iran market reporter

IranMarketReporter

Overview:In February 2013, the TSE All Share Index (TEDPIX) rose for the sixth time in seven months as an increase in prices of refineries and financials made up for losses in iron ore and basic metals producers. TEDPIX closed at 37811.60 after reaching to an all-time high of 38716.20 on Feb 13.

Funds:Our mutual funds did not have their best performance in February even though they are top 10 in long term basis.

Stock:In February TSE all share index, TEDPIX, increased as much as 3.4% compared to last month. However, the TSE blue-chip in-dex (TEDFIX30), which includes the largest companies of the market, declined by 2.8% compared to January.

NewsThis section provides the most important news on Iran capital market specially exchanges for the month of Februar y.

Commodity:In IME, 11 percent of commodities have been exported by the suppliers in February which shows 3 percent growth compared to first month of 2013.

22Volume 3Issue 2February 2013

ADDRESSING THE NEEDS OF INVESTORS

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

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

009821 8190 1165 009821 8190 1154 [email protected]

1

5

12 11

7

Iran Market Reporter No. 22, Feb 2013 ( Issue 2, Vol. 3) en.emofid.com

Overview

1

In February 2013, the TSE All Share In-dex (TEDPIX) rose for the sixth time in seven months as an increase in prices of refineries and financials made up for losses in iron ore and basic metals producers. TEDPIX closed at 37811.60 after reaching to an all-time high of 38716.20 on Feb 13.

Uncertainties High after Italian Elections and Fed›s Statement

The price of commodities fell in the second month of the year as the uncertainty about the Fed policies plus the political deadlock in Italy overshadowed better than expected economic reports.In the U.S, economic data point to ongo-

ing improvement in the job market. In the housing sector, prices increased and existing home sales is close to one year high of 4.9 million units a year. Manufacturing sector also expanded for the second months, help-ing trade deficit to fall to the lowest level in more than two years.Other reports also show improvements in

major economies. Chinese manufacturing expanded for the five consecutive months though at a lower rate. German ZEW and IFO indexes show that businesses are more opti-mistic about the future of the largest econo-my in the Euro area. Finally, Japan expected to expand monetary and fiscal stimulus espe-cially after G-20 members refused to directly address Japanese policies of weakening the yen. However, as it was mentioned, the Federal

Reserve and Italy have become two sources for rising uncertainty and risk in the finan-cial markets. The latest statement from the Fed shows that many members expressed concerns about continuing asset purchases, saying the Fed should be prepared to vary the pace of purchases in response to change in economic outlook. The USD strengthened in response, resulting in decline of many com-modities like oil and base metals.

Metallic Ores, Basic Metals Fall on Weak-er USD and Higher Taxes

Iron ore producers fell in February after eight consecutive months of growth. Basic metal producers, the largest sector among TSE industries, also declined for the second months. The uncertainties in the local FX market plus the speculations about the effect of next year budget on profits are the main reasons behind February decline.

From the currency side, optimisms are high for improvements in foreign relations espe-cially after negotiations in Almaty, Kazakh-stan. So the expectations for a stronger USD diminished. Revenue in both sectors is di-rectly related to global prices, and a weaker USD tends to reduce revenue in Rial terms.

From the budget side, it seems that parts of shortfalls in oil revenue might be compensat-ed by higher mining rights which might be five-folded. If passed by the parliament, iron ore producers and steel makers are likely to pay the price together.

Refineries Advance for Eighth Consecu-tive Months

Index of petr. products producers rose as much as 39.5 percent while the Isfahan Re-finery is responsible for most of this perfor-mance. Shares of Isfahan Refinery jumped as much as 240 percent after trading resumed on Feb 9. The company was halted from trad-ing for almost nine months. Tabriz Refinery, the third largest refinery in TSE, also rose as much as 31.4 percent after raising its next year EPS forecast.

Finally, in Italy, results of parliamentary elections show that no collation is able to form a strong government which is necessary to implement austerity plans and pull the country out of a deepening recession.

