Weekly Market Report Week ended 01th March, 2017 Saturday ... market report 1th March 2017.pdf · Weekly Market Report Week ended 01th March, 2017 Saturday thru Wednesday inclusive

Weekly Market Report

Week ended 01th March, 2017

Saturday thru Wednesday inclusive

Contents

1. The status of our Mutual Fund 1

2. Market Report 3

The Markets and the reason(s) for their changes 3

Market movements since the lifting of the sanctions 8

Commodity Market 9

Worldwide prices of oil & gas, major currencies 10

Industry Index Information 11

precious metals and basic metals 12

3. Detailed Market Information 13

4. Economic News 15

The status of our Mutual Fund

1st Dana Mutual Fund

Three months ended 01th March, 2017

Three Monthly Ranking: 35th (see the chart below):

The percentage of each industry in Dana Fund

1

Chemicals10% Oil

Products11%

Base Metals18%

holdings11%

Pharmaceuticals11%

Foods excluding Sugar

0%

Engineering Services

11%

Telecommunication14%

utilities0% Mining of

metal ores14%

2,600,000

2,700,000

2,800,000

2,900,000

3,000,000

3,100,000

3,200,000

3,300,000

20

16

.12

.01

20

16

.12

.05

20

16

.12

.09

20

16

.12

.13

20

16

.12

.17

20

16

.12

.21

20

16

.12

.25

20

16

.12

.29

20

17

.01

.02

20

17

.01

.06

20

17

.01

.10

20

17

.01

.14

20

17

.01

.18

20

17

.01

.22

20

17

.01

.26

20

17

.01

.30

20

17

.02

.03

20

17

.02

.07

20

17

.02

.11

20

17

.02

.15

20

17

.02

.19

20

17

.02

.23

20

17

.02

.27

Comments on the performance of our Mutual Fund

We would like to inform you that despite the uncertainties surrounding the banking sector in Iran and US president 's economic policies and shortages of liquidity and most importantly the lowering of the trading activities of our stock market the value of our unit for the last three months has risen by 1.01% closing at IRR3,133,418 at the end of the week (last week was IRR3,102,027). Our annual return as at the above date has risen by 0.95% showing a return of 9.87% p.a.(last week was 8.92% p.a.). This has been achieved despite a deliberate reduction of the share price of one of our major holdings named Mapna Group Company to IRR8,500 per share (Market price IRR8,863 per share) and the payment of a dividend of IRR250 per share this week. This decision was taken in order to protect the interests of the remaining unit holders. Had we not reduced the above share price the value of our unit would have reached IRR3,146,606 giving rise to 0.01% in the unit. This would have pushed our position higher reaching 31st position instead of 35th with an annual return of 10.29%.

As a result of the above our position amongst our peers has improved by 3 positions closing at 35th

(last week was 38th ). This is mainly due to our cautious approach that has remained the bedrock of our investment policy. We believe in long term investment with a steady growth and do not get excited by short term gains. Our changeable market in which more than 50% of the companies are commodity based requires a cautious approach in order to maintain a sustainable growth in the long term. We believe the current enthusiasm in the commodity market will continue and hence we are confident of higher growth in the value of our Fund in the weeks and months ahead.

2

1. Market Report

All Share Index

Market indices

%change Unit change 01th March 2017 22th February 2017

-0.48% (372) 77,475 77,847 All-Share Index

0.37% 3.20 870 867 Fara Bourse Index

-0.49% (15.50) 3,122 3,137 Index Of 30 Largest Co.

-0.56% (17.30) 3,048 3,065 Index Of 50 Most Active Co.

-0.57% (0.04) 6.96 7.00 P/E

3

77,200.00

77,300.00

77,400.00

77,500.00

77,600.00

77,700.00

77,800.00

77,900.00

1395/12/04 1395/12/07 1395/12/08 1395/12/09 1395/12/10 1395/12/11

Weekly Average Trading Value

Curent Week ($) Last Week ($) Amount Of Change Change Percent

110,315,723 92,461,340 17,854,382 19%

The indices and the reason(s) for their changes

The all-share index continued its decline albeit at a slower pace with no clear prospect of recovery. The index lost 372 points(-0.48%) closing at 77,475. However Fara Bourse ( the secondary market) gained 3.2 points (+0.37%) closing at 870.

The average daily total trading value reached US$110.32 million showing a growth of 19% against last week. Most of the trading value related to the Chemicals and the Base Metals sectors which had the most negative impact on the index.

