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Iran Market

Reporter

ADDRESSING THE NEEDS OF INVESTORS

20

Volume 2 ISSUE 12 DEcEMber 2012 & The Year In Review

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

Top Ranked 2011

The First Ranked Broker in 2007, 2008, 2009, 2010 and Top Mutual Fund Manager in 2009

Mofid Securities Co.

Member of TSE ( Tehran Stock Exchange ) Member of IME ( Iran Mercantile Exchange ) Member of Farabourse

2011

Contact Person: Mr. Seifollahi t 009821 8190 1165 f 009821 8190 1022 e seifollahi@emofid.com w www.emofid.com w www.mofidkala.com


Contents 3

Overview In the latest month of 2012, the TSE all share index (TEDPIX) rose for the fifth consecutive months, increasing its 2012 return to as much as 55.1 percent. The index advanced in eight months during the year and remained in positive territory except in September.

12 Stock

19 Commodity

15

20

TSE total value of trades (Daily Ave.) almost doubled in the month that TEDPIX advanced for 17 percent. Other major indices also increased in December. In FaraBourse, individual investors were more active and boosted the number of trades by 20 percent compared to last month.

Fund Last year, 64 mutual funds of the market had an average return of 32 percent for their investors. Some funds however did better than the index. Pishro and Momtaz –Managed by Mofid- were among top ten funds of the year.

In the last month of 2012, more than 2 million MT commodities were traded in different rings of the IME with the value of some USD 3 billion.

News Last year, 14 new companies were offered to public in both TSE and FaraBourse. 5 newcomers to TSE added USD 4 Billion to its market cap and 9 others increased FaraBourse market cap for USD 2 Billion.

“We wish all of our readers a happy and prospectus new year.” IMR Team

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Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2) en.emofid.com


Overview Developments in Major Economies Boost Confidence in Global Markets

TSE Main Sectors (Nov 2012) INDEX

31-Nov

Monthly Year to Change (%) Date (%)

Metallic Ores Chemicals Petro. Products Vehicles Basic Metals TEDPIX Conglomerates Cement Banks Pharmaceuticals Financial intermediation Real Estates Telecom Foods ex. Sugar Crude Oil (WTI) Copper EURUSD

10,236.70

16.3

81.2

2,053.20

7.7

93.2

79,405.50

6.4

118.9

5,307.20

4.6

-23.9

25,094.40

4.3

78.7

32,339.50

4.0

32.5

3,063.10

3.6

41.3

316.30

-0.5

38.4

289.10

-0.6

-6.9

1,348.00

-0.6

-8.2

644.80

-0.9

12.8

537.90

-1.4

13.5

274.60

-5.2

-16.3

1,052.40

-13.0

26.2

88.78

3.1

-10.4

7,952

2.8

5.5

1.2999

0.3

0.5

Global prices for comparison only

TSE Returns Investors 55.1 Percent for 2012 In the latest month of 2012, the TSE all share index (TEDPIX) rose for the fifth consecutive months, increasing its 2012 return to as much as 55.1 percent. The index advanced in eight months during the year and remained in positive territory except in September.

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Recent reports from the US and China suggest improvements in two largest growth engines of the world. In the US, rival parties finally agreed on a plan which let the economy to avoid the so called fiscal cliff. The new deal set a higher income threshold of 450000 USD for tax hikes. It also extends federal unemployment insurance to almost 2 million Americans for a year. Economic data are also encouraging. Unemployment rate has fallen by two tenth to 7.7 percent, the lowest in three years. GDP growth in the third quarter is raised to 3.1 percent which is better than earlier estimates. Increase in home sales and prices also raised expectations in once a challenging sector. In china, the official Purchasing Manager Index (PMI) for manufacturing sector increased for the third consecutive months while the HSBC PMI is also at fourteen months high. The index remained above 50 in the past two months; suggesting increase in manufacturing activities. Moreover, Chinese new leaders again emphasized on policy of urban development which warmly welcomed by Shanghai stock and commodity markets. Finally, in Japan the LDP won a landslide victory in December elections which pave the way for expansion of fiscal and monetary policies. In response, stocks jumped in Tokyo and the Nikkei climbed above 10000 for the first time since April. Japanese yen also weakened, fell to lowest in 27-month against USD.

