IMR 11 (March 2012)

Iran Market----------------------- Reporter

ADDRESSING THE NEEDS OF INVESTORS

Mofid Securities Co.Member of TSE(Tehran Stock Exchange)Member of IME(Iran Mercantile Exchange)Member of Farabourse

Contact Person: Mr. Seifollahit 009821 8190 1165f 009821 8190 1022e [email protected] www.emofid.comw www.mofidkala.com

IRAN MARKET REPORTER Is produced by Mofid Securities Co.Distributed electronically via email.

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VOluME 2ISSuE 3MARCh 201211

2 Iran Market Reporter No. 11 Mar 2012 ( Issue 3, Vol. 2) en.emofid.com

Contents3 Overview

Investors should be encouraged by the performance of Tehran Stock Exchange in March as a broad increase in share prices pushed TEDPIX 4.8 percent higher.

6 StockEven though the Number of trading days were only 17 because of Iranian new year holidays, trade value of TSE rose 27 percent compared with the prior month due to positive expecta-tions of investors.

10 FundMutual Funds experienced a good month and had up to 15 percent in-crease in their NAVs in March. Our three mutual funds were also successful due to significant positions in blue chip stocks of the market.

14 CommodityBecause of the Iranian New Year holiday, Nowruz, total trading value of the IME dropped by 40 percent compared to last month. Industrial group is leading the market with USD 700 Million trade value.

16 NewsIPO of Iran Kish Credit Card Company, the last IPO of this Iranian year, was in

March. 30 million shares of KiCCC were sold in less than a minute.

Nowruz ([nou’ru:z], meaning “The New Day”) is the name of the Iranian New Year in Iranian cal-endars and the corresponding traditional cel-ebrations. Nowruz is celebrated and observed by Iranian people and has spread in many other parts of the world.Nowruz marks the first day of spring and the beginning of the year in Iranian calendar. It is celebrated on the day of the astronomical vernal equinox, which usually occurs on March 21. The moment the Sun crosses the celestial equator and equalizes night and day is calcu-lated exactly every year and Iranian families gather together to observe the rituals.

Wikipedia.org

3en.emofid.com Iran Market Reporter No. 11 Mar 2012 ( Issue 3, Vol. 2)

Contents OverviewInvestors should be encouraged by the per-formance of Tehran Stock Exchange in March as a broad increase in share prices pushed TEDPIX 4.7 percent higher. It is the second best month in a year and a very good start for the new fiscal year (the year starts March 20).

Some sectors, like chemicals and basic metals, rose almost every day. Some others, like the vehicles and auto parts, were more volatile as the mixed news called market reactions. But at the end of the day, it was a combination of improvement in market senti-ment and estimated results of the 2nd phase of subsidies reform which raised demand in equity market.

Market Rebound in March, Capping 2nd Best Month in a YearMarket sentiment started to improve as the results of March 3 parlimentary elections an-nounced. Confidence further boosted from mid March as the president found no chal-lenge in questions from lawmakers.

As an important development, the Central Bank of Iran (CBI) and the licensed exchanges reached an agreement on March 13 which eases restrictions in trading foreign currencies based on market mechanism. The agreement directly affects main exporters especially in heavy weighted chemical and basic metal sectors.

In response, the TSE All Sahre Index (TED-PIX) advanced 4.8 percent in March. Among the main sectors, Banking and Metal Ores Minnings were the only decliner while some sectors including the Chemicals and Refined Petrochemicals Products advanced more than 10 percent.


Chemicals Take the Lead with 17.1 Per-cent IncreaseThe index of Chemicals advanced as much as 17.1 percent in March, followed by 13.6 percent increase in the index of refined petro-chemical products.

Last month, government eased formula for setting domestic prices of chemical prod-ucts. In addition, recent agreement between the Central Bank and the exchanges reduces uncertainties for main exporters when they return their revenue back home.

The index of refined petr. products includes large refineries like Isfahan Refinery [PNEX1]and Tabriz Refinery [PNTB]. They produce fuel of which the price is to rise again in the second phase of subsidies reform. The cost of feedstock will be raised too but earning esti-mates still point to positive adjustment.