Local restriction on exports of some chem-ical products, of which the authorities think are vital for domestic consumption, is anoth-er challenge for companies which get most of revenue from overseas. A report from the customs office shows that exports of chemi-cal products has fallen by 19 percent in Febru-ary from the prior month. The decline might be temporary as an official from oil ministry said they are negotiation with the Ministry of Industry, Minerals, and Trade to lift the restrictions on exports.


Overview

2

There were three IPOs in this sector this month: Lavan Refinery, Pasargad Oil Co, and Iranol Oil Co. Shares of Lavan refinery almost doubled in three weeks after its IPO as the at-titude is generally positive toward this sector. Pasrgad is large tar producer which gets its feedstock, called Vacuum Bottom (VB) from a number of refineries. Iranol gets crude oil from Tehran and Abadan refineries and pro-duces motor oil. Recently, motor oil producers applied for an increase of 50 percent in pric-es. The minister of industry showed signs of positive response though the increase might be gradually, probably in two steps.

Chemicals Falls on Feedstock, Export Chemicals producers fell for the second

months in response to speculations about possible increase in price of feedstock. A member from the committee of energy in the parliament complained about the chemical plants which get natural gas and other feed-stock at official exchange rate and sell their dollars at unofficial market.

Foods ex. Sugar Rise 25 percent on Good Earning Reports

Foods producers are the second best per-former in February just after refineries. The index of foods ex. Sugar rose as much as 25 percent, erasing all decline in the prior two months. Margarin Iran, a main cooking oil producer, rose as much as 50 percent after announced that its profit is 60 percent more than its latest estimate. Piazar, a company which sells products under the brand of Aas-an, rose 33 percent after raising its EPS fore-cast. Piazer expects the sales and operating costs to rise 55 and 48 percent respectively.

Total exports, excluding crude oil, increased by 15 percent in Feb from the previous month

a19 percent in the same period.


Other sectorsCar makers fell for the third consecutive

months as the horizon for production and prices is still unclear. Stocks increased earlier after car makers sharply raised prices but it didn›t last as the movement was so unpopu-lar that they soon came under pressure from the government. In addition, early response from the market suggests that higher prices might eventually start to affect demand.Cement producers rose for the first time

in four months. Cement plants are expect-ed to gradually replace fuel oil with gas af-ter the winter. Natural gas is cheaper so the profit margin is expected to rise in coming months. The syndicate of cement employers also asked that prices must be allowed to be determined by the market for the industry which must struggle with rising costs of op-

Overview

TSE Main Sectors ( Feb 2013 )

28-Feb MonthlyChange(%)

2013 Return(%)

Petro. Products 149,874.30 39.5 40.0

Foods ex. Sugar 1,067.30 25.7 11.2

Cement 313.10 3.9 2.7

TEDPIX 37,811.60 3.4 -0.1

Real Estates 546.40 2.8 0.1

Financial intermediation 694.90 2.1 -0.5

Pharmaceuticals 1,354.10 1.9 0.7

Banks 282.00 1.7 - 3.9

Conglomerates 3,635.00 -0.7 -1.4

Basic Metals 28,275.80 -1.3 -9.7

Chemicals 2,544.30 - 3.1 - 3.5

Telecom 267.40 - 3.8 -12.8

Vehicles 4,589.10 - 5.6 -9.2

Metallic Ores 12,308.30 -6.1 -2.0

Crude Oil (WTI) 91.89 - 5.7 0.7

Copper 7,770 -4.6 -1.8

EURUSD 1.3063 - 3.8 -1.0

Global prices for comparison only.

eration and maintenance.Telecommunication Company of Iran (TCI), the

second largest company based on market cap, fell for the second months as a 13 percent increase in its next year EPS fell short of expectations. Pharmaceutical producers rose for the first time

in eight months after the head of parliamentary healthcare committee said that drug prices will definitely rise next Shamis year. Homebuilders rose 2.8 percent to erase all of

decline in the previous month. An official report shows that average price of land increased by 30 percent in the spring and summer from the same period in the prior year. Average prices of homes also increased by 20 percent in the same period. Durable goods manufacturers also rose after

getting an approval to increase prices of home appliances between 5 to 20 percent.

