Tehran Stock Exchange
The second week of December saw the market rally to its highest point since last April, helped by rising commodity prices and a firmer US dollar. The TSE All-Share Index rose 1.7% over the week to close at 81,341. In line with increases on global commodity markets, prices of some products - including metals and petrochemical products – have risen on the local Iran Mercantile Exchange, boosting share prices of producing companies on the Tehran Stock Exchange. In addition the recent gains of the US dollar against the Iranian rial have improved the profit outlook for exporters. Those firms selling products under regulated prices based on the US dollar are also experiencing the same scenario. This week’s top gainer among the major sectors was Metallic Ore (+8.4%), with broad increases seen across the sector. Despite significant weekly gains posted by a few sectors, most of the rest fell slightly. Sugar (-6.2%), known as the alternative sector on the TSE, was the biggest faller over the week. The TSE30 index of the thirty largest companies by market capitalization experienced faster growth than the All-Share Index, closing at 3,340 with a 2.5% gain. Among the top 30s the biggest gainer of the week was Khouzestan Steel Co. (FKHZ +12.71%), while Fajr Petrochemical Co. (BFJR -1.99%) dropped the most.
The Average Daily Trade Volume (ADTV) continued to increase, adding 15% to USD 74 million and recovering from the USD 45 million level of two weeks ago. Companies with the highest weekly total trade volume included Esfahan Mobarakeh Steel Co. (FOLD +8.3%), Azarab Industries Co. (AZAB -2.53%) and Khouzestan Steel Co. (FKHZ +12.71%), recording USD 13.0 million, USD 10.2 million and 10.1 million worth of trades respectively.
Iran Fara Bourse
Similar trends on the Iran Fara Bourse (IFB) market pushed the overall index up by 3.9% to close at 862. However the ADTV did not change significantly, reaching USD 37 million. Investors’ interest focused mostly on equities on the IFB, recording USD 96 million total traded value.
Foreign Exchange Market
On the currency market, the Iranian rial fell further against major currencies. The Central Bank of Iran added 0.2% to the official rate of the US dollar, quoting it at IRR 32,150. Similarly the free market rate of USDIRR rose 0.3% to 38,858. The euro’s official rate was announced at IRR 34,632 by the CBI, a weekly gain of 1.8%. The euro strengthened more on the free market, appreciating by 6% to stand at IRR 42,328. The CBI increased the official rate of British pound sterling to IRR 40,676, up 1.2% on the week. The GBPIRR free market rate grew at the same rate to IRR 49,300.
Economic Developments
Despite their political differences, member states of the Organization of Petroleum Exporting Countries (OPEC) agreed to reduce their crude oil production to 32.5 million barrels per day (bpd) from 33.6 million bpd in six months from January 2017. In the aftermath of the OPEC agreement, the OPEC basket price rose almost 13% during the week to USD 50.98 a barrel, making a gain of 92% since last January. According to media reports, Iran is to produce up to 3.9 million bpd under the agreement, almost 0.5 million bpd more than levels that followed talks in Doha last April when OPEC did not reach an agreement to freeze output. Since January Iran’s oil production has increased by almost 30%, with the lifting of nuclear-related sanctions following the deal reached between Iran and the EU3+3 in July 2015. However lower global prices have slowed the growth of Iran’s crude oil export revenues. Iran currently exports 2.44 million bpd, according to the latest interview by Oil Minister Bijan Namdar Zangeneh, while the latest official report shows that prices averaged at USD 38 from April to September 2016. Sustained price increases following the OPEC agreement may help Hassan Rouhani’s government make up for some of the shortfalls in oil revenues, which were 12% down over the first half of the current Iranian fiscal year started March 21. On the Tehran Stock Exchange the Oil Products sector began on a positive note in response to the OPEC agreement but gains were limited to about 1% over the week. The sector has increased by 3% in the last four weeks and is up 57% since January.
Written by Ali Karbalaee and Radman Rabii
This report is solely for information and general circulation only and may not be published, circulated, reproduced or distributed in whole or in part to any other person without our written consent. This report should not be construed as an offer or solicitation for the subscription, purchase or sale of the securities mentioned herein. Whilst we have taken all reasonable care to ensure that the information contained in this publication is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness, and you should not act on it without first independently verifying its contents. Any opinion or estimate contained in this report is subject to change without notice. We have not given any consideration to and we have not made any investigation of the investment objectives, financial situation or particular needs of the recipient or any class of persons, and accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of the recipient or any class of persons acting on such information or opinion or estimate. You may wish to seek advice from a financial advisers regarding the suitability of the securities mentioned herein, taking into consideration your investment objectives, financial situation or particular needs, before making a commitment to invest in the securities.
Privileged / confidential information may be contained in this document. If you are not the addressee indicated in this document (or responsible for delivery of this message to such person), you may not copy or deliver this message to anyone. Opinions, conclusions and other information in this document that do not related to the official business of Turquoise Partners Ltd. and Firouzeh Asia Brokerage CO. and their respective connected and associated corporations shall not be understood as neither given nor endorsed.
Recommended Content
Editors’ Picks
USD/JPY flat-lines below 151.50 after soft Japanese CPI data
USD/JPY stays defensive below 151.50 after the release of a soft Japan's CPI report and mixed Industrial Production and Retail Sales data on Friday. Japanese verbal intervention also weighs on the pair amid the holiday-thinned conditions on Good Friday. US PCE inflation awaited.
AUD/USD buyers lack vigor above 0.6500 amid Good Friday trading lull
AUD/USD is trading listlessly above 0.6500 in the Asian session amid light trading on Good Friday. The Aussie pair shrugs off encouraging comments from China's FX regulator, as price action remains subdued ahead of the US PCE inflation data.
Gold flirts with record highs above $2,230, all eyes on US PCE data
Gold price flirts with record highs around $2,230 during the Asian session on Friday. The uptick of yellow metal is bolstered by the safe-haven flows amidst growing economic concerns and the prospect of interest rate cuts from the US Federal Reserve.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days. As this coiling up comes undone, investors can expect XRP to kickstart a massive rally.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.