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Iran Weekly Market Report
Economy, Business And Markets

Iran Weekly Market Report

Tehran Stock Exchange experienced minor daily changes during the second trading week of November.

The TSE All-Share Index, TEDPIX, ended the week at 63,056, which is 0.2% higher than the previous week. This is the second consecutive week that the index is performing positively.

Despite the minor weekly changes, the benchmark has started rising from its two-year low mark of 61,209, experienced on October 6, 2015. A number of analysts believe that the current low levels of volatility is a result of uncertainty regarding the Iranian economy and the potential implications of the removal of sanctions, global online currency trading portal FXstreet reported in its latest edition of Iran Weekly Market Report.

The index of the TSE’s 30 largest companies by market capitalization, the TSE 30 index, increased slightly by 0.16% as it closed at 2,714, after two consecutive weeks of recording negative performances. The index’s gain was due to the positive performances of Parsian Oil & Gas Development Co. (+2.7%) and Tamin Petroleum & Petrochemical Investment Co. (+6.3%).

The Average Daily Trade Volume of the market declined by 18% (approximately $5 million) this week, reaching $25 million. The shares with the highest traded values were Iran Khodro, Bank Mellat and Saderat Bank which had $13.6, $4.2 and $3.8 million worth of trades respectively.

The share price of Iran Khodro gained 4.2% to close at 2,048 rials (approximately 5.8 cents). Bank Mellat’s share price slipped by 0.9% to close at 1,972 rials (approximately 5.5 cents). On the other hand, Bank Saderat fell by 3.7% to close the week at 866 rials (approximately 2.4 cents).

Furthermore, the FX market witnessed different fluctuations by various foreign currencies against the Iranian rial. The official rate of the US dollar was set at 29,964 rials by the Central Bank of Iran, without any significant change compared to last week.

The free market USDIRR rate increased by 0.9% and reached 35,419 rials. The official EU­RIRR rate dropped by 1%, reaching 32,248 rials, while the free market rate of euro dropped by 0.9%, to close at 38,418 rials. The CBI announced the official rate of British Pound Sterling at 45,620 rials, which is 1% less than last week. The GBP-IRR free market rate ended up at 54,100, by gaining 0.37%.

In other developments, Iranian banks announced their agreement to cut annual deposit interest rates by 2% to 18% on Sunday. The reduction of the interest rate will become effective as of November 22, 2015. This is while many expected Iran’s Money and Credit Council to officially reduce interest rates due to a major drop in the rate of inflation in the past two years, now standing at 10.8%.

Nevertheless, the Money and Credit Council has not officially changed the interest rates yet. According to the head of public relations at CBI, the banks’ agreement is supported by CBI.

The official interest rate on annual rates, still standing at 20%, is considered as the maximum rate based on CBI’s statement. The banks are allowed to offer lower rates on deposits if they choose to do so. According to Abdolnasser Hemmati, the Money and Credit Council’s chairman, the final decision on reducing banking rates will be made during the next two weeks.

Also, the implementation of the government’s economic stimulus package, meant to push demand, was initiated this week. This plan supports local manufacturers that produce automobiles, agricultural machineries and durable household goods to sell their products by giving consumers credit lines for these purchases.

It is still too early to determine the effectiveness of the plan, however, Iran Khodro’s CEO announced that the company has already received applications to sell over 100,000 automobiles through the plan during the first five days of its implementation.

Iran Khodro had sold 96,513 and 119,627 cars in the first and second quarters of the current Iranian Year (started March 21). The company’s projections show that it expects to sell 510,392 cars by the end of the current year, which is 20% lower than last year. A number of experts predict that this stimulus plan may considerably increase car sales.

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