Refineries Outperform Main TSE Sectors Stocks of petroleum products producers rose as much as 34.8 percent in December as the refineries positively adjusted prices for feedstock they provide main chemical plants with. The new for-

Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)

3


Overview mula is now based on an exchange rate above the current official rate. Furthermore, speculations rose on possible increase in fuel prices. It is a controversial issue however as the parliament is apparently against the second phase of subsidies reform while its influential figures, like the head of economics commission, point to necessity of increase in fuel price to stop illicit trades over the borders. For the year, the index of refineries is impressively up almost 200 percent, outperforming all main sectors both in December and throughout the year.

Chemicals Rise for Fourth Consecutive Months The index of chemicals rose for the fourth consecutive as restrictions on exports loosened and global prices of key chemical products like urea and ethylene rose. Shares of Kermansha Petrochemical Co., a main urea and ammonia producer, rose as much as 27.4 percent in December as the price of urea rose for the third months. Marun Petrochemicals Co., a main Poly Ethylene producer, is another example which experienced 39.7 monthly increase in its share price. The price of ethylene CFR Southeast Asia rose 9.6 percent this month.

14 percent in December as the level of Shanghai warehouse fell to five months low and the outlook for demand improved. Another report from the World Steel Association confirms expansion in Iranian steel industry. According to the latest issue, production of crude steel increased in November to 1222 million tons which is 12.0 percent compared with the same month last year (Table 1). However, the exchange rate of USD against Rials probably played the key role in performance of sectors like steel and base metal producers. For example, the hot rolled steel is the main source of revenue for Mobarake Steel and its price increased by 67 in Rial terms during the year. Steel billet from Khozestan Steel is another example which almost doubled in the same period. Finally, local prices of copper and zinc are 116 and 72 percent higher respectively while the annual increase in average LME prices is around 10 percent. Steel industry also benefited from the market structure. Steel market is balanced by imports while the local industry has yet to fill a gap of almost 5 million tons (based on latest report from the customs office).

Basic Metals, Metallic Ores More than Doubles Investor’s Money The index of Basic Metals and Metallic Ores rose more than 20 percent this month while for 2012 both sectors almost doubled the money of lucky investors. An official report shows that sales of iron increased by 6 percent to 16.5 million tons during eight months of Shamis year (April through November). Price of 62-percent grade iron ore also rose

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Overview World Steel Production (1000 metric tons) Region World China Japan US India Turkey Iran Saudi Arabia Australia

Nov-2012

MoM (%)

YoY (%)

121,681

-3.5

5.1

57,471

-2.7

13.7

8,498

-3.9

-2.3

6,696

-3.2

-4.8

6,400

-1.7

6.6

2,984

3.9

4.6

1,222

4.8

12.0

437

-6.4

2.4

405

-5.4

12.4

Source: www.worldsteel.org Table 1: Iranian steel production increased 4.8 percent in November.

In 2012, banks lose ground to other sectors though they are still the fourth largest industry in the TSE.

Banks and Auto Industry Still a Drag on TSE Other Sectors Banks shares climbed for the first time in three month after a bank announced that it may sell some assets. Banking industry, once the largest in TSE by market capitalisation, lost ground this year to basic metals and chemical producers. It is still the fourth largest industry and its 5.5 percent annual decline was a big drag on TSE performance. Rising competition, especially after CBI raised rates in January, in addition to the falling long-term deposits in favor of short-term ones are among challenges the banking sector faces.

The index of Telecom industry rose for the first time in three months after the authorities agreed to let the Iran Tele Co., the largest fixed and mobile phones operator, equally charge subscribers in day and night (the cost of services was lower in night). Shares of companies in food industry remained under pressure as horizon for getting official approval for further increase in prices became unclear. The index of food manufacturers, except sugar, fell for the second month but it is still 15.1 percent higher for the year.

Auto industry was another main sector which fell throughout 2012. Carmakers got packages of loans and credit lines and they raised prices two times this year but it seems it was not enough to compensate for falling demand and rising costs.

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Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)

5


| Tehran Stock Exchange

2012 in Review 200.0

Petr. Products, 195.6

150.0

Chemicals, 148.1

Basic Metals, 123.0

50.0

percent (%)

100.0

TEDPIX, 55.1

Cement, 33.3

0.0

Telecom, -6.5

Vehicles, -27.6

-50.0

Jan The Central Bank of Iran (CBI) raised 1Y deposit interest rate by 500 basis points to 17 %.

