*Note: Data are based on the Iranian calendar year where each month ends approximately on 20th day of the corresponding month in the Western calendar year. Month's numbers for these data are converted to the closest western month only for convenience


Inflation and Exchange Rate

Since the Statistical Center of Iran has made the inflation calculation based on the base year of 2016 in the latest report, the present attempt has been made based on the information of CBI.

According to CBI, the inflation reached its highest in December 2017 driven by foreign currency appreciation and house price rise. Keeping the inflation within one-digit range seems tricky while the inflation rate in the coming months is expected to exceed 10% and even step back up to 15%.


Interest Rate

Over the past two months, the yield to maturity of TSE-traded T-bills has been settled at around 16% following the recorded minimum of 13.3%. The Iranian Ministry of Economic Affairs and Finance and the central bank seek to prevent the banks and other financial entities such as fixed income funds from going beyond the approved interest rates. These governmental entities are expected to face challenges in maintaining the current situation on account of approaching the end of the current year, higher cash needed by individual and institutional persons, and boom of parallel markets including housing sector, foreign currency exchange, and stock and gold coin markets.

Accordingly, interest rate cut is very less probable and the rate is expected even to increase by the end of the current year.


Real Estate

Following repeated periods of the recorded house price at lower rates than the inflation, the growth rate of house price during the recent two months has been higher than the inflation rate compared to the similar period last year. As stated earlier, the price in housing sector is less likely to jump in case of a controlled inflation rate. Thus, inflation rate is the most effective factor on the house price forecast.



Foreign Trade

Although the stability in foreign currency rates in 2017 H1 caused the imports to increase and the imports were expected to slow down following the foreign currency gain in H2, no such situation was occurred by December 2017. The statistics of the months ahead would shed more light on the impact of foreign currency appreciation on import trend.

Also, more exports were expected due to global price rises and the USD gain. However, the reduced gains of petrochemical products seems to be the key factor against increase of exports which is weird given the increase of global prices and production of the petrochemical companies in the current year. The reason needs to be more deeply examined associated with the petrochemical exports.



TEDPIX has been on the upswing in recent months driven by a continuous positive trend of fundamental variables effective on the equity market including increase of global prices, IR Rial depreciation and deposit interest rate cut. The rising trend together with optimisms and new contribution by a number of fixed income funds (following approval of SEO) led the index to go up by 7.6% to its 22-month high rate of return.     

Systematic political risks (including JCPOA extension), rise of prices, and expected 9-month reports are predicted to make short-term continuous TEDPIX growth problematic. The TSE Overall Index is expected to go up slightly in the wake of release of 9-month reports, settlement of political risks, and stability in global prices as well as the deposit interest rates.


Assets' Returns (1 Year, Trailing)




About Mofid

Mofid Securities is a leading brokerage and investment advisory firm in Iran. As the largest full-service broker, it provides domestic and international clients with a range of trading and investment services including online stock trading, mutual funds, ETFs, and managed accounts as well as market reports and commentaries. 
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