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Iran Market

----------------------- Reporter ADDRESSING THE NEEDS OF INVESTORS

11

Volume 2 ISSUE 3 March 2012

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

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Contents 3

Overview

6

Stock

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.

Even 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 expectations of investors.

10

Fund

14

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

Commodity

16

Because 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.

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 calendars and the corresponding traditional celebrations. 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 calculated exactly every year and Iranian families gather together to observe the rituals. Wikipedia.org

News

2

IPO of Iran Kish Credit Card Company, the last IPO of this Iranian year, was in Iran Market Reporter No. 11 Mar 2012 ( Issue 3, Vol. 2) 

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Overview Investors should be encouraged by the performance 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 sentiment 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 Year Market sentiment started to improve as the results of March 3 parlimentary elections announced. Confidence further boosted from mid March as the president found no challenge 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 (TEDPIX) 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.

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

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Overview Chemicals Take the Lead with 17.1 Percent Increase The index of Chemicals advanced as much as 17.1 percent in March, followed by 13.6 percent increase in the index of refined petrochemical products.

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.

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

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 activities in infrastructure and housing sector.

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 estimates 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.

Metal Ores Miners Recover from Earlier Losses Metal ores miners are one of two main decliners 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

Steel, Copper Producers Push Index Higher The 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 4

The TEDPIX rose to 26,576 in March

Iran Market Reporter No. 11 Mar 2012 ( Issue 3, Vol. 2)â€

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Overview debate 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 Environment A decline of 1.6 percent in the Banking sector looks acceptable considering a totally new environment in which the banks have relatively 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 setting 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 Gains Vehicle 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 promising. On March 11, it was announced that auto makers are granted to increase prices up to 9 percent. Furthermore, companies were allowed to pass the limit for luxury products, Peugeot 207i for example. Five days later, the market adjustment committee, headed by vice president, rejected the agreement. The Committee said it is impossible to raise prices without improvement in standards and quality of vehicles. However, investors probably see it as the least challenging barrier for auto makers.

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

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Stock | Market Summary Trade Value (M USD) TSE1 Farabourse2 1 Tehran Stock Exchange 

Trade Volume (M)

Number of Trades

Number of Trading Days

1,904

8,171

329,830

17

665

1,265

68,300

17

OTC Market

2

Tehran Stock Exchange Value of Index

High

Low

26,576 26,576 25,265 TEDPIX1 22,159 22,159 21,163 TEDPIX (FM) 35,580 35,580 32,902 TEDPIX (SM) 33,741 33,741 32,138 FFI2 21,311 21,311 20,031 Industry Index 1,562 1,562 1,487 TEDFIX 30 1 2 TSE Dividend & Price Index (All-share Index)  Free Float Index

Average

Compared to Compared to last month % last year %

25,742

4.82%

8.53%

21,544

4.12%

7.18%

33,845

8.33%

16.04%

32,776

4.36%

9.18%

20,490

6.36%

11.85%

1,518

3.65%

4.83%

TEDPIX

6

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

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Stock | Gainers & Losers 10 Top Gainers Symbol

Company

Sector

TOSA CRBN PABD MOZI NPRS MINO BAHN PRDZ

Iran Industrial Development Iran Carbon Abadan Petr. Iran Tractor Pars Oil Pars Minoo Bahonar Copper Pardis Petr. Hamkaran System1 ROOX Iran Zinc Mines-R 1 Listed in Farabourse

Last Price

Change (%)

1,403

46.76

912

44.76

4,614

32.47

2,240

32.00

6,568

31.39

1,869

27.40

1,193

25.98

32,137

24.89

7,223

22.32

1,737

22.24

Last Price

Change (%)

Investment Companies

2,921

(23.91)

Food Products and Beverages... Real Estate And Construction Metal Ores Mining Real Estate And Construction Transportation and Storage Motor Vehicles And Auto Parts Machinery & Equipment Food Products and Beverages... Insurance & Pension funding

4,736

(22.48)

2,227

(19.22)

9,754

(14.41)

1,714

(12.01)

1,129

(10.96)

2,203

(10.01)

3,078

(9.68)

2,188

(8.95)

3,278

(7.95)

