Winners, Losers of Q1 Iran Stocks

EghtesadOnline: Tehran stock market investors had a good run in the current fiscal year's first quarter (March 21-June 21).

News ID: ۷۸۳۰۹۸

30 June 2018

The market yielded more than half of what it gained in the entire last fiscal year and certain industries in bulls' crosshairs outperformed the index.

Fresh money, having just ravaged foreign exchange, gold, automotive and housing markets, was injected into the market and rejuvenated the first two month and a half's comatose trading.

The market as a whole was being lifted in the initial days of the rally that started on June 13. However, larger cap firms and industries started to reign supreme later on, according to Financial Tribune.

Tehran Stock Exchange's all-share index, TEDPIX, gained 12,582 points or 13% in Q1 to notch a new high of 108,872.

The same held for the smaller over-the-counter exchange Iran Fara Bourse. Its all-share index, IFX, gathered 145 points or 13.22% to hit 1,241.61 – also a new record.

Yet some companies and industries posted gains that far outperformed all-share indices. In fact, out of the 33 industries on the rise, 10 of them zoomed past the main index, Bourse 24 reported.

> Top Five Industries

The wood industry was the first quarter's main yet unlikely winner with a whopping 75% upsurge in its index.

Like the other industries, most of the interest in the index's only tracked company, Iran Fiber Company, came during Q1's dying days. Gains were minimal during the first two months.

The second top industry was metal ore extraction with a 44% rise in its index for the first quarter. Yet there's more here than meets the eye, as certain firms recorded returns higher than the index.

Chadormalu Industrial and Mining Complex was at the top with 48% growth, followed by Golgohar and Sabanour with 46% and 45.7% gains respectively.

At the bottom, however, was Milad Steel and Iron Company with a 1.46% downtick in its shares for the period.

Third on the list was the base metals industry with an average Q1 gain of 33%. Arfa Steel Company was at the top with its shares going up 55%. It was followed by the recently reinvigorated Esfahan Steel Company with 40%, the giant flat steelmaker Mobarakeh Steel Company with 36% and Yazd Alloy Steel Company with 30%.

Yet despite the overall industry growth, five firms ended in the negative territory. Kavian Steel was the worst performer with an 18.5% drop, which was tailed by Rolling & Steel Parts Manufacture Company with 13.72%, Sadid Industrial Group with 8.7%, Iran Machine & Pipe Manufacture Company with 4.2% and Sepanta Company with 4%.

Industrial contracting industry was next with a mixed performance. It only tracks two shares, Iran Marine Industrial Company and Ballast Company, the former rising 19.6% in Q1 and the latter dropping 13.63%.

And the last of the top five industries is tiles and ceramic, the market's favorite for the year's first two months. Its average Q1 return reached 16%, while certain shares such as Alvand and Takceram tile companies posted 57.4% and 33.5% upticks. Four firms also ended the period in the negative territory.

> Worst Performing Industries

The retail industry was hit the worst during the period, dropping 25.5% in Q1. Its first tracked share, the distribution company Ghasem Iran Company gained about 6% for the period. Yet the larger Refah Chain Stores' shares plummeted by 36.5%.

Next up is the auto industry, one of Iran's largest and most monopolized. The overall industry index has dropped 6.4%, but some of the shares are doing way worse.

Iran Khodro Diesel has wiped 16.4% of its shares' value and its parent company, Iran Khodro, has also dropped 12.7%. Yet IKCO's nemesis, SAIPA, has shed only 4.2%. The other seven tracked shares have recorded losses ranging from 4-10%.

The United States pullout from the 2015 Iran nuclear deal was bad on its own, but basically spelled doom for the auto industry as most of its vital contracts with foreign automakers were scrapped–the prime example being the French automaker PSA suspending its joint ventures in Iran. A devaluing rial was also not good news for parts and raw material importers.

The third worst performer is the telecommunications industry with a 4.4% drop in its index. That also can be attributed to the rising investment risk due to sanctions. European and Chinese telecom companies, whose equipment comprise most of Iran's infrastructure, have been spooked by the prospect of sanctions.

And finally, last in line was transportation and storage with 3.9% downtick and electric equipment manufacture with 3.12%.