputy director exports announced that from the total amount of exports currencies only a tiny portion of 25.2% has been repatriated back to the economy and the rest is now sitting on foreign bank accounts of exports due to various reasons (exporters think that current free market FX rates are not real!). In line with that, CBI warned the exports that the 3 months deadline is now passed and unless they bring the outstanding FX to the cycle, legal measures will be taken against.

– Despite the fact that the money supply growth is with no doubt the biggest problem of Iran Economy these days, its combination is even scarier and recently reached a critical situation. According to the latest data, it is believed that almost 49 per cent of Iran money supply giant belongs to long-term deposits. This along with a highly probable scenario of -5.5% economic growth for the coming year made analysts think twice about the fact that what would happen to market once this huge pile of money comes to investment markets? The below picture shows the latest combination of money supply in Iran as of October 2018.

In the Market

Equities ended today with moderate gains on most of the sectors. TEDPIX (+0.27%) jumped a soft 435 points again to stand on the edge of the 162Klevel. This is while IFEX (+0.49%) performed nearly the same and closed at 1,882.67. Trading volumes and Values were also higher today that can be a good sign for the market future in case stays that way.

Banking (+6.41%) sector was once again on the spotlight today as some interesting movements happened in the industry. After almost two years of being halted, Bank Pasargad (BPAS, +32.93%) got back to the trading board with a surprising jump in price. It shall be noted that the bank’s financials are much stronger than the time of halt and that was the reason for support from retail investors. The sector trades value was almost 50% of the total market’s figure and almost all the components ended the day in good green.

Elsewhere, the mid-weighted Investment (+0.55%) sector was also hit by the banking boom since the Kharazmi Investments (IKHR, +3.92%)was a shareholder of Pasargad Bank. Other components of the sector witnessed rather balanced trades today like the whole market.

Metals (-0.89%) components performed weakly today as investors sentiment was redirected to more interesting sectors. As was told before, unless something extraordinary happens in either the global markets or domestic FX market the fundamentally strong sectors of the market will perform poorly.

Source:

2019, Iran-India officially starts domestic currency bilateral financial transactions!, Tuesday, Jan 01 p.1,<https://agahgroup.com>