The reasons for their negative impact were:

* On the Chemicals: The gradual reduction in the value of US$ and the cutting off of the Gas supply to the industry from time to time have indeed affected their share prices during this week. However in general it is anticipated their profit forecasts will improve before their year-end as we expect stability in the international prices.

* On the Base Metals: Despite rising international prices of copper and Zinc in the last few months the share prices of this sector have been on a downward trend as both the private and corporate investors have been selling their holdings for raising cash to meet their high expenses during this month being the last month of the Iranian year.

The highest performing sectors were the Other Industry ( Granolas) and the Financial Leasing gaining 4.59% and 4.45% respectively. Conversely the Agriculture and Transportation sectors were the worst performers losing 6.6% and 2.18% respectively.

The most popular sectors were the Multidisciplinary Industrial Activities and Investment Holding Companies.

The reason for this popularity was due to:

* On the Multidisciplinary Industrial Activities the anticipated disposal of part of the portfolio of National Development Group of Industries & Mines i.e. the disposal of 33% of the shares in National Development of Industry & Mine Company (4% of its portfolio) and; 100% of the shares of Khark Petrochemical Company (3% of its portfolio).

And;

* on the Investment Holding Companies: The anticipated disposal of its entire holdings in Khark Petrochemical Company by National Development Investment Holdings Company.

4

The Debt Market The total trading value of the debt market in both markets reached US$208.8 million showing a growth of 43% against last week.

We believe the reasons for the pessimism and the lack of growth in the current market are due to the following fundamentals:

1. International Commodity Prices

Whilst the international commodity prices are on the upside the general recession dominating the market which has arisen from severe cash shortages, the attractiveness of the debt market and the gradual decline in the value of US$ internally have nullified the effect of this rise. This may also relate to the lack of stability in the prices on the international market as the prices of steel, iron ore and to some extent coal in China have reached levels which have been unpredictable both in terms of the current and future markets. On the other hand the prices of Methanol, Ammonia and Polymers on international markets have been on the rise and in China we have been witnessing a rise in construction and despite a rise in the stocks of iron ore at the Chinese ports the market has continued its upward trend. We are also witnessing the stoppage of the production of steel in China due to air pollution which appears to push the prices higher. As a result so many variables in the market there is a fear that this rise could be temporary and we might face another long recession in the production of steel and raw materials due to a drop in demand.

2. The international currency market

The position of the US Dollar and its interest rates after China is one of the main factors which can dominate the prices of commodities in the market. The current comments made by Janet Yellen, the head of US Federal Reserves in relation to the imminent rise of the interest rates have led to an anticipated rise in the US Dollar index which will then result in a reduction of the prices of gold and other commodities.

3. Iranian Banks The current dilemma facing the banking industry in relation to doubtful debts, the lack of adequate securities supporting the debts, offering higher deposit rates to fund these debts are some of the fundamental issues facing the industry whose impact on the economy cannot be ignored. However the news that the Central Bank may decide to reduce its guarantee reserves for the banks by 5% might help to alleviate the current pressure on the banks’ liquidity resulting in the lowering of both the deposit and lending rates and help increasing the liquidity in the market. 5

4. Opening of tickers of refinaries During next week we anticipate the opening of the tickers of a number of Refinery companies which could indeed help with the upside of the market. However due to approaching the end of the year and the demand for cash by the industries and the obligation of stock brokers' clients to repay their outstanding loans before the year end may lead to a further demand for the disposal of the shares in the market which could affect the share prices during the two weeks before the end of the Iranian year. Additionally the impending presidential election coupled with the political activities across the country could indeed affect the direction of the market.

However despite the above variables and uncertainties we remain positive in the medium to long term and provided there are no further sanctions against the country in the future which in our opinion are unlikely we should be witnessing higher share prices in the market in the earlier part of the new year.

