TEDPIX Limps, IFX Jumps 2.1% in Trading Week

Tehran Stock Exchange’s main index TEDPIX gained 109 points or 0.1% during the fourth week of the month that ended on Nov. 15 to close at 88,005.9.

The benchmark index is currently hovering around its 45-month high and will need about 1,500 points to break past its all-time high of 89,500 reached on Jan. 5, 2014.

Analysts believe the companies’ improving performance can potentially drive the market to new heights, but looming political risks are retarding the process. This is reflected in TSE’s limited fluctuation for the past two weeks and insignificant trade value.

The main index of the smaller over-the-counter exchange Iran Fara Bourse IFX added 20.2 points or 2.1% during the week to end at 997. IFX is at its all-time high.

Trading at Iran’s stock market starts on Saturday and ends on Wednesday.

Over 3.79 billion shares valued at $192.2 million were traded on TSE last week. The number of traded shares and trade value dropped by 7% and 5.9% respectively.

TSE’s First Market Index gained 84 points or 0.13% to end at 61,565.6. The Second Market Index rose by 193 points or 0.10% to close at 192,418.

At IFB, more than 1.3 billion securities valued at $699.9 million were traded. The number of traded shares rose by 1% while trade value surged 239%.

Its First Market witnessed the trading of 335 million securities valued at $4.4 million, down 23% in the number of shares traded and up 4% in trade value. About 335 million securities valued at $27.2 million were traded in the Second Market, dropping 23% in the number of shares traded and growing by 2% in trade value.

Over 25 million debt securities valued at $613.7 million were also traded at IFB, surging 390% and 408% in number of bonds traded and their value respectively.

 Political Risks on Radar

The 2015 nuclear agreement reached between Iran and six major world powers is currently at risk, with the US Congress set to decide whether to reimpose economic sanctions on Iran, which had been lifted in exchange for limiting its nuclear activity.

The European Union, on the other hand, has been lobbying hard to preserve the nuclear accord, considering that European businesses were the main winners of Iran’s reintegration into the global economy.

Yet things are getting more complicated. Last week, French President Emmanuel Macron mooted the possibility of fresh sanctions, saying he was “very concerned” about Iran’s missile program following the firing of a missile from Yemen into Saudi Arabia, Reuters reported.

Tehran dismissed Macron’s remarks, saying its missile program was solely defensive and not linked to the nuclear pact. It has also denied having supplied missiles to Houthis in Yemen.

Total CEO Patrick Pouyanné has also recently told CCN that his company might revisit the 2 billion gas deal with Iran if the “legal framework” changes.

“Either we can do the deal legally if there is a legal framework . . . If we cannot do that for legal reasons, because of [a] change of [the] regime of sanctions, then we have to revisit it,” he said.

 Massive Earthquake Revives Cement Stocks

A 7.3-magnitude earthquake shook the western province of Kermanshah and the regions bordering Iraq on Sunday night.

Hundreds were killed and thousands were injured in Iran, IRNA reported.

Cement stocks started growing after a near three-month freefall on Sunday, picking up on the prospect of reconstruction in the region. Plants located in western Iran were the investors’ main targets.

TSE’s cement index, which tracks 31 producers’ stocks, gained a total of 17.7 points or 2.78% to close the week at 653.5.

The government plans to allocate 6.5 trillion rials ($164 million) in loans and 2.8 trillion rials ($70 million) as grants to households in the province, according to Government Spokesman Mohammad Baqer Nobakht.

Battling overcapacity, subdued local demand and shrinking export markets, cement producers are far from their 2014 heyday before state-sponsored construction projects slowed down due to lack of funding.

Production and exports have consistently dropped for the past few years. Latest statistics indicate that clinker and cement production fell 2.8% and 3.04% to 29.5 and 28.2 million tons respectively during the first half of the current Iranian year (March 21-Sept. 22) year-on-year. The downturn in clinker shipments is insignificant, yet cement shipments have dropped more than 22% YOY to 3.05 million tons.