Feb

Mar

May

Jun

Aug

Sep

Oct

Nov

Dec

Key commodities' prices Encouraging company Refineries benefit after ad- Speculations rises on sharply rise in Iran Mer- earnings fuel the rebound. justment in price setting increase in fuel prices. cantile Exchange (IME), formula. commodity stocks follow.

5Y rate raised from 15% IPO of Parsian Oil & Gas IPO of Iran Kish Credit Card IPO of Saba Noor Steel to 20% and banks were Development Co (POGDC), Co. valued at $240 million. valued at $294 million. allowed to compete on valued at $2.3 billion. rates between 1Y and 5Y.

IPO of Shiraz Oil Refining Co. valued at $227 million.

Cement producers secured IPO of Tehran Oil Refining Vehicle production IPO of Asia Zarin Mine 22% increase in prices. Co. valued at $375 million. increases after months of valued at $39 million. decline.

IPO of Tehran Housing IPO of Isfahan Steel Co. Investment valued at $46 valued at $837 million. million.

IPO of Mellat Insurance Co. valued at $162 million.

6

Parliament limits any Minimum wages officially IPO of Bandar Abbas further increase in energy increased. Oil Refining Co. valued prices. at $1.3 billion.

Jul

Giant auto makers TEDPIX bottomed out on secured a new 1.6 Aug 8. billion USD credit line from the CBI.

IPO of Persian Gulf Transportation valued at 35 million.

P/E declines in response to Automakers secured 9% rising interest rates. increase in prices.

Apr

IPO of Tuka Rail Co. valued at $121 million.

IPO of Zangan Zinc Industry valued at $8 million.

IPO of Shirvan Sugar valued at $33 million.

Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)†en.emofid.com

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Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)

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| Global Markets

2012 in Review 15.0

S&P500 13.4

5.0

GOLD 7.3 COPPER 4.9

0.0

EURUSD 2.0

-5.0 -10.0

percent (%)

10.0

OIL WTI -7.9

-15.0

Jan US unemployment rate unexpectedly falls to 8.5%

Feb US unemployment rate falls to 8.3%.

Mar China reduce GDP target to 7.5%.

Apr

May

Jun

US unemployment rate falls to France’s socialist candidate US unemployment rate 8.2%, payrolls sharply falls to Francois Hollande beats rose to 8.2%. five months low. Nicolas Sarkozy at presidential elections.

Jul

Aug

Commodities rebound Japan exports sharply falls by after EU announces new 8.2%. Industrial production measures to contain crisis, falls by 1.2%. including liquidity injection and fiscal stimulus.

Sep ECB announces that it might unlimitedly buy struggling government’s bonds.

Oct US unemployment rate unexpectedly falls to 7.8%. Q3 GDP rises at better than estimate rate of 2.0%.

Dec

Barak Obama beats republican candidate Mitt Romney at Nov 6 US presidential elections. Uncertainties high over US fiscal Cliff.

Japanese LDP landslide victory pave the way for fiscal and monetary policy expansion. Yen falls, Nikkei climbs above 10000.

Fed pledges to keep rates close Greece parliament passes to zero until 2014. austerity measures.

BHP Billiton points to possibil- Chinese Q1 GDP falls to three ity of decline in iron ore prices. year low of 8.1%

Greece pro-bailout parties EURUSD falls below 1.25, lose seats to radical and anti- Crude oil declines 8.2% in bailout parties. Elections to be one week. repeated as negotiations over making collation fails.

ECB cuts rate by 0.25%.

France downgraded to AA+.

Greece secures 130 billion euros bailout package.

EU Ministers agree on 1 trillion Copper falls 4.5 percept in USD safety net. one week.

US unemployment rate falls to EU Officials agree on 100 8.1%, payrolls at six months billion euro for Spain. low.

China cuts rates for the US unemployment rate rose second times in a month. to 8.3%.

US unemployment rate unexpectedly falls to 8.1%.

Chinese GDP falls to 8.9%.

BOJ unexpectedly expands asset purchases.

Spain bonds yields climbs to 6%.

US Q1 GDP 2.2%, less than estimates.

Australia again cuts rate by 0.25%.

Euro-zone unemployment Fed complains over high rate climbs above 11%. unemployment rate. Bernanke directly points to possibility of another round of monetary stimulus.

German Constitutional court Chinese industrial production, ratifies ESM bailout, allowing retail sales beats estimates. Q3 Germany to increase its contri- GDP slows to 7.4%. bution to 190 billion euros.