Based on the latest financial report, Isfahan Refinery expects 17 percent increase in both sales and cost of production. At the same time, it estimates 10 and 6 percent increase in gross and operating profit respectively. The company raised this year EPS estimate by 6 percent to 7.5 cent.

Steel, Copper Producers Push Index HigherThe index of basic metals includes large steel and copper producers. INC Ind. [MSMI], the largest copper producer in the Middle

1. To see the details please search the symbols in BourseView.com

East, advanced 7.9 percent in March even after reducing EPS estimate by as much as 20 percent. INC Ind. gets half of its revenue from exports and investors believe the official exchange rate of 12260 Rials on which the calculation is based seems too conservative.

Steel producers also advanced as investors still bet that higher sales would offset the increase in energy prices. The industry should face another challenge, possibility of falling demand, as experts cautiously looks at activi-ties in infrastructure and housing sector.

Metal Ores Miners Recover from Earlier LossesMetal ores miners are one of two main de-cliners in March. The index fell on March 12 when it was announced that iron ores miners should pay state ownership right of as much as 30 percent. It was an open and a yearlong

Overview

The TEDPIX rose to 26,576 in March


Overviewdebate until an agency released a document with signature of vice president which put an end to all speculations.

However, the index recovered from most of its losses as the CEO of Chadormalu [CHML], a main iron ore producer, promised investors that sales price would be raised step by step to compensate for the losses.

Banks Need More Time to Adopt with New EnvironmentA decline of 1.6 percent in the Banking sector looks acceptable considering a totally new environment in which the banks have rela-tively little experience.

It should be remembered that the Credit and Monetary Council (CMC) officially raised interest rates on Jan 25. But at the same time, the banks were allowed to compete in set-ting interest rates on deposits between 1 to 5 years (see the chart below).

Faced with rising competition, banks raised rates to new levels and continue doing their best efforts to attract as much deposits as possible. So it is natural for investors to get worry about any negative impact on banks’ balance sheets. The latest earnings estimates also confirm investors’ views as it seems some banks may experience much higher increase in payments on deposits compared with growth in revenue from new loans.

Vehicles Hopefully Hold on GainsVehicle industry is in a challenge as rising costs don’t wait for companies to get official approval for raising sale prices. Nevertheless, recent developments became more promis-ing.

On March 11, it was announced that auto makers are granted to increase prices up to 9 percent. Furthermore, companies were al-lowed to pass the limit for luxury products, Peugeot 207i for example.

Five days later, the market adjustment com-mittee, headed by vice president, rejected the agreement. The Committee said it is impos-sible to raise prices without improvement in standards and quality of vehicles. However, investors probably see it as the least challeng-ing barrier for auto makers.

Overview


Trade Value (M USD) Trade Volume (M) Number of Trades Number of Trading Days

TSE1 1,904 8,171 329,830 17

Farabourse2 665 1,265 68,300 171Tehran Stock Exchange 2OTC Market

Tehran Stock Exchange

Value of Index High Low Average Compared to last month %

Compared to last year %

TEDPIX1 26,576 26,576 25,265 25,742 4.82% 8.53%

TEDPIX (FM) 22,159 22,159 21,163 21,544 4.12% 7.18%

TEDPIX (SM) 35,580 35,580 32,902 33,845 8.33% 16.04%

FFI2 33,741 33,741 32,138 32,776 4.36% 9.18%

Industry Index 21,311 21,311 20,031 20,490 6.36% 11.85%

TEDFIX 30 1,562 1,562 1,487 1,518 3.65% 4.83%1TSE Dividend & Price Index (All-share Index) 2Free Float Index

TEDPIX

Stock | Market Summary


Stock | Gainers & LosersStock | Market Summary

10 Top Gainers

Symbol Company Sector Last Price Change (%)

