Trade at the Iran Mercantile Exchange (IME) reached 5,886.2 trillion rials ($16.5 billion) in the first eight months of the calendar year to November 22.
Overall trade was 48% higher on the same period last year, according to IME data.
IME is a commodities exchange in Tehran founded in 2006 to sell farm, industrial and petrochemical products in the spot and futures markets.
The jump in spot market deals was the main driver of growth. It hosted commodities worth 5,552 trillion rials ($15.55 billion), up 47% year-over-year.
An estimated 76.21 million tons of goods and more than 4,000 vehicles were traded in the spot market during the period. Compared to the same period last year, the deals jumped 77% in volume.
Noticeable growth in the spot market was partly due to cement trade after factories were obliged by the Industries Ministry to sell only via the IME.
Commodity trade on the mineral and industrial floor increased 109% in volume and 58% in value y/y. Trade via this floor in the eight months weighed 63.2 million tons worth 3,316 trillion rials ($9.34 billion).
On the petrochemical floor, 4.13 million tons worth 1,171 trillion rials ($3.29 billion) were sold while the petroleum side handled 8.26 million tons worth 906 trillion rials ($2.55b).
Derivatives Down
Unlike the spot market, trade in derivatives declined. An estimated 2.52 million derivative contracts worth 105.5 trillion rials ($297 million) changed hands in the period, down 48% in volume but up 5% in value on the same period a year ago.
Derivative instruments included 1.88million futures worth 104 trillion rials and 646,000 options contracts at 1.14 trillion rials.
The IME also hosted 1.39 million standard salaf contracts. A salaf contract is an Islamic contract similar to futures with the difference being that the total price should be paid in advance.
A total of 579 million commodity-based certificates of deposit worth 150.47 trillion rials were sold in the period.
Auto Sales
Auto sale in the exchange amounted to 4,080 vehicles during the eight months worth 33.61 trillion rials ($64 million).
Peugeot 207s accounted for nearly a quarter of the vehicles. During the period 742 Fidelity brands manufactured/assembled by Bahman Motor were sold, followed by 731 Haima S7s of Iran Khodro and 594 Dignity brands offered by Bahman Motor.
Bahman Motors also sold 456 Kara pickups, a popular vehicle in Iran originally produced by Mazda.
Data shows that 200 Lamari Eamas of Arian Pars Motor, 69 KMC T8s by Kerman Motor, 68 JAC S5s by Kerman Motor and 64 Shahins by SAIPA were sold since the beginning of the year.
Heavy-duty vehicles, FAW and EM Power brands from China assembled by Bahman Motors and Siba Motor in Iran, were also welcomed by buyers. A total of 121 Empower puller trucks by Bahman Diesel and 35 FAW puller trucks by Siba Motor were sold.
Auto sale was temporarily suspended by the Industries Ministry in late May. It argued that the practice was incompatible with rules to regulate the chaotic auto market and added further to volatility. In July the ministry backtracked and the High Council of Securities and Exchange agreed to offering selected brands.
As per current procedures, only cars not subject to pricing mechanism by the government are offered at the IME.
Market Feedback
Experts say offering some cars in the stock market, is a positive measure that paves the way for transparency in the market, cuts middlemen from the deals, reduces the pernicious impact of government-imposed pricing policy on the automotive industry, and safeguards the rights and benefits of consumers, producers and shareholders.
Hadi Mousavi, investment affairs manager at Omid Analyzer Company, said that offering cars in the stock market has been one of the best, if not “the best” achievements of the Securities and exchange Organization (SEO) in collaborating with other sectors.
“The wide gap between factory and market prices of cars in Iran has indeed led to rent-seeking and corruption while the government-imposed price policy has made a bad situation worse. This plus other damaging factors have hurt the auto industry, caused imbalances in the market and disrupted the demand-supply balance.”
Mousavi said that domestically-made cars are sold at low prices, and this incurs losses on shareholders of auto manufacturers, adding that the government’s regulatory capacity can help only at critical junctures and for limited periods, not when it drags on over years and decades.
