Iran Weekly Market Report - January 06, 2016

Firouzeh Asia Brokerage Team Firouzeh Asia Brokerage Company

Tehran Stock Exchange

The Tehran Stock Exchange started the first trading week of 2017 with equities pulling back and trading in a narrow range. The TSE All-Share Index fell 0.9% to end the week at 78,990. Only a few sectors ended in positive territory, notably Base Metal (+1.4%) and Utility Service Providers (+1.0%). Slight gains by Khouzestan Steel Co. (FKHZ +1.38%) and Esfahan Mobarakeh Steel Co. (FOLD +1.31%) were the main drivers of the Base Metal sector. Despite doubts over the continued momentum of growth in commodity prices, market sentiment remains positive towards these two major steel producers in Iran, with performance over the financial year ending March 20, 2017, expected to be better than forecast. The positive trend of the US dollar against the Iranian rial on the free market has also supported market sentiment as this is driving up steel prices locally. The other sector making gains -- Utility Service Providers – was boosted by Fajr Petrochemical Co. (BFJR +3.1%). Among the sectors ending in negative territory, Non-Metallic Ore (-7.6%) was the biggest faller with losses seen across the sector. Automotive (-6.5%) was the next main loser, mostly due to SAIPA Group (SIPA -17.1%). Its ticker reopened this week after two months off the trading board, and accounted for the sector’s entire depreciation over that period. The overall performance of the top 30s was weaker than the rest of the market, with the TSE30 index of the thirty largest companies by market capitalization falling 1.1% to close at 3,228. Fajr Petrochemical Co. (BFJR +3.1%) was the top gainer, while SAIPA Group (SIPA -17.1%) was the weakest.

This week the Average Daily Trade Volume (ADTV) improved by 30%, reaching USD 65 million. However ADTV growth was due to the market’s preference for debt instruments. During the first trading week of 2017, the highest traded value was recorded by Azarb Industries Co. (AZAB -4.19%), SAIPA Group (SIPA -17.1%) and SAIPA Investment Co. (SSAP -4.19%) with USD 9.7 million, USD 7.9 million and USD 7.0 million of trades respectively.

Iran Fara Bourse

On the Iran Fara Bourse (IFB) market, the overall index closed at 845 with a 2.3% drop from last week. The IFB’s ADTV rose 13% to USD 43 million as the junior market saw higher demand for debt securities. The total traded value of debt securities rose by 40% to IRR 5,482 billion (approx. USD 140 million).

Foreign Exchange Market

The FX market saw a slight recovery of the Iranian rial on the free market. The Central Bank of Iran quoted the official US dollar rate at IRR 32,371, making no significant change from last week. But on the free market, USDIRR fell 4.1% to 39,057. The CBI official euro rate was declared at IRR 34,051, up 0.6% from last week. The EURIRR free market rate stood at 42,274, down 2.5% on the week. British pound sterling’s official CBI rate also gained 0.6%, set at IRR 39,908, while its free market rate dropped 1.8% over the week to IRR 48,600.

Economic Developments

The Islamic Republic of Iran Customs Administration (IRICA) released the latest non-oil foreign trade report covering the first nine months of the Iranian calendar year up to December 20, 2016. The non-oil trade surplus fell to USD 55 million from USD 734 million a month earlier. According to IRICA, exports reached almost USD 31.6 billion, up 9% from the same period last year, while imports gained 4% to USD 31.5 billion. In tonnage terms, exports rose 32.6% to 91.2 million tonnes, while imports fell 3.5% to 24.8 million. The main export item in the reported period was petrochemical products with USD 9.7 billion exported, only 1.2% higher than the same period last year. Despite lower prices of petrochemical products on global markets, Iran’s export revenues have remained stable through improved sales volumes which increased by 27.7% to 21.4 million tonnes. Gas condensates were the second main export item, accounting for USD 5.1 billion in revenues, 64% higher than last year. The third main export was natural gas with USD 1.9 billion, down 8.7% from the previous year. However export volumes rose 51.8% to 8.8 million tonnes. The country’s top four imports were feedstock corn (USD 1.0 billion), soybean (USD 650 million), automobile spare parts (USD 600 million) and cars with engine capacity of 1,500 to 2,000 cc (USD 540 million). China, the UAE and Iraq were top destinations for Iranian exports, accounting for USD 5.7 billion, USD 5.0 billion and USD 4.5 billion respectively. Iran’s main sources of imports were led by China, UAE and South Korea with USD 7.5 billion, USD 5.1 billion and USD 2.5 billion respectively.

Written by Ali Karbalaee and Radman Rabii

Author

Firouzeh Asia Brokerage Team

Firouzeh Asia Brokerage Company

EUR/USD climbs to two-week highs beyond 1.1900

EUR/USD is keeping its foot on the gas at the start of the week, reclaiming the 1.1900 barrier and above on Monday. The US Dollar remains on the back foot, with traders reluctant to step in ahead of Wednesday’s key January jobs report, allowing the pair to extend its upward grind for now.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold treads water around $5,000

Gold is trading in an inconclusive fashion around the key $5,000 mark on Monday week. Support is coming from fresh signs of further buying from the PBoC, while expectations that the Fed could turn more dovish, alongside concerns over its independence, keep the demand for the precious metal running.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

Bitcoin hovers around $70,000, up near 15% from last week's low of $60,000 despite low retail demand. Ethereum delicately holds $2,000 support as weak technicals weigh amid declining futures Open Interest. XRP seeks support above $1.40 after facing rejection at $1.54 during the previous week's sharp rebound.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.