Iran Weekly Market Report - July 17, 2017

Tehran Stock Exchange

The Tehran Stock Exchange All-Share Index closed up 1.0% at 79,509 for its first weekly gain since late May. The main TSE index was boosted by advances in large-cap stocks, including Golgohar Mining & Industrial Co. (GOLG +4.9%), Khouzestan Steel Co. (FKHZ +13.2%) and Mobile Telecommunication Co. of Iran (HRMZ +4.6%). The top performing sector of the week was Sugar (+6.9%), singled out by speculative traders. Paper Products (-3.4%), a favorite for speculators in previous weeks, became the biggest faller in the trad­ing week ending July 12.

The TSE30 index of the thirty largest companies by market capitalization rose 1.7% over the week, closing at 3,099. Promising financial reports issued by metal, mining and oil product companies lifted several constituents of the top 30s. The TSE30 index has reached its highest level for a month, with gains also reflected in the Turquoise TSE30 Index ETF (CFIF +1.5%).

This week the Average Daily Trade Volume (ADTV) increased 45% to USD 61 million. Despite higher demand for stocks, market appetite is still weighted towards debt securi­ties. Companies most traded by value were Asan Pardakht Persian Co. (APPE +6.0%), Esfahan Mobarakeh Steel Co. (FOLD +4.5%) and Parsian Electronic Commerce Co. (EPRS +6.4%) with USD 7.9 million, USD 5.3 million and USD 4.4 million respectively.

Iran Fara Bourse

Gains were also seen on the Iran Fara Bourse with its overall index advancing 1.1% to end the week at 909. Similarly the ADTV on the IFB increased 29% to USD 48 million, while debt securities remained the most traded, with total volume of USD 142 million.

Foreign Exchange Market

The Central Bank of Iran increased the official rate of the US dollar by 0.2% to IRR 32,609 but on the free market the dollar fell 0.3% to IRR 37,796. The official rate of the euro was quoted 1% higher by the CBI at IRR 37,291 while on the free market it dropped 1.7% to IRR 42,874. The British pound’s official rate was set 0.2% lower at IRR 42,055 while ster­ling slipped 0.1% on the free market to IRR 48,750.

Economic Developments

Unemployment in the three months to June 21 edged up to 12.6% from 12.5% in the pre­vious quarter, according to Statistical Centre of Iran (SCI) data for the active population over 10 years old. Its report for the first quarter of the current Iranian calendar year showed the jobless rate for those aged 15 to 29 years rose to 26.4% from 25.5%. Over the past five years the unemployment rate has ranged from a low of 9.5% in the quarter ending March 20, 2015, to a high of 12.8% in the three months to June 20, 2012.

According to SCI data, the active population over 10 years totals 26.6 million while the employment to population ratio has risen to 40.6% from 38.9% in the previous quarter. A sectoral breakdown shows that services account for the largest share of jobs with 11.5 million workers, while agriculture is the smallest sector with 4.3 million.