Iran Weekly Market Report - May 29, 2017

Firouzeh Asia Brokerage Team Firouzeh Asia Brokerage Company

Tehran Stock Exchange

Tehran stocks gained 1% in the trading week following Iran’s presidential election with the TSE All-Share Index closing at 81,146. Ceramics & Tiles (+7.9%) was the top performing sector of the week which saw the majority of sectors closing in positive territory. Gains were seen across Ceramics & Tiles, led by Takceram Tile Mfg. Co. (TKSM +18.1%). Promising monthly sales reports by listed companies triggered demand for the sector. Oil Products (-0.6%) was the biggest faller among major sectors, mostly due to weak performances by Bandar Abbas Oil Refining Co. (PNBA -1.8%) and Esfahan Oil Refining Co. (PNES -2.0%).

The TSE30 index of the thirty largest companies by market capitalization rose 0.5% to 3,145. SAIPA Group (SIPA +3.6%) gained the most while Tejarat Bank (BTEJ -2.1%) was the weakest share in the top 30s.

This week the Average Daily Trade Volume (ADTV) added 64% to USD 94 million. The most traded stock was Barez Industrial Group (BARZ +4.9%) with volume of USD 8.5 million, followed by SAIPA Group (SIPA +3.6%) and Iranian Investment Petrochemical Group (IPTR +5.3%) which both saw USD 7.7 million in trades.

Iran Fara Bourse

The overall index of the Iran Fara Bourse closed at 926, up 1.2% from the previous week. Stronger demand for equities saw its ADTV rise to USD 45 million from USD 31 million. Stocks overtook debt securities as the most traded instruments with volumes of USD 160 million for the week.

Foreign Exchange Market

The Central Bank of Iran kept the official US dollar rate unchanged at IRR 32,422. On the free market the dollar fell 0.5% to IRR 37,432. The euro’s official rate was quoted by the CBI up 0.8% at IRR 36,476 but it fell on the free market by 1.9% to IRR 41,506. The CBI added 0.1% to the official rate of the British pound at IRR 42,117, while its free market quote dropped 1.1% to IRR 48,450.

Economic Developments

Iran’s crude steel production grew 11% to 18.4 million tonnes in the Iranian calendar year ending March 19, 2017, according to the Iran Steel Manufacturing Association. The total of manufactured steel products rose 4% to 18.1 million tonnes. Hot rolled steel coil remained the main product although output was unchanged at 6.9 million tonnes. Biggest production growth was seen in coated steel plates which increased 20% to 1.1 million tonnes. Iran’s annual crude steel production capacity is currently 27 million tonnes, but the industry’s aim is to expand capacity to 55 million tonnes over the next eight years. Reaching this target requires an estimated investment of USD 30 billion.

Author

Firouzeh Asia Brokerage Team

Firouzeh Asia Brokerage Company

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.