6

The following sectors/ companies have had the most positive/negative impact on the market

7

Sector

Trading Value ($)

Returns %

Company Code Trading

Values ($) Returns

%

Industries with

positive Impact

Multidisciplinary industrial

activities

8,082,910.1

1.92

Tosee melli group investment co. BANK 5,477,857 0.05

Pharmaceucals, Medical

Chemicals Products

6,526,085 0.89

Alborz Investment Group ALBZ 1,822,169 4.10

Barkat Pharmed Co. BRKT 1,440,582 -6.39

Alborz Darou DALZ 848,042 -0.17

Investment

14,217,698.41 1.91

Saipa Investment Group SSAP 5,327,143 0.00

Insurance Investment Co. BIME 2,663,466

(2.78)

Tosee Melli Investment TMEL 2,064,392

(0.37)

Industries with

Negative Impact

Chemicals 29,952,831

(1.01)

Jam Petrochemicals Company PJMZ 7,432,222.22 (1.83)

Parsian Oil&Gas PASN 7,024,708.99 (1.48)

Pardis Petrochemicals Company PRDZ 5,156,269.84 0.68

Basic metals 21,694,523.81

(0.87)

Luleh Va Mashinshzi Iran LMIR 3,711,111.11 30.93

Esfehan mobarakeh steel company FOLD 3,683,968.25 (0.35)

Bahonar Copper BAHN 3,457,724.87 6.83

Monetary intermediation

& banks 12,079,206.35

(1.17)

Tejarat Bank BTEJ 3,783,915.34 0.68

Mellat Bank BMLT 2,393,518.52 1.08

Ansar Bank BANS 2,311,693.12 2.54

8

Industries with the highest/lowest return for the week

Industry with highest return Return (%)

Other mining 4.59%

Financial leasing 4.45%

Industry with lowest return Return (%)

Agriculture -6.60%

Transportation and storage -2.18%

Industries with the highest trade value for the week

Industry Trading Value ($)

Chemicals 36,863,571

Basic metals 32,711,349

Market movements since the lifting of the sanctions

The following chart shows the movements in the prices of the shares on the Tehran Stock Market

since the lifting of the sanctions:

9

Commodity Market

* No transactions on the Mercantile Market were undertaken during this week. 10

name product Current Week

Price(IRR) Last Week Price(IRR)

Change Percent

Price(USD)

Iralco 1000 pound ingot

99.8

77,334 76,325 1.32% 2.05

Isfahan oil refinary vaccum bottom 7,195 7,492 -3.96% 0.19

Tondgouyan oil refinary of

Tehran

lubecat 11,351 11,351 0.00% 0.30

Esfehan steel company round bar * * - -

National Iranian copper

industrial company

cathode 224,451 250,828 -10.52% 5.94

Esfehan mobarakeh steel

company

B hot steel 19,965 19,965 0.00% 0.53

Zagros Petrochemical

Company

methanol 11,916 10,645 11.94% 0.32

Jam Petrochemical Company High Density

Polyethylene BL3

40,677 40,677 0.00% 1.08

Shiraz Petrochemical

Company

Urea 9,550 9,824 -2.79% 0.25

Maroun Oil Company Polypropylene

MR332C

* * - -

Khouzestan Steel Company Steel Bloom 5SP

(150*150)

13,600 * - -

Bandarabbas Pasargad Oil

Company

Bitumen 60/70 9,326 9,839 -5.21% 0.25

Worldwide prices of oil & gas, major currencies, precious metals

and basic metals

Oil Change% 01/03/2017 22/02/2017 Unit

0.7% 53.85 53.49 Barrel/Dollar Opec

14.8% 1.71 1.49 Gallon/Dollar Petrol

4.2% 2.75 2.64 One Million-BTU Natural Gas

Currency (IRR) Change% 01/03/2017 22/02/2017 Currency

0.0% 32,407 32,402 Official Rate

Dollar -0.1% 37,800 37,820

Free Market Rate

-0.9% 40,760 41,120 Euro

Precious Metal Change% 01/03/2017 22/02/2017 Unit Metal

0.8% 1,247 1,237 Dollar/ Ounce Gold

1.9% 18.34 17.99 Dollar/ Ounce Silver

Basic Metal

Change% 01/03/2017 22/02/2017 Unit Product

3.6% 1,942 1,875 Dollar/ Tonne Aluminum

0.4% 2,289 2,279 Dollar/ Tonne Lead

0.9% 2,882 2,858 Dollar/ Tonne Nickel

1.0% 6,081 6,018 Dollar/ Tonne Copper

11

FX Information

Description 25-Feb 01-Mar %changes

official USD-IRR 32,405 32,407 0.01%

Market USD-IRR 37,782 37,792 0.03%

Market Euro(€) -IRR 40,175 39,807 -0.92%

Market Pound( £)-IRR 48,200 48,140 -0.12%

Market Information

index Info close unit change %change

TSE overall-TEDPIX 77,475.2 -372.0 -0.48%

TSE30 3,121.9 -15.5 -0.49%

Iran Fara Bourse overall Index 870.2 3.2 0.37%

Description last period this period %change

Market P/E 6.99 6.97 -0.3%

TSE TOP 5 Gainers

Symbol Sector Company Name

close %change

(USD Cent)

