Iran Weekly Market Report - August 07, 2017

Tehran Stock Exchange

Tehran stocks traded around one-year highs but ended slightly lower over the week, with the TSE All-Share Index slipping 0.3% to close at 81,265. Ceramics & Tiles (+7.0%) was the top performing sector with broad gains across the index led by Takceram Tile Manu­facturing Co. (TKSM +27.9%). Its ticker reopened on Saturday after holding its AGM and surged 20.95% on strong speculative demand. The biggest faller of the week was Trans­portation & Logistics (-4.6%) with the sector mainly affected by Islamic Republic of Iran Shipping Lines (KSHJ -5.1%).

The TSE30 index of the thirty largest companies by market capitalization added 0.1% over the week to close at 3,246. Tehran Oil Refining Co. (PTEH +8.39%) and Bandar Abbas Oil Refining Co. (PNBA +2.44%) rose the most in the top 30s. Both companies returned to trading on the TSE this week and saw significant demand. The weakest shares in the top 30s were Islamic Republic of Iran Shipping Lines (KSHJ -5.1%) and urea producer Pardis Petrochemical Co. (PRDZ -5.0%).

This week the Average Daily Trade Volume (ADTV) dropped 28% to USD 51 million, the market’s lowest for three weeks. The most traded stock by value was Behpardakht Mellat Co. (PRKT +2.6%) with volume of USD 14.6 million, followed by Esfahan Mobarakeh Steel Co. (FOLD +0.65%) and National Iranian Copper Industries Co. (MSMI +1.87%), which both posted trading volumes of USD 6.1 million.

Iran Fara Bourse

The Iran Fara Bourse overall index rose 1.2% to close at 931, while its ADTV fell 5% over the week to USD 37 million. Debt securities remained the most traded instrument on the IFB, although volumes fell 13% to USD 110 million.

Foreign Exchange Market

On the forex market the Iranian rial lost more ground. The Central Bank of Iran quoted the official rate of the US dollar 0.2% higher at IRR 32,721. On the free market, the dollar gained 0.5% over the week to IRR 38,098. The official rate of the euro was set 1% higher at IRR 38,814 but on the free market it gained 2.9% to IRR 45,142.  The official rate of the British pound rose 0.7% to IRR 43,320, with its free market edging up 0.3% to IRR 49,700.

Economic Developments

Tehran home sales fell 5.4% in the month ending July 22 to 14,533 units, down 2.5% from the same month last year. The average price of one square meter of residential space rose 1.2% over the month to USD 1,212, making an annual increase of 6.2%. Over the first four months of the Iranian calendar year starting March 21, 2017, Tehran home sales slipped 0.01% compared to the same year-ago period to 51,653 units. Over two years, growth has increased by 11.6%. The average price per square meter over the past four months was USD 1,186, up 5.2% from the same year-ago period and up 8.1% from two years ago.

Iran’s non-oil trade posted a USD 2.4 billion deficit in the four months to July 22, according to the Islamic Republic of Iran Customs Administration (IRICA), with imports totaling USD 15.8 billion and exports USD 13.4 billion. IRICA reported that Iran had a USD 0.3 billion non-oil trade surplus in the Iranian year ending March 20, 2017. Export revenues fell 9.5% and imports rose 23.9%. The average price of imported goods increased by 9.2% a tonne over the year to USD 1,399 while exports per tonne rose 2.3% to USD 358. In volume terms, Iranian exports fell 11.5% over the year while imports gained 13.5%.

In the four months ending July 22, petrochemical products and gas condensates remained as Iran’s top export items, recording USD 4.6 billion and USD 2.3 billion in export revenue respectively. Compared to last year, the volume of petrochemical exports has dropped by 3.6% to 9.5 million tons, while its export revenue has also fallen by 3.7%. Similarly, Iran has exported 2.7% less of gas condensates with records standing at 5.9 million tons, gain­ing the country 4.1% less export revenue compared with last year. The top imported items in the reported period include rice (3.8%), corn feedstock (3.1%), motor vehicles with en­gine capacities of 1500 -2,000 cc (2.7%) and soybean (2.1%), costing USD 603 million, USD 484 million, USD 426 million and USD 328 million respectively.