*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. (The current year of the Iranian calendar starts from March 21).


 

Inflation and Exchange Rate

Consumer goods and services price index experienced a jump of 3.4% in July and pushed Y-O-Y inflation to grow by 18%. The Y-O-Y inflation seems would reach the end of the year by over 30%. Also, 10% growth of the producer inflation would send the consumer inflation higher.

As expected, the government has not been successful in control of prices and has agreed with the foreign currency secondary market of which the impact is projected to show off in inflation of August.


 

Interest Rate

The bullish capital market and price drivers in parallel markets have increased redemption of the fixed income bonds and conducted the cash out of the bond market. A simultaneous issue of nearly 3,000 billion IRR new bonds by public and private sectors triggered the interest rate to move up. No adjust in the interest rate is expected as long as cut in inflation amid the expected rate of inflation, liquidity shortage of banks, and movement of cash out of banks.


 

Real Estate

In spite of reduced real estate transactions in recent two months, prices are still on the rise. It seems we approach end of the ascending trend of prices in housing amid relatively stable parallel markets. Prices in housing sector are expected to go stable in the second half of the year. An important note here is the comparison which the sellers make between this market and other ones like foreign currency and gold coin. The significant difference is immovability of real estate that makes us to forecast less inflation for housing sector compared to the other tradable goods including dollar and gold coin. Expectations of the sellers in real estate are projected to adjust.

* Based on CBI’s latest report on Tehran housing sector.


 

Foreign Trade

July saw less foreign trade following the government’s decision on ban of export dollar sales by the Iranian exporters at market exchange rate, and no order registration by importers. Following run of foreign currency secondary market, we expect to witness increased foreign trade in August esp. in export. Also, the trade balance in 7 months ahead is expected to move up compared to the similar period last year.


 

Equities

Ban of export dollar sales by exporters at market exchange rate together with approaching U.S. sanctions caused the capital market to go in recession in July. However, given reconsideration of the government regarding sales of export dollars of the exporters at prices close to the market exchange rates it is predicted that the exporters would gain much as the stocks prices and the Overall Index are expected to increase.


 

Assets' Returns (1 Year, Trailing)


 

GDP


 

Abbreviation

B USD: Billions of U.S. Dollar

CBI: Central Bank of Iran

M IRR: Millions of IR Rial

 

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. 
Mofid publishes this newsletter, Iran Market Reporter (IMR), in order to keep its readers updated on the latest news and events of Iranian capital market, especially Tehran Stock Exchange (TSE), as well as valuable information for individual and institutional investors.
Iran Market Reporter (IMR) is distributed exclusively via email amongst Iranian analysts and potential investors who have worked closely or have been in contact with Mofid Securities Company. Subscription to this newsletter is by online request only.

 

DISCLAIMER

This material is for information purposes only and does not constitute an offer to sell nor a solicitation of an offer to buy any specific securities.

All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, MOFID SECURITIES COMPANY accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All information is provided without warranty, and MOFID SECURITIES COMPANY makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained.

This publication does not provide individually tailored investment advice and may not match the financial circumstances of some of its recipients. The securities discussed in this publication may not be suitable for all investors. The value of an investment can go down as well as up. Past performance is no guarantee of future success.

 

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