TOSA Iran Industrial Development Investment Companies 1,403 46.76

CRBN Iran Carbon Chemicals & By-products 912 44.76

PABD Abadan Petr. Chemicals & By-products 4,614 32.47

MOZI Iran Tractor Machinery & Equipment 2,240 32.00

NPRS Pars Oil Refined Petroleum Products 6,568 31.39

MINO Pars Minoo Food Products and Beverages... 1,869 27.40

BAHN Bahonar Copper Basic Metals 1,193 25.98

PRDZ Pardis Petr. Chemicals & By-products 32,137 24.89

Hamkaran System1 Computer & Related Activities 7,223 22.32

ROOX Iran Zinc Mines-R Metal Ores Mining 1,737 22.241Listed in Farabourse

10 Top Losers

Symbol Company Sector Last Price Change (%)

Iranian Investment Incorpo-ration Co.1

Investment Companies 2,921 (23.91)

PIAZ Piazar Agro. Food Products and Beverages... 4,736 (22.48)

Sakhteman1 Real Estate And Construction 2,227 (19.22)

BAMA Bama Metal Ores Mining 9,754 (14.41)

ABAD Abadgaran Real Estate And Construction 1,714 (12.01)

HFRS Khalij Fars Trans Transportation and Storage 1,129 (10.96)

Ravan Fanavar1 Motor Vehicles And Auto Parts 2,203 (10.01)

PIRN Pumpiran Machinery & Equipment 3,078 (9.68)

TSBE Behshahr Inv. Food Products and Beverages... 2,188 (8.95)

Day Insurance1 Insurance & Pension funding 3,278 (7.95)1Listed in Farabourse


Stock | Most Active

10 Most Active (Value)

Symbol Company Sector Change (%)

Value (USD)

PASN Parsian Oil & Gas (POGDC) Chemicals & By-products 20.41 68,362,472

BPAR Parsian Bank Banking (0.84) 63,621,896

MSMI I. N. C. Ind. Basic Metals 6.62 45,972,670

Hamrah-e-Avval (MCI)1 Post and telecommunications 11.05 34,586,577

PRDZ Pardis Petr. Chemicals & By-products 24.89 30,974,416

GDIR Ghadir Inv. Diversified Industrials (Holdings) 9.59 27,755,636

BAMA Bama Metal Ores Mining (14.41) 19,908,359

ROOX Iran Zinc Mines-R Metal Ores Mining 22.24 19,418,919

FOLD Mobarakeh Steel Basic Metals 9.84 19,324,044

MIDCO1 Basic Metals 5.15 19,142,0881Listed in Farabourse

10 Most Active (Volume)

Symbol Company Sector Change (%)

Volume

BPAR Parsian Bank Banking (0.84) 332,424,548

ROOX Iran Zinc Mines-R Metal Ores Mining 22.24 146,075,763

PASN Parsian Oil & Gas (POGDC) Chemicals & By-products 20.41 139,685,687

BPAS Pasargad Bank Banking 3.64 125,128,763

MSMI I. N. C. Ind. Basic Metals 6.62 117,992,966

MIDCO1 Basic Metals 5.15 107,294,516

GDIR Ghadir Inv. Diversified Industrials (Holdings) 9.59 84,772,306

FOLD Mobarakeh Steel Basic Metals 9.84 79,105,640

ROOI Iran Zinc Mines Metal Ores Mining 7.89 66,553,319

BALI Buali Inv. Investment Companies (2.90) 63,805,7651Listed in Farabourse


Stock | Average P/E

Highest P/E

Sector Average P/E Market Weight

Basic Metals 9.51 18.05%

Post and telecommunications 7.61 11.69%

Metal Ores Mining 7.15 8.35%

Computer & Related Activities 7.13 1.89%

Refined Petroleum Products 7.10 3.25%

Lowest P/E

Sector Average P/E Market Weight

Technical & Engineering Services 4.34 1.68%

Motor Vehicles And Auto Parts 4.40 4.95%

Banking 4.60 17.70%

Cement, Lime & plaster 4.62 2.54%

Diversified Industrials (Holdings) 4.92 9.06%


Fund | All Funds Overview

Top 10 Best Funds of February

Working Days

NAV(Rial)

Asset Under Man-agement (USD)1

Last Month (%)