Investment Companies Chemicals & By-products Chemicals & By-products Machinery & Equipment Refined Petroleum Products Food Products and Beverages... Basic Metals Chemicals & By-products Computer & Related Activities Metal Ores Mining

10 Top Losers Symbol

Company

Sector

Iranian Investment Incorporation Co.1 PIAZ Piazar Agro. Sakhteman1 BAMA Bama ABAD Abadgaran HFRS Khalij Fars Trans Ravan Fanavar1 PIRN Pumpiran TSBE Behshahr Inv. Day Insurance1 1 Listed in Farabourse

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

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Stock | Most Active 10 Most Active (Value) Symbol

Company

PASN BPAR MSMI

Parsian Oil & Gas (POGDC) Parsian Bank I. N. C. Ind. Hamrah-e-Avval (MCI)1 PRDZ Pardis Petr. GDIR Ghadir Inv. BAMA Bama ROOX Iran Zinc Mines-R FOLD Mobarakeh Steel MIDCO1 1 Listed in Farabourse

Sector Chemicals & By-products Banking Basic Metals Post and telecommunications Chemicals & By-products Diversified Industrials (Holdings) Metal Ores Mining Metal Ores Mining Basic Metals Basic Metals

Change (%)

Value (USD)

20.41

68,362,472

(0.84)

63,621,896

6.62

45,972,670

11.05

34,586,577

24.89

30,974,416

9.59

27,755,636

(14.41)

19,908,359

22.24

19,418,919

9.84

19,324,044

5.15

19,142,088

10 Most Active (Volume) Symbol BPAR ROOX PASN BPAS MSMI

Company

Parsian Bank Iran Zinc Mines-R Parsian Oil & Gas (POGDC) Pasargad Bank I. N. C. Ind. MIDCO1 GDIR Ghadir Inv. FOLD Mobarakeh Steel ROOI Iran Zinc Mines BALI Buali Inv. 1 Listed in Farabourse

8

Sector Banking Metal Ores Mining Chemicals & By-products Banking Basic Metals Basic Metals Diversified Industrials (Holdings) Basic Metals Metal Ores Mining Investment Companies

Iran Market Reporter No. 11 Mar 2012 ( Issue 3, Vol. 2)â€

Change (%)

Volume

(0.84)

332,424,548

22.24

146,075,763

20.41

139,685,687

3.64

125,128,763

6.62

117,992,966

5.15

107,294,516

9.59

84,772,306

9.84

79,105,640

7.89

66,553,319

(2.90)

63,805,765

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Stock | Average P/E Highest P/E Sector Basic Metals Post and telecommunications Metal Ores Mining Computer & Related Activities Refined Petroleum Products

Average P/E

Market Weight

9.51

18.05%

7.61

11.69%

7.15

8.35%

7.13

1.89%

7.10

3.25%

Lowest P/E Sector Technical & Engineering Services Motor Vehicles And Auto Parts Banking Cement, Lime & plaster Diversified Industrials (Holdings)

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Average P/E

Market Weight

4.34

1.68%

4.40

4.95%

4.60

17.70%

4.62

2.54%

4.92

9.06%

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

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Fund | All Funds Overview Top 10 Best Funds of February Working Days

NAV (Rial)

990 3,701,195 Boursiran 597 1,669,348 Firouzeh 1,310 2,258,955 Pasargad 386 1,070,296 Omid Sahm 1,335 5,013,192 Agah 325 1,258,694 Tose'e Saderat 1,471 2,340,714 Hafez 701 1,547,696 Noandishan 428 1,646,092 Sina 295 1,090,198 Day 1 USD to Rial exchange rate: 12,260

10

Asset Under Man- Last Month Last 6 Last 12 Since Inception agement (USD)1 (%) Months (%) Months (%) (Compound Return) 14,993,148

15.10

18.30

30.20

62.10

2,369,657

13.50

19.00

29.70

36.90

1,175,367

11.30

4.20

9.20

25.50

613,214

10.50

9.30

6.20

6.70

4,125,041

10.50

10.80

14.00

55.40

516,069

10.50

22.20

25.90

1,700,571

10.20

21.50

30.40

23.50

971,778

9.90

1.70

-3.30

25.60

1,176,264

9.70

27.30

44.80

53.10

10,425,285

9.20

4.80

9.00

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

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Fund | Pishtaz Mutual Fund Commentary March 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 relatively 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 development (Petrochemicals) [PASN] all boosted performance. On the other hand we reduced our positions in the Banking and Telecommunication sectors.