Japanese trade balance turns into deficit.

Japanese chip maker Elpida bankruptcy.

IMF raises 430 billion dollar to UK unexpectedly falls to combat EU crisis. recession.

China unexpectedly cuts rate by 0.25%.

Chinese Q2 GDP falls to 7.6%. Inflation sharply falls from 3.0 to 2.2%.

Base metals, gold jump on QE3, ECB, and Germany’s decision.

Francois Hollande beat Nicolas Australia cuts rate from 4.25 Sarkozy at first round of France to 3.75%. presidential elections.

Germany beats Greece 4-2 at Euro 2012 amid tensions over debt crisis and austerity measures.

London 2012 Summer Olympics. UK Q2 GDP falls 0.4%.

Rising tensions between IMF cuts 2012 world growth Japanese PM Yoshihiko Noda China and Japan over disputed rate to 3.3%, the lowest since came under pressure, forced islands. 2007. to announce early elections in mid Dec.

Chinese export growth rate sharply falls.

8

Chines manufacturing PMI Fed pledges to keep rates close Australia cuts rate to 3.25%. falls below 50 for the first time to zero until mid 2015 and in nine months. starts QE3 with 40 billion USD mortgage-backed securities per month.

Nov

Greece pro-bailout parties win second round of parliamentary elections. New Democracy’s Antonis Samaras to make a fragile collation.

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China reveals its young leader, Chinese PMI climbs to seven Xi Jinping who replaces Hu months high. Jintao.

Chinese exports rise more than US payrolls beats estimates, expected, trade surplus at five unemployment rate slightly months high. rises to 7.9%. Home prices, manufacturing index climb. Chinese PMI climbs above 50 for the first time in three months. Exports and imports rose, trade surplus at four years high.

Euro zone unemployment rate Japanese Q3 GDP falls by at 11.3%, continue to rise. 0.9%. Industrial production Spain resists to call for bailout. sharply falls.

Agricultural commodities falls Greece finally secures release on supply, better weather of 34.3 billion euros rescue forecast. fund.

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US unemployment rate unexpectedly falls to 7.7%. ECB reduce estimates for GDP in 17-countries block.

Australia cuts rate to 3.00 %, still the highest in advanced economies. Fed expands the new bondbuying program and pledges to support economy until “significant”improvement in job market. Fed also gives better estimates for unemployment rate.

Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)

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2012 in Review

Basic Metals: Now the Largest TSE Industry

| Facts Sheet

“In 2012, the Basic Metals surpassed the Banking sector to become the largest industry in the Tehran Stock Exchange (TSE). The index includes large steel and base metals producers. Steel producers sell most of their products in domestic markets while base metals producers mostly rely on exports. Revenue is sensitive to both global prices and fluctuations in the local FX market. The Basic Metals was the third best sector this year; more than doubled every dollar invested. Performance of another big industry, Metallic Ores, is related to Basic Metals as the sale price for the two giant iron ore producers is directly liked to steel price.”

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Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)

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

2OTC

Trade Volume (M)

Number of Trades

Number of Trading Days

3,359

11,873

767,755

23

965

2,278

174,137

23

Market

Tehran Stock Exchange Value of Index

High

Low

37,861 37,861 32,742 TEDPIX1 30,322 30,322 26,449 TEDPIX (FM) 59,460 59,529 49,854 TEDPIX (SM) 2 45,169 45,335 39,836 FFI 32,724 32,828 27,663 Industry Index 2,137 2,150 1,838 TEDFIX 30 1TSE Dividend & Price Index (All-share Index)  2Free Float Index

Average

Compared to Compared to last month % last year %

35,025

17.07%

55.16%

28,305

16.09%

47.30%

53,251

20.66%

93.25%

42,410

14.72%

43.98%

29,957

20.04%

72.01%

1,986

17.84%

43.81%

TEDPIX

12

Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2) en.emofid.com


Stock | Market Summary Sector

Market Cap ($M)

Value of Index

Hige

Low

Average

Change

Basic Metals

32,518

31,319.1

32,064.8

14,042.0

18,655.6

123.04%

Chemicals & By-products

19,073

2,637.4

2,676.9

1,061.4

1,525.6

148.11%

Metal Ores Mining

17,561

12,555.8

13,228.6

5,341.5

7,007.6

122.22%

Banking

17,494

293.4

338.4

281.0

299.3

-5.48%

Diversified Industrials (Holdings)

