Iran Weekly Market Report - 18 February 2016:
"Investors saw slower growth this week due to mixed performances by various sectors on the Tehran Stock Exchange. The TSE All-Share Index recorded its lowest increase in six weeks and closed at 77,888. This point is only 0.5% higher than last week’s closing mark. The latest gain is in contrast to the average weekly return of the main index since the start of January 2016, which has been +3.7%. The top three performers among the sectors were IT, Automotive and Metallic Products which recorded 17.6%, 13.5% and 12.5% weekly increases respectively. The IT sector in particular experienced higher growth this week as its average weekly return in the first six weeks of 2016 has been 3.4%. Automotive and Metallic Products sectors maintained their recent performance as top sectors. Oil Products, Industrial Conglomerates and Base Metals recorded the weakest returns among the major sectors as they declined by 7.5%, 3.6% and 2.4% respectively. The Oil Products sector fell after four weeks of continuous growth. The sector’s average weekly return during the first six weeks of 2016 has been +7.3%. Bandar Abbas Oil Refinery Co. (PNBA -9.5%) and Esfahan Oil Refinery Co. (PNES -9.2%) have played significant roles in pulling the sector’s index down. On Monday, PNES released its Q3 report showing a 26% drop in projected net earnings, coming down to IRR 6210 billion (approx. USD 179 million). Share prices in the Oil Products sector have moved in contrast to crude oil prices in global markets. This week the prices of WTI Crude Oil, OPEC Basket Price and Brent Crude went up by 15%, 8.6% and 4.9% respectively.
By Technical Analysis perspective, the All-Share Index’s performance during the third week of February was not strong enough to push the market benchmark above the minor resistance at 78,500. At the same time, the index managed to stay above 76,500 as the market did not experience a significant sell off. On Sunday, the TSE’s main index dropped to 76,594 but quickly bounced back to the 77,000 level over the next few days. The 50 day EMA is still lower than the index by 11%, confirming the index’s uptrend in the midterm. This can be converted to a longer term uptrend by breaking through 78,500 and moving forward to 89,500. However, in the short term the index may experience sluggish growth, before rocketing up to its all-time high of 89,500.
The TSE30, the index of the thirty largest companies by market capitalization, slipped by 0.24% to close at 3,274. This is the first negative return of the top 30s in 2016. The poor performances of Oil Products, Base Metals and Banking shares affected the TSE30 index the most. Eghtesad Novin Bank (NOVN +26.2%), Iran Khodro (IKCO +20.0%) and Informatics Services Corp. (INFO +18.4%) recorded the highest growth among the top 30s this week."
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