Market News

– Iranian parliament votes for rationing of essential goods in the new year coming as sanctions pressures hit new levels. After failing of preferred FX dedication policy on controlling the price levels, now senators obliged the administration to go back 30 years and re-establish the rationing schemes for scarce and essential needs of Iran economy. President Rouhani’s administration shall issue electronic rations with a preferred USD/IRR rate of 42,000 in order to protect less fortunate revenues deciles.

– In order to maintain the situation of Iran’s Banking Industry, CBI announced that 5 armed forces related banks and financial entities (Ansar, Qavamin, Hekmat Iranian and Mehr Eqtesad banks along with Kowsar credit institution) will be merged into Sepah Bank (the oldest state-owned bank of Iran). All active duties of said entities will stay in the same way and this merger shall not affect their current activities in any way. These 5 banks are accountable for IRR 2,150,000 bn (USD 16.16 bn) worth of total deposits amounts outstanding in all Iranian Banks.

– Iran’s secretary of free trade zones announced that an International Exchange that deals in foreign currency and enjoys a 50-50% participation of domestic and international entities will be established soon. Stressing on the fact that any agreement with CBI is out of hand as of today, he stated that free trade zones in Iran are underdeveloped and there lies huge potentials considering all the tax and export incentives.

In the Market

Equities stayed almost unchanged today as investors fell into indecision due to higher than expected systematic and non-systematic risks of almost all parallel markets. TEDPIX (+0.04%) hiked for a very soft 72 points and stayed in mid-channel of 164K. IFEX (-0.83%), on the other hand, lost almost 18 points to stand below 2,100 level in a session mostly driven by debt securities trades.

Analysts believe that the current level of embedded risks is beyond investors tolerance which made a fair share of whom to stand aside and watch the market for now until a vivid trend shows itself. Tickers of Banking (+0.25%) sector are once again in the spotlight as the publishing of their capital raises are close, however, the trading volume and value are way below the last super bullish rally. A viable US-China trade hope made things interesting over commodity-based sectors of Metals (+0.42%) and Iron Ores (-0.05%) and the current price levels after a very short-term correction add even more sugar to trades.

On the flip side, the situation over the parallel investment markets of gold coins and FX was somehow more turbulent as prices reached iron top resistance levels. The price of Bahar Azadi gold coins dropped for more than 4.5% reached below IRR 45,000,000 per piece. FX rates showed relative weakness today and USD/IRR dopped to the edge of 130,000 level. The gold-backed ETF of Lotus Parsian IB also fell for +4.5% and closed slightly above 34,000 level.

Source:

2019, Iran economy goes back to rationing days!, Sunday, Mar 3 p.1,<https://agahgroup.com>