Last 6 Months (%)

Last 12 Months (%)

Since Inception (Compound Return)

Boursiran 990 3,701,195 14,993,148 15.10 18.30 30.20 62.10

Firouzeh 597 1,669,348 2,369,657 13.50 19.00 29.70 36.90

Pasargad 1,310 2,258,955 1,175,367 11.30 4.20 9.20 25.50

Omid Sahm 386 1,070,296 613,214 10.50 9.30 6.20 6.70

Agah 1,335 5,013,192 4,125,041 10.50 10.80 14.00 55.40

Tose'e Saderat 325 1,258,694 516,069 10.50 22.20 — 25.90

Hafez 1,471 2,340,714 1,700,571 10.20 21.50 30.40 23.50

Noandishan 701 1,547,696 971,778 9.90 1.70 -3.30 25.60

Sina 428 1,646,092 1,176,264 9.70 27.30 44.80 53.10

Day 295 1,090,198 10,425,285 9.20 4.80 — 9.001USD to Rial exchange rate: 12,260


Fund | Pishtaz Mutual Fund

CommentaryMarch was stellar month for Tehran Stock Exchange with the general index recording a fabulous gain of 4.8 percent. we expect stocks to post attractive gains in 2012 as the P/E ratio for many major companies are below 5 and earnings are expected to grow because the overall prices of commodities are at a relative-ly high level and weaken local currency is also a plus for many companies.

Pishtaz had a total return of 8.9 percent in March as compared with a market return of 4.8 percent. Significant positions in Fanavaran (Methanol producer) [PFAN], Pardis (Fertilizer producer) [PRDZ], Parsian oil and gas devel-opment (Petrochemicals) [PASN] all boosted performance. On the other hand we reduced our positions in the Banking and Telecommu-nication sectors.

Fund’s Composition

Chemicals & By-products 23.88

Metal Ores Mining 14.37

Telecomunication 8.00

FaraBourse 7.92

Basic Metals 7.67

Other Industries 38.16

Pishtaz Mutual Fund

Inception date May. 9, 2008

Working Days 1,425

Asset under managementM Rials 92,483

1 Month 8.90%

3 Month 13.30%

6 Months 3.20%

12 Months 11.30%

Life (Compound Return) 47.70%

NAV (Rial) 4,566,393

12 Months Hight 4,567,885

Low 1,438,385


Fund | Momtaz Mutual Fund

CommentaryMomtaz had a total return of 7.2 percent in March as compared with a market return of 4.8 percent. Significant positions in Pardis (Fertilizer producer) [PRDZ], Parsian oil and gas development (Petrochemicals) [PASN] and Khoozestan Steel [FKHZ] all worked to benefit Momtaz. Over the last several months we reduced positions in the banking and the telecommunication sectors which also worked relatively well.

In March we significantly increased our po-sitions in chemicals due to our expectation for further increase in prices of these companies.

we expect stocks to post attractive gains in 2012 as the P/E ratio for many major compa-nies are below 5 and earnings are expected to grow because the overall prices of commodi-ties are at a relatively high level and weaken local currency is also a plus for many compa-nies

Fund’s Composition Weight



Banking 11.56

Basic Metals 9.45



Momtaz Mutual Fund

Inception date Feb. 16, 2010

Working Days 777


1 Month 7.20%

3 Month 15.00%

6 Months 4.00%

12 Months 12.10%


NAV (Rial) 2,289,032

12 Months Hight 2,289,489

Low 1,001,496


Fund | Pishro Mutual Fund

Pishro Mutual Fund

Inception date Apr. 20, 2011

Working Days 349


1 Month 8.00%

3 Month 17.20%

6 Months 6.20%

12 Months -


NAV (Rial) 1,126,512

CommentaryPishro had a total return of 8.0 percent and ranked 12 among 60 active funds of March. Significant positions in petrochemical, steel, copper and other natural resource producers helped performance. We have significantly reduced positions in the telecommunication and the banking sectors in order to improve portfolio balance.

