Stocks Best Investment Option

Once again, the Iranian capital market beat all its rival markets, namely gold, forex and real estate, in terms of return on investment in the seven months of the current fiscal year (March 21-Oct. 22).

Tehran Stock Exchange’s benchmark index TEDPIX gained 8,994.4 or 11.6% during the seven months to close at 86,480.2.

TEDPIX ended Mehr, the seventh month of the year, hovering around a 45-month high.

The smaller over-the-counter Iran Fara Bourse was also growing for the period, although at a slower pace. IFX gained 62.91 points or 7.14% to end at 943.31.

TEDPIX was up 0.8% in Mehr, while IFX gave up 1.5%. Both experienced a rebound in the last week of the month, but IFB proved too feeble to cancel the losses incurred earlier in the month.

Out of the capital market’s 539 listed companies, 342 posted losses during the seven months while 197 registered growth. Forty-one companies’ shares were frozen for the period.

Permit Company and Arian Tooska had the highest return on investment with 1,172% and 720% respectively. Sugar production and industrial contracting were the two best performing industries with a growth of 68.5% and 50.8% respectively, according to Mabna Data Processing Company.

Credit Institute for Development and Arman Insurance were the two worst performers with -47.7% and -43.9% growth.

As for industries, oil and gas extraction, excluding exploration, and other mines (both of which only have two listed companies) had the lowest ROI with negative growths of -31.2% and -25.2% respectively.

> Housing Sector in Pre-Boom Phase

Housing was the economy’s second sector in terms of ROI during the seven months, Central Bank of Iran data show.

The average house price per square meter in the capital city, Tehran, was 4,760,000 rials by Oct. 22, indicating a 9.7% growth for the period.

The sector, which has just entered a pre-boom phase after a five-year recession, is not expected to register a notable fluctuation in home prices in the second half of the year, according to a board member of Bank Maskan, the agent bank of the housing sector.

“No increase in prices higher than the general inflation rate [of around 10%] is predicted,” Abolqasem Rahimi Anaraki also told ILNA.

According to Hesam Oqbaei, the head of Tehran Association of Realtors, a total of 9,382 housing sales were registered in Tehran up until Oct. 13, while the number of rental deals stood at 9,856, which does not indicate a significant change from the corresponding period of last year.

> Mehr Frenzy Boosts Forex, Gold

The forex market experienced significant fluctuations in Mehr, primarily for US dollar and euro, mostly due to traders’ rising concerns over looming political risks.

Although the seventh month’s market movements boosted forex ROI compared to its H1 performance, it remained below what TSE offered in returns.

USD gained 7% against rial in the seven-month period. It stood at 37,480 rials on March 21 and barely budged for the first four months. It started growing from the fifth month, however, and eventually reached 40,110 rials by the end of Mehr.

The greenback bagged its most significant gains against rial in Mehr by jumping 3.11% or 1,180 rials.

Similar to H1, euro was on a much sharper trajectory compared to USD. It was up 16.45% during the period under review to 47,870 rials. The Iranian private sector’s currency of choice had a hectic month in Mehr trading, too, as it rose 1.69% against rial.

Much of Iranian businesses’ transactions are done in euros, considering that US secondary sanctions on banking relations with Iran are still in place, barring banks from working with the country in dollars. This is while official government trade, such as crude export, is still done in USD.

The Mehr frenzy also affected gold prices and boosted their seven-month ROI. Starting the year at 11,790,000 rials, the Azadi Gold Coin rose 7.29% to 12,650,000 rials for the period. As expected, 5.15% of growth took place in Mehr, as traders looking for safe haven boosted prices by 620,000 during the month. This is while gold ROI barely reached 2% in H1.