TEDPIX Ends Week at 42-Month High

Tehran Stock Exchange’s main index TEDPIX gained 313 points or 0.4% during the week that ended on August 2 to end at a 42-month high of 81,579.

TEDPIX’s leap to a new record came on Wednesday, as the index gathered 265 points and moved past 81,537, its sticky 16-month high reached in late July.

Trading at Iran’s stock markets starts on Saturday and ends on Wednesday. The markets were closed on Saturday due to President Hassan Rouhani’s swearing-in ceremony.

The main index of the smaller over-the-counter exchange Iran Fara Bourse, IFX, lost 7.2 points or 0.8% during the week to end at 924.

Fara Bourse’s seesaw trend so far this month has prevented IFX from hitting new records. The closest IFX came to its May 3 high of 936 was on August 1, lacking 4 points to break above its all-time high. This week was no better for the benchmark, as it lost most of its gains.

The main reason behind TEDPIX’s Wednesday leap and new high can be sought in improved metal prices in both global markets and Iran Mercantile Exchange and subsequently producers’ growth at TSE.

> Metals Drive Markets

Metal prices maintained their growing trend during the week to reach new highs.

Copper futures trading on the Comex market in New York advanced on Tuesday after a rebound in imports by top consumer China. Copper for delivery in September jumped to a high of $6,494 per ton in lunchtime trade, up more than 1% on Friday’s close to the highest since mid-December 2014.

Copper’s 2017 gains to date top 16% and the red metal has recovered more than 50% in value after falling to six-year lows in January last year, according to Mining.com.

Aluminum has been on a run this year, mostly due to China ramping up efforts to curtail illegal or polluting capacity. The industrial giant has cracked down on Shandong Province, China’s aluminum production hub, calling for the closure of 3.21 million tons of illegal capacity by in months.

An incident at Oman Aluminum Processing Industries LLC on August 4 disrupted the plant’s normal operations and consequently the region’s supply of the material.

Aluminum is now trading above $2,000 a ton for the first time in nearly three years.

The surge in Chinese steel prices, alongside the bullish sentiment of investors, further boosted zinc prices during the week, bringing them up to a 10-year high of about $3,000 per ton, the Persian daily Donya-e-Eqtesad reported.

Zinc is influenced by steel price since its biggest use is for galvanizing steel.

As for steel, things are looking good with China working to tackle overcapacity in the sector. Shutting down plants, boosting imports, improving economic indicators and growth in investment in the construction sector have all buoyed prices worldwide.

Accordingly, a good chunk of Wednesday trade was allocated to metal producers, including Mobarakeh Steel Company, Khouzestan Steel Company, National Iranian Copper Industries Company and Mines and Metals Development. The companies’ products were doing good at Iran Mercantile Exchange all through the week and eventually affected their shares at TSE.

> Weekly Trade in Detail

Over 2.58 billion shares valued at $206.15 million were traded on TSE last week. The number of traded shares and trade value dropped by 28% and 19.4% compared to the previous week.

TSE’s First Market Index gained 236 points or 0.41% to end at 87,173.3.

The Second Market Index rose by 596 points or 0.34% to close at 177,753.2.

At IFB, more than 1.02 billion securities valued at $120.7 million were traded. The number of traded shares rose by 4% while trade value dropped by 35% compared to the previous week.

IFB’s market cap lost $141.65 million or 0.5% to reach $27.97 billion.

Its First Market witnessed the trading of 88 million securities valued at $3.86 million, indicating a 57% and 54% drop in the number of traded securities and trade value respectively.

About 484 million securities valued at $29.42 million were traded in the Second Market, with the number of traded securities and trade value rising by 36% and 2% week-on-week respectively.

> Second IPO of the Year

The second initial public offering of this fiscal year (started March 21) took place on Tuesday for the telecoms company MobinOne Kish.

MobinOne was listed on Iran Fara Bourse’s second market back in October 2016 as its 146th company, but its IPO and entry into trading was delayed. The board meeting held on Sunday decided to make 10% of the company’s shares public on the over-the-counter market.

Investors greeted the IPO warmly, as over 82,000 traders signed up for the book building process. By the end of IPO, each share of “MOBZ” was priced at 3,470 rials.

The company has forecasted a 553-rial earning per each share for the current fiscal year. It has been able to realize 27% of it for the year’s first quarter (March 21-June 21). Its P/E ratio currently stands at 6.51.