Pishtaz Mutual Fund Inception date Working Days Asset under managementM Rials 1 Month 3 Month 6 Months 12 Months Life (Compound Return) NAV (Rial) 12 Months Hight Low

May. 9, 2008 1,425 92,483 8.90% 13.30% 3.20% 11.30% 47.70% 4,566,393 4,567,885 1,438,385

Fund’s Composition Chemicals & By-products Metal Ores Mining Telecomunication FaraBourse Basic Metals Other Industries en.emofid.comâ€

23.88 14.37 8.00 7.92 7.67 38.16

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

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Fund | Momtaz Mutual Fund Commentary Momtaz 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 positions in chemicals due to our expectation for further increase in prices of these companies.

Momtaz Mutual Fund Inception date Working Days Asset under managementM Rials 1 Month 3 Month 6 Months 12 Months Life (Compound Return) NAV (Rial) 12 Months Hight Low

Feb. 16, 2010 777 244,415 7.20% 15.00% 4.00% 12.10% 47.60% 2,289,032 2,289,489 1,001,496

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 relatively high level and weaken local currency is also a plus for many companies

Fund’s Composition Metal Ores Mining Telecomunication Banking Basic Metals Chemicals & By-products Other Industries 12

Weight 16.17 15.47 11.56 9.45 8.52 38.83

Iran Market Reporter No. 11 Mar 2012 ( Issue 3, Vol. 2)â€

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Fund | Pishro Mutual Fund Commentary Pishro 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 positive 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 Metal Ores Mining Chemicals & By-products Basic Metals Telecomunication Banking Other Industries en.emofid.comâ€

Pishro Mutual Fund Inception date Working Days Asset under managementM Rials 1 Month 3 Month 6 Months 12 Months Life (Compound Return) NAV (Rial)

Apr. 20, 2011 349 144,817 8.00% 17.20% 6.20% 12.60% 1,126,512

Weight 20.38 18.26 10.01 9.91 9.06 32.38

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

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Commodity | Summary Iran Mercantile Exchange Because of the Iranian New Year holiday, Nowruz, 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 Groups of Product Industrial

Export Ring Domestic Ring

Agricultural Oil & Petrochemical Total

14

Export Ring Domestic Ring

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.

Value (USD)

Percent

Compared to Last Month (USD)

0

0.00%

717,355,147

69.66%

-31.54%

13,975,010

1.36%

-63.62%

39,354,550

3.82%

-69.59%

259,068,829

25.16%

-33.52%

1,029,753,537

100.00%

-39.16%

Iran Market Reporter No. 11 Mar 2012 ( Issue 3, Vol. 2)â€

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News | IPO Initial Public Offering

Tehran Stock Exchange lists Iran Kish Credit Card Co March 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 million shares (equivalent to 10 percent of its total equity shares) at Tehran Stock Exchange. The offered 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 epayment 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 billion March 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.

Company, and Bandar Abbas Oil Refining Company. 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 Investment Company as major companies which are going through the admission process.

Some companies have joined bourse but their shares have not been offered yet including Mellat Insurance Company, Pasargad Oil en.emofid.comâ€

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

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News Largest ME Bourse Exhibition Due in May March 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

16

Ali Saleh Abadi - head of Securities and Exchange Organization

Organization and Islamic Development Bank. He said that both events are welcomed warmly by those involved in the capital markets of Iran and other countries. “Holding such an exhibition is a big step towards developing international financial and monetary activities of the country,” he concluded.

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

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About Mofid Mofid Securities Company is the leading brokerage firm mainly active in Iran 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: imr@emofid.com Important Notice The 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 imr@emofid.com, providing details of your subscription and the number of recipients you wish to forward or distribute this information to. Disclaimer This 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.

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IMR 11 (March 2012)  

Iran Market Reporter (IMR) is an electronic newsletter made by Research Department of Mofid Securities Company in order to keep its readers...

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