14,242

3,686.0

3,763.7

2,085.1

2,494.4

69.99%

Post and Telecommunications

9,184

306.7

353.5

261.7

302.3

-6.52%

Refined Petroleum Products

8,639 107,037.0 107,536.0

36,208.7

58,349.1

195.61%

Motor Vehicles and Auto Parts

3,752

5,052.3

7,007.8

4,760.3

5,772.3

-27.59%

Cement, Lime & Plaster

3,331

304.8

319.2

215.2

259.6

33.33%

Pharmaceuticals

2,248

1,344.7

1,469.1

1,330.6

1,378.6

-8.47%

Technical & Engineering Services

2,010

206.3

211.7

122.9

143.8

40.44%

Computer & Related Activities

1,884

1,858.8

1,941.9

1,492.6

1,709.1

23.87%

Real Estate And Construction

1,543

545.6

569.6

458.9

522.9

15.13%

Food Products and Beverages...

1,226

960.0

1,261.6

730.4

876.4

15.14%

Transportation and Storage

1,219

707.7

837.1

498.5

646.1

41.43%

Insurance & Pension Funding

722

1,549.6

1,677.0

1,402.0

1,552.3

-0.69%

Sugar & Byproducts

681

3,967.0

4,391.6

2,309.7

3,359.9

65.69%

Oil and Gas Extraction

613

292.7

312.3

168.9

214.0

52.53%

Electric Machinery & Apparatus

611

83,909.7

98,357.8

66,985.6

82,907.5

-14.27%

Machinery & Equipment

392

3,222.7

3,296.9

2,434.5

2,861.9

26.57%

Fabricated Metal Products

351

5,953.3

6,038.8

3,564.7

4,263.8

48.47%

Monetary Intermediation

350

821.1

1,238.1

789.6

965.7

-12.49%

Rubber & Plastic Products

298

4,205.8

4,283.8

2,452.5

3,106.6

70.32%

Other Non-metallic Mineral ...

261

402.0

406.9

284.6

316.0

28.97%

Ceramic & Tiles

229

686.7

831.2

590.2

697.9

-17.38%

Medical, Precision & Optical...

117

1,253.5

1,797.3

1,124.4

1,490.9

-25.61%

Agriculture

55

3,729.1

4,228.4

969.0

1,937.8

232.54%

Paper & By-products

26

1,932.5

2,300.5

1,647.3

1,831.3

3.61%

Coal & Lignite Mining

14

396.2

791.3

364.0

545.0

-43.89%

Wood & By-products

12

13,427.7

13,427.7

9,132.2

10,013.8

39.73%

8

1,378.5

1,378.5

1,198.5

1,308.0

11.61%

37,860.6 23,787.3 27,440.7

55.15%

Other Mining TEDPIX

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140,665 37,860.6

Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)

One Year Trend

13


Stock | Average P/E Highest P/E

Lowest P/E

Sector Refined Petroleum Products

Average P/E

Market Weight

10.55

6.13%

Sector

Average P/E

Market Weight

Banking

4.03 12.42%

Metal Ores Mining

7.99 12.47%

Cement, Lime & plaster

4.34

2.37%

Basic Metals

6.13 23.09%

Technical & Engineering Services

4.57

1.43%

Post and telecommunications

5.42

Computer & Related Activities

4.78

1.34%

Diversified Industrials (Holdings)

5.29 10.11%

Real Estate And Construction

4.94

1.10%

14

6.52%

Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)†en.emofid.com


Fund | All Funds Overview Last year, 64 mutual funds of the market had an average return of 32 percent for their investors. Some funds however did better than the index. Pishro and Momtaz—Managed by Mofid—were among top ten funds of the year.

Top 10 Best Funds of Month Working Days

NAV (Rial)

702 2,634,130 Sina 1,264 6,450,649 Boursiran 1,032 3,116,490 Maskan Bank 676 2,134,009 Aghigh 1,609 7,581,525 Agah 1,739 4,111,145 Saderat Bank 2 623 1,728,384 Pishro 1,675 3,562,889 Arian 764 2,320,796 Tadbirgaran 1,051 3,358,629 Momtaz2 All Funds Index3 1USD to Rial exchange rate: 12,260

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Asset Under Man- Last Month Last 6 Last 12 Since Inception agement (USD)1 (%) Months (%) Months (%) (Compound Return) 2,739,804