3


Mofid Commodity Index

Overview

4

Recent changes of Mofid Commodity Index (MCI) and the index composition are shown in the following table and charts. MCI is developed to track global prices of a number of key commodities to which the revenue of Iranian com-modity stocks are sensitive to. For more information please visit our website: en.emofid.com

MCI Composition

MCIComposite

MCIMetals

MCIChemicals

MCIPetroleum

Weekly % -3.4 -9.0 0.4 -2.6

Monthly % -6.2 -9.1 2.8 -7.3

Yearly % 52.2 8.8 92.6 62.5

MCI Changes


Market Summary

5

Trade Value (M USD)

Trade Volume (M)

Number of Trades

Number of Trading Days

TSE ¹ 3,506 10,548 458,862 19

Farabourse ² 1,234 4,705 286,842 19

¹: Tehran Stock Exchange ²: OTC Market

Tehran Stock Exchange

Value of Index

High Low AverangeCompared to Last Month%

Compared to Last Year (%)

TEDPIX1 37,812 38,739 36,447 37,864 3.44% 49.78%

TEDPIX (FM) 30,231 31,059 28,960 30,249 4.27% 42.76%

TEDPIX (SM) 59,700 61,012 58,867 59,957 0.47% 81.94%

FFI2 44,213 45,548 43,296 44,612 1.84% 37.41%

Industry Index 32,865 33,801 31,571 32,944 3.76% 64.84%

TEDFIX 30 1,979 2,087 1,959 2,039 -2.82% 31.93%1 TSE Dividend & Price Index (All-share Index) 2 Free Float Index

TEDPIX All-Share IndexFebruary 2013

Stock


Stock

6

Average P/E

Highest P/E

Sector P/E Percent of Total Market Cap

Refined Petroleum Products 10.97 11.29%

Food Products and Beverages except sugar 7.08 0.98%

Metal Ores Mining 6.67 11.88%

Basic Metals 6.10 20.99%

Post and telecommunications 5.47 6.36%

Lowest P/E

Sector P/E Percent of Total Market Cap

Banking 3.65 11.74%

Cement, Lime & plaster 4.21 2.34%

Technical & Engineering Services 4.71 1.42%

Motor Vehicles And Auto Parts 4.75 0.98%

Pharmaceuticals 4.87 1.59%

P/E Ratio of Major Sectors

Iran Market Reporter No. 22, Feb 2013 ( Issue 2, Vol. 3) en.emofid.com7

All Funds Overview

Top 10 Best Mutual Funds of Month

Working Days NAV (Rials)

Asset Under Management

(USD1)

Last Month (%)

Last 6 Month (%)

Last 12 Month (%)

Since Inception (Compound Return)

Pars 1,083 2,821,859 1,855,139 30.30 56.70 73.70 41.90

Agah 1,668 7,929,664 3,948,695 6.30 68.60 74.70 57.30

Karizma 151 1,383,832 834,502 6.00 — — 38.40

Day Insur-ance

965 2,157,039 684,095 6.00 38.20 49.80 33.70

Sina 761 2,738,061 3,114,356 5.60 71.80 82.50 62.10

Refah 970 1,849,062 1,457,096 4.70 43.80 28.70 26.00

Melli Bank 1,757 8,159,016 6,092,659 4.60 59.10 65.70 54.70

Boursiran 1,323 6,319,605 34,761,419 3.80 77.70 96.40 66.30

Karafarin 720 1,390,321 4,144,617 3.10 45.10 35.80 18.20

Tose'e Ta'avon 297 1,415,281 1,265,090 2.00 46.10 — 41.50

All Funds Index2 -1.10 23.30 19.20

1USD to Rial exchange rate: 2Including 64 Mutual Funds12,260

All Funds Overview

Fund


Fund

10

Mofid Mutual FundsIn February TSE all share index, TEDPIX,

increased as much as 3.4 percent compared to last month. However, the TSE blue-chip index (TEDFIX30), which includes the largest com-panies of the market, declined by 2.8 percent compared to January. Our mutual funds did not have their best

