The Tehran Stock Exchange (TSE) sentiment was boosted, after the TEDPIX was lifted at Wednesday close by huge listed companies that are more likely to yield the highest dividends once sanctions on Iran nuclear program are lifted.
The overall index roared back after its one-day slump on Tuesday, with all indices settling in positive territory.
Among the lucrative bargains in the spotlight, Saderat Bank, Tejarat Bank, and Pars Khodr triggered investors’ enthusiasm, with the highest volume of trades in a descending order.
According to TSE data, the TSE’s benchmark gained to recover Tuesday’s incurred losses, after banks resumed keep issuing rosy outlook for their performance in coming months amid Iran nuclear deal.
The TEDPIX gained ground and notched up 524.8 points or 0.75 percent to get back on track. The first market index rose 479.9 points or 0.93 percent to stand at 52,027.4. The second market index pulled up 430.2 points or 0.31 percent to 139,312.2. The free float index was up 773.1 points or 0.95 percent to 82,371.6. The industry index ticked up 239.2 points or 0.42 percent to 57,543.9, and the blue-chip index jumped 35.9 points or 1.09 percent to 3,342.
More than 1.78 billion shares changed hands, valued at 3.21 trillion rials, with Saderat bank leading the volume of trades.
Saderat bank also registered the highest positive contribution to the TEDPIX, and Tejarat bank, and Pars Khodro with 39 and 6 points took the second and third place respectively.
As Iran’s high investment potential is grabbing the headlines, fund managers and individual investors across the globe are lining up to get into Iran’s untapped markets, with the equity market having been labeled as the most attractive one.
Interest in doing business in Iran started long before last week. Everyone from investors to banking institutions to auditors have been analyzing the possibilities. The country has large natural resources and, equally as important, a well-educated workforce, the CNN reported.
As fresh cash flows are heading to Iran, more and more local investors are mulling over bringing cash from parallel markets and tapping into Iran’s equity market as new record highs were recorded for the market cap at the TSE within the past 10 consecutive trading days.
IPS for Foreign Investors
Foreign portfolio managers and investors can track their portfolios and trades within the last trading day through a newly unveiled website designed by the Central Securities Depository of Iran (CSDI), the CSDI reported.
After Iran and the P5+1 reached a preliminary comprehensive agreement, amid speculations about the inflow of foreign investors, the CSDI revealed http://enp.csdiran.com aimed at providing adequate information to foreign investors at Iran’s equity market.
Respective investors can access portfolio management tools in the website, which helps them analyze their portfolios to hedge their bets.
IPO at Farabourse
The second Initial Public Offering in Iran’s stock markets was recorded for Hormozgan Steel Company at Iran Farabourse or over-the-counter (OTC) on Wednesday trading, Iran Fara Bourse public relations reported.
According to the report, each share of the HSC was priced at 1,200 rials in secondary market at IFB. The HSC has offered 5 percent of its company’s shares in the IFB’s first IPO since the beginning of the new Iranian year, which started March 21.
Close to 750 million shares of the HSC were offered on Wednesday, of which 350 million shares were public during price discovering, and the rest of stakes were allocated to online traders. The HSC, with a market cap of almost $46 million, belongs to Mobarakeh Steel Company.
“The upcoming offerings will be offered in blocks”, Bourspress quoted Amir Hossein Naderi, deputy head of the MSC as saying.
Recently, Mohammad Fetanatfard, head of the Securities and Exchange Organization declared that more companies will embark on filing for IPO in the coming days.
UK Firm Plans Iran Investment Fund
UK investors are preparing to re-enter Iran as the prospective nuclear agreement between the West and Tehran, announced last week, begins to bear fruit, Financial Times reported.
On Tuesday, Charlemagne Capital, a UK asset manager focused on emerging markets, and Turquoise Partners, a Tehran-based investment group, announced plans to offer international investors exposure to Iranian equities in a deal that is likely to be one of many more over the coming weeks and months.
Dominic Bokor-Ingram, a portfolio adviser at Charlemagne, said: “I doubt you will be able to get a seat on a flight to Tehran in the next week or two as business people will be flocking to the Iranian capital. The nuclear deal will open the floodgates to international investment in Iran.”
After an agreement that is being hailed as the most promising thaw with the US since 1979, Bokor-Ingram insisted that exposure to Iran was one of the best opportunities for investors because of its highly diversified economy and an educated population. Unlike other Middle Eastern countries, it is not overly reliant on oil and gas, he added.
Charlemagne and Turquoise will launch their first fund in the next few weeks. It will be a general equity fund aimed at international investors, with $70m under management initially. The groups have plans to grow it to more than $200m in the short term.
They also plan to set up funds in different sectors, such as oil and gas, banks and retail, once the general fund has been established.
However, some other investors warned against over-optimism. One emerging market fund manager at a London-listed group said: “I don’t want to be a killjoy, but let’s wait and see if a final deal is reached.”
If a final nuclear deal, which is due to be agreed by June 30, is signed, then Iran’s equity markets should enjoy a significant boost as sanctions that have stifled trade and investment will be lifted.
Optimism that international trade sanctions on Iran will be lifted has already resulted in dozens of fund managers visiting the country and carrying out due diligence on Iranian companies in the past 12 months.
The Iranian stock market is overwhelmingly a domestic market, but Bokor-Ingram said that this would change swiftly as more and more international groups were expected to launch funds and joint ventures in the country.
“Iran is one of the more developed markets in the Middle East available to emerging market investors, which makes it very attractive,” Bokor-Ingram said.
Charlemagne is an emerging market asset management group based in London with about $2.5b under management. Turquoise is a financial services group with more than 70 employees in Tehran.
