Iran Weekly Iran Market Report - 03.12.2015

The Tehran Stock Exchange witnessed slight changes this week. The TSE All-Share In­dex recorded a 0.3% minor decrease to close at 62,550 as the trading week ended on Tuesday, due to a public holiday on Wednesday. The main index of the Tehran Stock Exchange is already at its lowest level since October 14, 2015. The index fell below the 63,000 level two weeks ago and has not recovered yet.

Due to weak performances of the index during recent weeks, the technical analysis pro­spect indicates a possibility of further declines toward the support level of 61,500. This is the main support level in the current cycle, once the support level breaks, the All-Share Index may start a new cycle, revisiting September 2013’s support at 57,000. This week, the index also fell below its 50 day EMA by 1%, which occurred for the first time in 6 weeks. It should be considered that the TSE All-Share Index’s volatility has plunged by 70% in four weeks, reaching its lowest level in the last two years. The index’s measure needs to pass 63,000 once again for any uptrend landscape to be validated.

Also, the index of the thirty largest companies by market capitalization, the TSE30 index, decreased by 0.9% as it closed at 2,635. The TSE30 index has been in a negative trend since mid-November, losing 2.8% of its value in two weeks. Tamin Petroleum & Petro­chemical Investment Co. (PTAP) was the most influential share among the top 30s this week; its share price closed at IRR 2,185 (approx. USD 6.0 cents), recording a 3.3% drop.

Moreover, the Average Daily Trade Volume (ADTV) of the market declined by 27%, to stand at USD 30.4 million. The shares with the highest total traded value were Mellat Bank (BMLT), Middle East Bank (BKHZ) and Azarab Industrial Co. (AZAB), with weekly trade volumes of USD 7.1, USD 4.4 and USD 3.4 million respectively. Mellat Bank’s shares closed at IRR 1,939 (approx. USD 5.4 cents), 0.56% lower than the previous week. Middle East bank’s share price also slipped by 1.6% as it closed at IRR 2,893 (approx. USD 8.0 cents). Likewise, Azarab Industrial Company’s shares recorded a 1.3% decrease as they closed at IRR 3,027 (approx. USD 8.4 cents).

Meanwhile, Iran’s FX market witnessed increases in both free market and official rates of the USD. The official rate of the USD was announced by the Central Bank of Iran at IRR 30,096, 0.23% higher than last week. At the same time, the free market USD rate reached IRR 35,855 with a 0.28% increase. However, the official EURIRR rate slipped by 0.2%, quoted at 31,833, while the free market rate of the EUR recorded a 0.25% in­crease, reaching IRR 38,724. Similarly, the official rate of the British Pound Sterling has been announced at IRR 45,403 which is 0.04% lower than last week’s price. However, the free market GBPIRR rate increased by 0.73% to 55,100.

The Central Bank of Iran (CBI) released its monthly report on the housing market in Teh­ran. The report covered the eight months since the start of the Iranian Calendar Year (March 21 - October 21, 2015). The statistics demonstrate growth in the number of the sales by 4.4% since last month and by 6.7% compared to the same period last year, reaching 12,056. Moreover, the average price per square meter has declined by 2% com­pared to the same period last year, reported at IRR 38.5 million (approx. USD 1,075). According to the report, 55% of the houses sold in the last month (6,663 units) have been newly constructed buildings (less than 5 years old). It's worth to mention that 57% of the sales in the reported month are houses smaller than 80 square meters, while 47% of the houses sold have been traded for less than IRR 2,200 million (approx. USD 61,300). Overall, 96,152 houses have been sold within the first eight months of the Iranian Calen­dar Year, recording a 16% decline compared to the same period last year. Likewise, the average price per square meter has slipped by 1%.

Furthermore, the Iranian Customs Administration (ICA) released its initial overview of the non-oil trade balance for the first eight months of the current Iranian Calendar Year (March 21-October 21 2015). According to the ICA, the total cost of imported goods and services is USD 27.3 billion, while exports are reported at USD 29.6 billion. By comparing the data with the same period in the previous year it is evident that total import value has dropped by 21%, however, value of exports have only fallen by 10.5%. The main import­ed items are corn feedstock (3.4%), edible wheat (1.93%), automobiles (1.90%) and soy­bean (1.89%). On the other hand the main exported items from Iran are gas condensates (17%) and petrochemical products (35%). By looking at Iran’s trading partners it is seen that most of the Iran’s exports have gone to China, Iraq, United Arab Emirates, India and Afghanistan. While the most of the imported items have arrived from China, United Arab Emirates, South Korea, Turkey and Switzerland.