19.90

63.90

113.00

65.60

33,877,977

26.80

75.10

110.40

71.40

1,618,189

20.20

68.70

96.50

49.50

3,312,969

24.10

78.00

96.30

50.70

4,054,812

21.60

58.40

89.10

58.40

5,156,036

24.50

74.80

83.80

34.60

12,886,052

19.50

58.90

79.80

37.90

1,015,661

15.70

53.50

74.60

31.90

1,801,713

29.40

59.70

74.00

49.30

16,322,512

18.80

54.30

68.70

52.40

14.20

22.10

31.90

2Managed

by Mofid

3Including

64 Mutual Funds

Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)

15


Fund | Pishtaz Mutual Fund Commentary Last month Tehran Stock Exchange main index (TEDPIX) had a rise of 17 percent compared to November. TSE finished 2012 at its historical high 37,860 and rose by 55 percent in this year. In 2012, Pishtaz rose by more than 67 percent and outperformed TEDFIX30 with 44 percent rise along with TEDPIX. However, it was ranked the 11th for its one-year performance. Pishtaz is a small fund and has USD 6 Million asset under management. It is also one of the oldest funds of the market and next may will enter its 6th year of activity. In December, we raised our positions in basic metals, such as Iranian National Copper Industry (I.N.C. Ind), from 6.18 percent of the fund to 9.44 percent. INC Ind [MSMI] is the largest producer of Copper in Iran with more than 235,000 MT of copper cathode production.

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 1,699 73,949 18.30% 38.40% 56.90% 67.20% 50.70% 6,739,208 6,818,537 4,027,793

Our strategy is to keep our portfolio balanced and keep our positions in rising sectors; also we are not so positive about the next month market so we try to cash some of our positions in January.

Fund’s Composition Chemicals & By-products Metal Ores Mining Basic Metals Holdings Farabourse Other Industries

16

Percent 21.34 20.80 9.44 6.92 4.74 36.76

Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)†en.emofid.com


Fund | Momtaz Mutual Fund Commentary Momtaz outperformed 17 percent rise of TEDPIX with 18.8 percent increase in December. It also set a new high record of 3,384,819 Rial in December. In 2012, Momtaz rose by 68.7 percent and ranked the 10th for its one-year performance. Momtaz is one of the largest funds of the market with USD 16 Million asset under management. In December, we increased our positions in chemical and by-products sector as we expect a bullish market in this sector in the following three month. We will keep our portfolio balanced in the following months and cash some of our not positive shares. We hope to continue this growth in the following month.

Fund’s Composition Chemicals & By-products Metal Ores Mining Basic Metals Holdings FaraBourse Other Industries

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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 1051 200,114 18.80% 37.70% 54.30% 68.70% 52.40% 3,358,629 3,384,819 1,990,052

Percent 28.81 20.91 11.51 7.67 6.40 24.70

Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)

17


Fund | Pishro Mutual Fund Commentary Pishro is leading our funds with 19.5 rise in December and 80 percent in 2012. It stands the 7th best mutual fund of the year for its performance. In December Pishro set a new life time record and its NAV reached 1,744,040. We have expanded our positions in Basic Metals from 6 to 11 percent of the fund as we believe this sector has a good potential of rising in the following three months. Our strategy is to keep our portfolio balanced and keep our positions in rising sectors; also we are not so positive about the next month market so we try to cash some of our positions in January.

Fund’s Composition Chemicals & By-products Metal Ores Mining Basic Metals Holdings FaraBourse Other Industries 18

Pishro 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

Apr. 20, 2011 623 157,983 19.50% 39.80% 58.90% 79.80% 37.90% 1,728,384 1,744,040 960,756

Percent 25.56 16.11 11.25 6.45 5.09 35.54

Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)†en.emofid.com


Commodity Iran Mercantile Exchange Summary In the last month of 2012, more than 2 million MT commodities were traded in different rings of the IME with the value of some USD 3 billion. The total transaction value almost doubled in December compared to the prior month, due to USD 1.8 billion steel trade value. The price of steel products has been falling in the last two months due to overload of warehouses and seasonal decrease in demands. In December buyers found the prices more attractive and stocked up around 1.5 million metric tons of different kinds of steel products. Agricultural ring has been inactive in the last two months due to some talks over the pricing formula of commodities with authorities.