performance in February even though they are top 10 in long term basis. Compared to last month, Pishtaz and Pishro fell by 2.6 per-cent and Momtaz by 2.2 percent. We expect the market to continue falling

in March but traditionally, after Iranian New Year (March 20th) the market rise as the mar-ket expectations about new fiscal year rise. We are positively increasing our positions

in less risky assets waiting for the market to change direction. We are also positive about the some specific sectors that we believe are now oversold and potentially can rise again in March.

Mofid Mutual Funds

Pishtaz Momtaz Pishro Omid

Inception date May 9, 2008 February 16, 2010 April 20, 2011

Com

ming Soon...

Working Days 1,758 1110 682

Asset under management M Rials 64,475 172,565 144,525

1 Month 5.26 14.08 11.79

3 Month -2.60% -2.20% -2.60%

6 Months 13.40% 13.80% 14.00%

12 Months 54.20% 54.80% 55.40%

Life (Compound Return) 52.00% 48.40% 55.10%

NAV (Rial) 47.30% 46.90% 30.70%

12 MonthHigh 6,974,827 3,475,180 1,783,382

Low 4,027,793 2,003,596 1,016,997

NAV Change (12 Months)


Commodity

11

Groups of Products Type Value (Rials) Value (USD) Volume (MT)

Industrial and MineralExport Ring 637,528,400,000 52,000,685 200,000

Domestic Ring 26,186,240,778,000 2,135,908,709 1,221,176

Total 26,823,769,178,000 2,187,909,395 1,421,176

AgriculturalExport Ring 0 0 0

Domestic Ring 14,612,500,000 1,191,884 2,380

Total 14,612,500,000 1,191,884 2,380

Oil & PetrochemicalExport Ring 4,678,597,922,000 381,614,839 271,727

Domestic Ring 14,296,758,821,000 1,166,130,410 670,985

Total 18,975,356,743,000 1,547,745,248 942,712

Total 3,736,846,527 2,366,268

Compared to last month, the total trade value has risen by 30 percent to USD 3.7 billion. Industrial ring was the most active for the value of trades. Almost 35 percent of total trade value has accrued in this ring thanks to Isfahan steel activity in the ring with more than USD 430 million which is almost 20 percent of value of trades. In total, 11 percent of commodities have been exported by the suppliers in February which

shows 3 percent growth compared to first month of 2013.

31%

57%

10%

2%


Tehran Stock Exchange Market Cap Breakdown February 20, 2013 | Source: TSE.ir

Tehran Stock Exchange Turned 45 February 3, 2013 | Source: TSE.ir

News

12

Based on the latest report of TSE’s Data and Information department, Basic Metals, Chemical Products and Metal Ore Mining are the leading sectors in the Exchange, with ,20.21 13.52 and 11.77 percent of total market capitalization, respectively.The total market capitalization of TSE is currently above IRR 1730 trillion.Banks, Credit and Other Monetary Institutions is in the fourth step with 10 firms and 10.99

percent of TSE’s market cap.The Diversified Holding comes in the fifth rank of TSE’s market cap table. The sector includes

4 shares and 9.88 percent of the total market cap. Refined Petroleum Products and Nuclear Fuel, Post and Telecommunications, Motor Vehicles

and Auto Parts, Investment Companies, as well as Cement, Lime and Plaster are the sectors which are ranked 6 to 10 in Tehran Stock Exchange’s market capitalization table, respectively with 2.26 ,2.35 ,6.03 ,9.78, and 2.14 percent of the total amount.

