Iran Weekly Market Report - August 18, 2017

Firouzeh Asia Brokerage Team Firouzeh Asia Brokerage Company

Tehran Stock Exchange

Tehran stocks continued to make steady gains this week, with the Tehran Stock Exchange All-Share Index closing up 0.2% at 81,741 to reach its highest levels in 2-1/2 years. The top performing sector of the week was again Transportation & Logistics (+7.2%) due to continued demand for Islamic Republic of Iran Shipping Lines (KSHJ +7.8%). The weakest sector was Ceramics &Tiles (-5.1%), extending its losses to 8.4% over two weeks. Takceram Tile Manufacturing Co. (TKSM -19.0%) has been the main mover of the sector lately as a top pick of speculators. Despite the promising outlook for metal and mining companies, the growth rate of Base Metals (+1.4%) has slowed over the past three weeks since the sector advanced 11.4% in one week. With the All-Share Index trading at its highest for 2-1/2 years, traders are starting to show some risk aversion however.

The TSE30 index of the thirty largest companies by market capitalization closed at 3,281, up 0.3% on the week. Islamic Republic of Iran Shipping Lines (KSHJ +7.8%) led gainers, while Iran Khodro (IKCO -2.4%) was the biggest faller.

This week’s Average Daily Trade Volume fell 19% to USD 41 million. Esfahan Mobarakeh Steel Co. (FOLD +1.4%), Tabriz Oil Refining Co. (PNTB +8.4%) and Takceram Tile Manufacturing Co. (TKSM -19.0%) were the most traded shares on the TSE by value, with volumes of USD 7.0 million, USD 4.2 million and USD 3.8 million respectively.

Iran Fara Bourse

The overall index of the Iran Fara Bourse slipped 0.6% over the week to end at 918. The market’s ADTV rose 136% to USD 71 million. Equities saw higher trading volumes than other instruments, mostly because of a block trade in Maroon Petrochemical Co. (PMRZ -0.6%). Parsian Oil & Gas Development Co. (PASN +4.1%) sold a 7% stake in this ethylene producer for USD 245 million.

Foreign Exchange Market

The Central Bank of Iran continued to raise the official rate of the US dollar, which was quoted up 0.3% on the week to IRR 32,931. Since the start of the year, the dollar’s official rate has increased by 1.7%. On the free market the dollar rose 0.3% over the week to IRR 38,173. The official rate of the euro gained 0.6% to IRR 38,783 while its free market rate rose 0.1% to IRR 45,012. The British pound was quoted by the CBI down 0.4% at IRR 42,495 and on the free market it fell 0.8% to IRR 48,700.

Economic Developments

Iran’s steel production grew 13% to 4.8 million tonnes in the three months to June 21 compared with the same year-ago period. Hot rolled coil, the main product, gained 3% to 1.8 million tonnes. Coated coil products posted the highest growth rate at 65%, reaching 397,000 tonnes. The Iran Steel Manufacturing Association reported that total national output rose 11% to 18.4 million tonnes in the Iranian year ending March 19, 2017. Higher domestic output and rising steel prices have boosted the outlook and market sentiment for steel manufacturing companies quoted on the Tehran Stock Exchange. Some analysts believe the current Iranian calendar year (ending March 2018) could be outstanding for some companies, including Esfahan Mobarakeh Steel Co. (FOLD +1.4%) and Khouzestan Steel Co. (FKHZ -0.1%).

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Firouzeh Asia Brokerage Team

Firouzeh Asia Brokerage Company

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