Trade at the Iran Mercantile Exchange (IME) reached 6,937 trillion rials ($18.1 billion) in the first nine months of the calendar year to November 22.
This was an all-time high and above the previous fiscal year (ended March 2022), SENA news agency said.
IME is a multi-commodity market founded in 2006 for farm, industrial and petrochemical products in the spot and futures markets.
The jump in spot market deals was the main driver of growth. It hosted commodities worth 6,457 trillion rials ($16.7 billion). An estimated 87.5 million tons of goods and more than 11,000 vehicles were traded in this market during the period.
Noticeable growth in the spot market was partly due to cement trade after factories were obliged by the Industries Ministry to sell only via the IME.
Commodity trade on the industrial floor reached 71.8 million tons worth 3,912 trillion rials ($10.1 billion). On the petrochemical and petroleum floor 14.5 million tons worth 2,397 trillion rials ($6.6 billion) were traded.
Derivatives Down
Unlike the spot market, trade in derivatives declined. An estimated 2.8 million derivative contracts worth 116 trillion rials ($301 million) changed hands in the period, down 47% in volume but up 1% in value on the same period a year ago.
Derivatives included 2.06 million futures worth 114 trillion rials and 651,000 options contracts at 1.16 trillion rials.
The IME hosted 10.33 million standard salaf contracts. A salaf contract is an Islamic contract similar to futures with the difference being that the total price should be paid in advance.
A total of 630 million commodity-based certificates of deposit worth 180 trillion rials were sold in the period.
Auto Sales
Auto trade in the exchange amounted to 17,038 vehicles in nine months with Peugeot 207s topping the list at 5,200 vehicles. In the same period 2,970 Tara cars, produced/assembled by Sipa were sold followed by 2,064 Shahin by the same company, 1,228 Fidelity sedans manufactured/assembled by Bahman Motor were sold along with 3,605 Haima of Iran Khodro and Dignity brands.
Bahman Motors also sold 1,098 Kara pickups, a popular vehicle in Iran originally produced by Mazda.
Data shows that 374 Lamari Eamas of Arian Pars Motor, 69 KMC T8s by Kerman Motor and 68 JAC S5s by Kerman Motor were sold since March.
Heavy-duty vehicles, FAW and EM Power brands from China assembled by Bahman Motors and Siba Motor in Iran, were also popular. A total 207 Empower puller trucks by Bahman Diesel and 35 FAW puller trucks by Siba Motor were traded.
Auto sale was temporarily suspended by the Industries Ministry in late May. It argued that the practice was incompatible with rules to regulate the chaotic auto market and added further to volatility. In July the ministry backtracked and the High Council of Securities and Exchange agreed to offering selected brands.
As per procedures, only cars not subject to pricing mechanism by the government are offered at the IME.
Market Feedback
Market observers say offering some cars in the stock market is a positive measure that paves the way for transparency in the market, cuts middlemen from the deals, reduces the pernicious impact of government-imposed pricing policy on the industry, and safeguards the rights and benefits of consumers, producers and shareholders.
Hadi Mousavi, investment affairs manager at Omid Analyzer Company, said that offering cars in the bourse is one of the best, if not “the best” achievements of the Securities and exchange Organization (SEO).
“The wide gap between factory and market prices of cars in Iran has indeed led to rent-seeking and corruption while the government-imposed price policy has made a bad situation worse. This plus other damaging factors have hurt the auto industry, caused imbalances in the market and disrupted the demand-supply balance.”
Mousavi said that domestically-made cars are sold at low prices, and this incurs losses on shareholders of auto manufacturers, adding that government regulatory capacity can help only at critical junctures and for limited periods, not when it drags on over years and decades.