Groups of Products

Type

Value (Rials)

Industrial Export Ring and Mineral Domestic Ring Total

Value (USD)

Volume (MT)

488,639,550,000

39,856,407

250,000

25,677,817,976,000

2,094,438,660

1,493,273

26,166,457,526,000

2,134,295,067

1,743,273

Agricultural Export Ring Domestic Ring Total

0

0

0

0

0

0

0

0

0

Oil & Petro- Export Ring chemical Domestic Ring Total

71,928,675,000

5,866,939

25,000

10,598,110,236,000

864,446,186

569,321

10,670,038,911,000

870,313,125

594,321

Total

36,836,496,437,000

3,004,608,192

2,337,594

Industrial and Mineral Agricultural Oil & Petrochemical Export Ring Oil & Petrochemical Domestic Ring

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Special Report Mofid Commodity Index (MCI) Mofid Commodity Index (MCI) is developed to track global prices of a number of key commodities to which the revenue of Iranian commodity stocks are sensitive to. Indeed, five commodities included in MCI let the index indirectly follow prices of eleven key products which together cover 80 percent of sales in main TSE industries: Basic Metals, Chemicals, Metallic Ores, and Petr. Products. MCI uses prices in local currency (Rial) instead of

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USD, allowing the index to reflect real trends and fluctuations which directly affects the profits of companies. MCI composition is showed in this pie chart. Weights are determined on the basis of annual sales, so they are subject to possible adjustments at the end of each year. MCI also includes three sub-indexes allowing to concentrate on respective industries. The chart below shows performance of the indexes during 2012.

Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2)†en.emofid.com


News | IPO December 31, 2012  Source: emofid.com

Total amount of USD 445M were offered publically in 2012 in both TSE and FaraBourse. More than 50 percent of this number was offered by POGDC, a major petrochemical holding active in investment of the oil, gas and petrochemical industries. POGDC [PASN] shareholders profited from its 240

percent rise since IPO day. Some USD 6,000M were added to TSE and FaraBourse Market Cap through last year’s IPOs; USD 4,072M to TSE by 5 issuers and USD 1,980M to FaraBourse by 9 issuers. Larger organizations tend to be listed in TSE as it is a larger market.

2012 IPO Review COMPANY

DATE

Asia Zarrin Mine Zangan Zinc Industry Tehran Oil Refining Mellat Insurance1 Shiraz Oil Refining Bandar-Abbas Oil Refining1 TukaRail Saba Noor Steel Iran Kish Credit Card1 Parsian Oil & Gas Development (P.O.G.D.C)1 Esfahan Steel Shirvan Sugar Tehran Housing Investment Persian Gulf Transportation 1Covered in IMR issues

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24 December 2012 19 November 2012 10 October 2012 09 July 2012 04 July 2012 24 June 2012 24 April 2012 16 April 2012 13 March 2012 15 February 2012 08 February 2012 07 February 2012 11 January 2012 08 January 2012

MC at IPO IPO Day (M$) size

Market

$39 10% Farabourse $8 10% Farabourse $375

5% Farabourse

$162 10% TSE $227 $1,285 $121

5% Farabourse 5% TSE 5% Farabourse

$294 10% Farabourse $240 10% TSE $2,350 10% TSE $837

3% Farabourse

$33 10% Farabourse $46 10% Farabourse $35

5% TSE

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Initial Public Offering (IPO)

2012 IPO Review


News Tehran Stock Exchange 2012 Statistical Digest December 31, 2012  Source: TSE.ir

The main index of TSE gained more than 55 percent last year. TEDPIX (price and dividend index) was 24403.1 at the beginning of 2012 and closed at 37860.6 at the end of December. The market capitalization grew about 44 percent in 2012 and finally reached IRR 1726.7 trillion. Total value of shares and rights trading in the year amounted above IRR 218 trillion, which is slightly (2.1 percent) more than the value in 2011. The volume of equity trading had about 7.2 percent growth last year comparing the figure in 2011 and

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stood above 74.85 billion shares. The rising trends in 2012 also included number of equity trades with about 12 percent comparing 2011, pushing the figure to nearly five million. Although 5 IPOs were accomplished last year at TSE, the total number of listed companies shrank, due to some of the previously listed ones’ transfer to Iran FaraBourse (Iran’s OTC and SMEs Exchange). At the end of 2012 TSE had 322 listed companies

Iran Market Reporter No. 20, Dec 2012 ( Issue 12, Vol. 2) en.emofid.com


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About Mofid 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: imr@emofid.com

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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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