|Iran Macroeconomic Indicators|
|Publication Date: December 16, 2017|
*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
In the second straight month, the inflation stood at over 1% showing a small uncontrolled move. The foreign currency rate remained robust leading the point-to-point inflation to rise.
As referred to in the similar report last month, the annual inflation would adopt an upward move if the monetary policy and foreign currency rate are left unwatched by the government.
The interest rate of the T-bills recorded the minimum of 13.3% in November 2017, indicating an upward trend. Given issuance of certificates of deposit (CD) by Bank Melli Iran and Bank Mellat as well as current state of monetary supply and demand, the rate of T-bills is expected to stay at least beyond 15%.
Should CBI and the government fail to control the inflation trend, the investors are expected to leave the T—bills market which may cause the interest rate of T-bills to rise up to maturity and the investors to approach the currency and gold coin markets. This was happened last month resulting in a bubble in the gold coin market.
November 2017 saw a continued growth in trades and prices of real estates. The house price approached the inflation rate over the recent months – after being lower than that in the past two years. If the monetary policies go uncontrolled by the government, the price in real estate would go along with the inflation. A price growth in the sector beyond the inflation rate is currently unexpected.
The trade balance has experienced a deficit over 8 months through November 2017. However, the global price rise in gas condensate, petrochemical products and expected growth in foreign currency rate in the months ahead are predicted to cause exports to go up gradually. This may make the imports to retreat on the other side.
On a monthly growth of 2.7%, TEDPIX hit 88774.6 points passing beyond the record of 89500 points last seen in January 2014. Stability in global prices together with decline of the bank interest rate and slight growth of the foreign currencies as the most effective factors on the Iranian capital market have caused the Overall Index to advance as its trend of the last months. It is said that the rise of the index over the past months came mostly from the industries and companies which have been highly affected by global prices and foreign currency sales. The aforesaid factors have made chemicals and petroleum products to strengthen within the current month. It is worth noting that price liberalization for a number of products of refineries together with oil price rise have played an effective role in growth of petroleum products sector.
Oil price drop and recession in the construction sector along with the restrictive policies of the government and CBI have caused the domestic industries to take an inconvenient trend of growth over the recent years. Still, the continued descending trend of the bank interest rate together with the inflation rise, causing the domestic goods to go up in price, as well as moving the construction sector to go out of recession may make the domestic industries to affect positively the equity market to soar in the coming months.
Assets' Returns (1 Year, Trailing)
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