We expect the market to maintain its posi-tive trend during next 2 month due to the low level of P/E ratio and high expectations of earnings. This is because of the high level of commodity prices and weaker local currency.

Fund’s Composition Weight



Basic Metals 10.01


Banking 9.06



Commodity | Summary

Iran Mercantile ExchangeBecause of the Iranian New Year holiday, Now-ruz, IME’s number of trading days decreased compared to other month therefore trading value of the market dropped compared to the last month. Industrial group are still leading the market

as around 70 percent of total trading value is in this group. However, specialists have anticipated a good year for the IME as new companies are now willing to participate in this market both for purchasing their needed material and selling their commodities.

Groups of Product Value (USD) Percent Compared to Last Month (USD)

Industrial Export Ring 0 0.00% ---

Domestic Ring 717,355,147 69.66% -31.54%

Agricultural 13,975,010 1.36% -63.62%

Oil & Petrochemical Export Ring 39,354,550 3.82% -69.59%

Domestic Ring 259,068,829 25.16% -33.52%

Total 1,029,753,537 100.00% -39.16%


News | IPOIn

itial Pub

lic Offerin

g

Tehran Stock Exchange lists Iran Kish Credit Card CoMarch 14, 2012

TSE: On 13 March 2012, Iran Kish Credit Card Co. (KiCCC)[RKSH], a PSP (Payment Service Provider), made an initial public offering of about 30 mil-lion shares (equivalent to 10 percent of its total equity shares) at Tehran Stock Exchange. The of-fered shares were traded at the price of IRR 9,800 (USD 0.8) per share, with the total trading value of IRR 294 billion (USD 24 million).

Common stocks of KiCCC are listed and

traded on TSE’s second market under the symbol [RKSH] (please find the symbol in bourseview.com).

The company is mainly providing e-payment services in the banking society now, and has begun its cooperation with the Iranian banks to create and support their POS (Point Of Sale) network and other transaction instruments.

TSE Value hits $111 billionMarch 10, 2012

IRAN DAILY: The value of capital market reached 1,260 trillion Rials ($111 billion) in the closing days of the current Iranian year (to end March 20), managing director of Tehran Stock Exchange (TSE), Hassan Ghalibaf said.

Comparing performance of TSE with global bourses, based on statistics released by World Federation of Exchanges (WFE), TSE index grew by 5.29 percent and ranked first among WFE members during 2011. Seven companies joined bourse and their shares were offered this Iranian year.

Some companies have joined bourse but their shares have not been offered yet includ-ing Mellat Insurance Company, Pasargad Oil

Company, and Bandar Abbas Oil Refining Com-pany. He hoped that they will be offered by the yearend. He named Leasing Parsian, TAM Iran Khodro, Iran Khodro Khorasan Company, Iran Khodro Tabriz Company, and Iran Khodro In-vestment Company as major companies which are going through the admission process.


NewsLargest ME Bourse Exhibition Due in MayMarch 30, 2012

IRAN DAILY: The Sixth International Exhibition of Bourse, Bank and Insurance and the 4th International Islamic Capital Market Forum will be held from May 8-10 in Tehran.

Announcing the above, head of Securities and Exchange Organization, Ali Salehabadi said more than 15 countries are expected to take part in the exhibition, which is to be held in an area of 24,000 square meters, IRNA reported on Monday.

Referring to the exhibition as the largest financial expo in the Middle East, he noted that some 200 companies from Iran and other countries operating in the field of capital and monetary markets will showcase their latest achievements.

The official said that representatives of capital markets of 15 countries will participate in the 4th International Islamic Capital Market Forum which will be held concurrent with the expo.

Senior experts of the Islamic capital market from Iran and other countries will attend the forum organized by Securities and Exchange

Organization and Islamic Development Bank.

He said that both events are welcomed warmly by those involved in the capital mar-kets of Iran and other countries.

“Holding such an exhibition is a big step towards developing international financial and monetary activities of the country,” he con-cluded.

Ali Saleh Abadi - head of Securities and Ex-change Organization

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IMR 11 (March 2012)

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Transcript of IMR 11 (March 2012)