TSE was founded in February 1967 with only six listed companies, and after decades of development, it is now a market with above IRR 1660 trillion capitalization and 322 listed companies, as well as bonds and derivatives markets.Dr. Hassan Ghalibaf Asl, TSE’s CEO issued the following statement on the occasion:“With 45 years of experience, Tehran Stock Exchange is now determined with its vivid spirit

to increase its share in developing the local economy.Public participation in the economic activities of enterprises with small savings, information

transparency, liquidity improvement, facilitated funding, raising market’s accountability for the stakeholders and the society, and privatization plan’s progress are among our priorities and duties against the Iranian financial and economic system.It is hoped that the market participants’ cooperation will pave us a way towards more

flourishing and greater influence in the country’s economic growth.”

IME Shines in Steel Success Strategies ConferenceFebruary 20, 2013 | Source: IME.co.ir

For the first time in the history of world steel industry, IME appeared as the most prominent exchange market of the Middle East in an international conference on steel industry and the related markets.According to the report from IME international affair, in line with the market-wise expansion

of the international relations, Iran Mercantile Exchange participated in the Steel Success Strategies Conference which was held in February in Turkey, with Dr.Hossein Panahian the


News

13

president and CEO of the exchange as the key speaker and presenter in the conference.The conference attended by a large number of the international steel producers from across

the globe highlighted the current situation of the steel production and consumption in the world and provided a clear forecast of the total supply and demand by the different industries around the world, addressing the opportunities and challenges ahead of production sector and consuming market.

The IME managing director delivered speech on the overall steel market in Iran and the steel products transactions in IME as well as risk management and hedging of price volatility through steel futures contracts. The Istanbul conference, organized by Metal bulletin, is regarded as the first international steel forum with the prominent exchange markets such as CME, IME and several international commodity brokerage companies in attendance.During the days of the conference, each of the companies presented an outlook of production

potentials, development plans, steel consumption and import and export of crude, long and flat steel products. Regarding to this, Dr. Panahian gave an introductory speech about IME referring to its role in the national economy and the functionalities like increasing transparency, fair price discovery, increasing the competitiveness and providing financing tools for producers and the IME plans to launch steel futures market.At the end of conference, a panel discussion was held in which the panelists were asked

questions about IME operation, brokers, clearing, delivery methods, and popularity of futures contracts and risk management opportunities in their relevant market.Its worth to say that, Iran is the 2nd largest steel producer in the Middle East and North

Africa (MENA) region producing 14 million and 700 thousand tons of crude steel in 2012.The presence of IME was a great opportunity to introduce IME and its role to the producers,

consumers and traders at international level.

About Mof id

Mofid Securities Company is the leading brokerage firm mainly active in Iranian Capital Market. Mofid creates financial products and offers financial services to its clients and investors. Having a qualified and diverse management team enables Mofid to benefit from coupling local knowledge and presence with global expertise.Mofid publishes this newsletter, Iran Market Reporter (IMR), in order to keep its readers updated

on the latest news and events of Iran capital market, especially Tehran Stock Exchange (TSE), as well as valuable information for individual and institutional investors.Iran Market Reporter is distributed exclusively via email or hard copy 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 referral only or through an online request sent to:

[email protected].

DisclaimerThis 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.

Iran Market Reporter No. 22, Feb 2013 ( Issue 2, Vol. 3) en.emofid.com14

Important NoticeThe contents of this newsletter are for the sole use of the addressee. All content in this file is owned and operated by MOFID SECURITIES COMPANY, and the copying or distribution of this newsletter, internally or externally, is strictly prohibited without the prior written permission and consent of MOFID SECURITIES COMPANY If you wish to distribute the file, please email the Subscriptions Department at [email protected], providing details of your subscription and the number of recipients you wish to forward or distribute this information to.

Scan to find out more about Mofid www.emof id.com

iran market reporter

Documents

share index tedpix

basic metals producers

basic metals fall

iran capital market

tse bluechip

job market

base metals

prices of refineries