Economy, Business And Markets

Iran Weekly Market Report

Iran Weekly Market ReportIran Weekly Market Report

Tehran Stock Exchange experienced slight changes during the week, which had fewer trading days due to a public holiday on Saturday.

The TSE All-Share Index recorded a 0.4% decline compared to last week as it closed at 62,147, recording its lowest measure in two months. The index had reached 63,056 on November 11, but has been experiencing negative declines ever since, recording a 1.4% drop in five weeks.

Some analysts believe investors are anticipating signs of relief in the economy, as a result of the removal of sanctions imposed on Iran. This is while a majority of listed companies have been experiencing difficulties in the current financial year, mostly because of the weak prices in global commodity markets, the global online currency trading portal FXstreet reported in its latest edition of Iran Weekly Market Report.

According to technical analysis, TEDPIX has already broken down its 50-day exponential moving average toward lower measures, demonstrating the chance of revisiting the support level existing at 61,500. However, the index’s volatility in recent weeks has been deeply low, reflecting investors’ hesitation for lower prices.

Though indications do not seem to be strong enough to take down the index, there is also no positive signal that the market may increase during the next couple of weeks. TEDPIX needs to surpass the 63,000 level to show growth potential once again.

Likewise, the TSE30 index, which covers the 30 largest companies by market capitalization, recorded a negative performance this week. The TSE 30 index closed at 2,615, recording a 0.26% drop compared to the previous week. Similarly, the TSE 30 has been in a negative trend during the previous five weeks, losing almost 100 points or 3.67%.

However, Bank Saderat and Chadormalu Mining and Industrial Co. recorded slight increases this week, in contrast with the majority of top 30 stocks. Chadormalu added 0.53% as it closed at 2,362 rials (6.5 cents), while Bank Saderat closed at 869 rials (2.4 cents) gaining 1% on a weekly basis.

Moreover, the Average Daily Trade Volume of the market reached $18.4 million, which is 16% lower than previous week. The shares with the highest trade values pertained to Bank Mellat, Sakht Ajand and Azarab Industrial Company, which recorded 7.9, 4.3 and 3.6 million worth of trade respectively.

The share price of Bank Mellat closed at 1,930 rials (5.3 cents), 0.77% higher than the previous week. However, Sakht Ajand (construction investment company), slipped by 0.3%, reaching 6,012 rials (16.6 cents), while Azarab Industrial Company closed at 3,224 rials (8.9 cents), improving 3.6% on a weekly basis.

  Iran Fara Bourse

IFB’s all-share index gained 2.7 points or 0.4% compared to the previous trading week to stop at 685.

According to IFB, more than 305 million securities were traded in 25,000 transactions valued at $97.8 million. Trade volume and value posted a 38% and 40% decline compared to the previous week. Moreover, IFB’s market cap filed a 1% increase to end at $22.9 billion.

The First Market registered the trading of 37 million securities valued at $2.7 million to file a 60% and 77% decline in volume and value respectively compared to the previous week. The Second Market recorded the transaction of 143 million shares worth $10.8 million to file a 5% and 56% slide in weekly trade volume and value respectively.

Banks and credit institutions with an 18% share of the market transactions topped the charts among weekly gainers, followed by the oil and auto manufacturing sector with 12% and 10% market share respectively.

  Currency Market

The FX market recorded a slower pace of growth by foreign currencies. The Central Bank of Iran set the official rate of the US dollar at 30,120 rials, recording a minor weekly change of +0.05%.

However, the free market dollar-rial rate slipped by 0.02%, reaching 36,208. The official rate of the euro also declined by 0.5%, reaching 32,688 rials, while its free market rate grew by 1.18% to close at 40,021 rials.

The free market rate of the British pound slipped by 0.64% to 54,600 rials, similar to the official rate of pound-rial set at 45,023, 0.38% lower than last week.

  Sanctions Removal on Horizon

As expected, the International Atomic Energy Agency’s board of governors closed the so-called possible military dimensions dossier of Iran’s nuclear program on December 15, paving the way for the full implementation of Iran’s nuclear accord, reached in July with the EU3+3.

According to the nuclear deal, termed the Joint Comprehensive Plan of Action, the International Atomic Energy Agency had to examine Iran’s past nuclear activities and present its report to the board.

At the meeting held on Tuesday, the board of governors unanimously agreed to close Iran’s nuclear dossier and end the agency’s obligation on investigating past Iranian nuclear activities.

As such, a major step has been taken for the implementation of JCPOA and Iran will complete its obligations under the deal in the next two to three weeks. Once the IAEA has verified Iran’s compliance with the terms stated in the JCPOA, United Nations, European Union and nuclear-related US sanctions on Iran will simultaneously be removed.

During a televised interview, Iran’s President Hassan Rouhani announced that Iran expects the sanctions to be removed in January.

Also, IAEA Director General Yukiya Amano told Reuters that if everything goes well, the removal of sanctions can be implemented by the end of January.

  CBI Cuts Reserve Ratio

In other developments, according to the government’s economic stimulus plan, the Central Bank of Iran has started the implementation of reducing the required reserve ratio for disciplined banks.

According to an earlier decision of Iran’s Money & Credit Council, the reserve ratio can be set at 10-13% depending on the banks’ state. The disciplined banks that follow CBI’s regulations can enjoy the lower rates.

Factors, which distinguish the standing of the banks, are based on their cooperation with CBI monitors, adherence to disclosure and transparency policies, providing proper reports for credit and regulatory bodies of the CBI and also obeying the maximum interest rates on deposits.

The central bank reviews the banks’ performances every three months to determine their reserve ratio.

According to Iran’s monetary and banking law, the CBI can set the reserve ratio from 10-30%, depending on the economic state of the country.