LMIR Manufacture of basic metals Iran M. & P. M. 18.48 30.93%

MRJZ Manufacture of other non-metallic mineral product Marjan Kar 22.64 26.41%

SMBZ Transportation and storage Sina Marine srv

24.17 26.26%

APDZ Information and communication Atieh Dade Pardaz

43.17 25.53%

KHOC Manufacture of cement،lime and plaster Khoozestan CE.

8.53 19.25%

12

TSE TOP 5 LOSERS

Symbol Sector Company Name

close %change

(USD Cent)

BPST Monetary intermediation & banks Post Bank 4.63 -20.60%

SPKH Manufacture of food products and beverages except sugar Kh. Pegah Dairy

9.45 -13.74%

BLKZ manufacture of chemicals and chemical products Alborz Bulk Co. 8.83 -13.37%

GSKE Manufacture of machinery and equipment A. I. S. D. 12.09 -13.22%

DADE Computer and related activities DPI 6.98 -13.22%

TSE TOP 5 VALUE LEADERS

Symbol Sector

close Trade Value

Company Name

(USD Cent)

USD Million

AZAB Manufacture of fabricated metal products،except machinery and equipment Azarab Ind.

8.44 12.1

APDZ Information and communication Atieh Dade

Pardaz 43.17 11.7

SIPA Manufacture of motor vehicles،trailers and semi-trailers Saipa 3.17 9.0

PZGZ manufacture of chemicals and chemical products Zagros Petro. 54.39 8.5

ARFZ Manufacture of basic metals Arfa Steel Co. 9.04 5.3

13

Economic News 10 European, Asian Countries Invest in Iran’s Arvand Free Zone: Official

The deputy head of the Arvand Free Zone in southwestern Iran announced that over the past year 10 European and Asian countries have made investments in the zone.

Surge in Iran’s Oil Exports to Europe Post-JCPOA

Iran’s crude oil exports to Europe have increased since a nuclear deal between Tehran and world powers came into effect early last year and terminated all nuclear-related sanctions against the country, reports said.

Iran Ranks First among World’s DRI Producers

The Islamic Republic of Iran ranked first among countries producing Direct Reduced Iron (DRI) in January 2017, the preliminary data published by the World Steel Association showed.

Wellington ‘Very Keen’ to Boost Trade Ties with Tehran: Minister

New Zealand’s Primary Industries Minister Nathan Guy said his country is “very keen” to develop trade ties with Iran.

No Obstacles to Kiev-Tehran Strategic Ties: Envoy

Ukraine’s ambassador to Iran underlined his country’s willingness to enhance bilateral collaborations with the Islamic Republic, stressing that there are no barriers to establishment of bilateral strategic ties.

Iran’s Oil Exports to Asia Rise by 70% in January: Report

Imports of Iranian crude by Asia's four main buyers of the oil rose about two-thirds in January from a year ago, a report said.

IMF: US Anti-Tehran Sanctions Could Deter Investment

The International Monetary Fund (IMF) said sanctions imposed by the new US administration against Iran are posing a risk to investment and trade with the country.

Iran to Remain A Committed Supporter of ECO: FM Zarif

Iranian Foreign Minister Mohammad Javad Zarif said the Islamic Republic is committed to continue its "unwavering support" for the Economic Cooperation Organization (ECO).

14

FM Zarif Calls for Closer Tehran-Jakarta Economic Ties

Iranian Foreign Minister Mohammad Javad Zarif underscored the importance of enhanced economic relations between Tehran and Jakarta.

Iranian Parliament OKs Attracting $5bln of Foreign Finance

The Iranian parliament approved a legislation that gives permission to the administration to attract five billion dollars in finance from foreign governments and financial institutions.

Iran to Issue over $1.5bln in Bonds for Development of Joint Oil, Gas Fields

The Iranian parliament approved a legislation that grants the oil ministry permission to sell more than 1.5 billion dollars in bonds for the development projects of oil and gas fields shared with neighboring countries.

Iran, Malaysia Agree to Trade in Yen, Yuan: Official

Iran and Malaysia have agreed to use Japanese yen and Chinese yuan in their bilateral trade, a senior Iranian banking official said.

15