Iran Country Report - ACL Asset Management

Iran Country Report - ACL Asset Management

Iran Country Report
Table of Contents
Section I- Economy of Iran ........................................................................................................................... 1
1.1. Country Overview .............................................................................................................................. 2
1.2. Gross Domestic Product .................................................................................................................... 2
1.3. Inflation.............................................................................................................................................. 5
1.4. Exchange Rate ................................................................................................................................... 6
1.5. Trade .................................................................................................................................................. 7
1.6. Natural Resources.............................................................................................................................. 8
1.6.1. Copper ...................................................................................................................................... 9
1.6.2. Iron Ore .................................................................................................................................... 9
1.6.3. Zinc and Lead ........................................................................................................................... 9
Section II- Iran Capital Market ................................................................................................................... 10
2.1. Historical Highlights ........................................................................................................................ 11
2.2. Capital Market Overview ................................................................................................................ 12
2.2.1. Capital Market Structure ........................................................................................................ 13
2.3. Tehran Stock Exchange (TSE) .......................................................................................................... 13
2.3.1. List of Indices .......................................................................................................................... 13
2.3.2. Stock Market Indicators ......................................................................................................... 14
2.3.3. Commissions and Fees ........................................................................................................... 15
2.4. Listed Companies by Market Capitalization .................................................................................... 16
2.5. Sectors Summary ............................................................................................................................ 17
2.5.1. Petrochemicals ....................................................................................................................... 17
2.5.2. Mining and Basic Metals ........................................................................................................ 18
2.5.3. Banking and Financial Intermediaries .................................................................................... 19
2.5.4. Refineries, Oil Derivatives and Services ................................................................................. 20
2.5.5. Holding Companies ................................................................................................................ 21
2.5.6. Telecommunications ............................................................................................................... 22
2.5.7. Auto Industry.......................................................................................................................... 23
2.5.8. Pharmaceuticals ..................................................................................................................... 24
2.5.9. Engineering Companies .......................................................................................................... 25
2.5.10. Cement Industry .................................................................................................................... 26
2.5.11. Food Industries ...................................................................................................................... 27
ii
2.5.12. Computers and Electronics .................................................................................................... 28
2.5.13. Construction Companies ........................................................................................................ 29
2.5.14. Insurance Companies ............................................................................................................. 30
2.5.15. Other Sectors ......................................................................................................................... 31
2.6. Comparison between Iran, Indonesia, Saudi Arabia, and Turkey ................................................... 32
Section III- More About Iran ...................................................................................................................... 34
3.1. A Brief History of Iran ...................................................................................................................... 35
3.2. Iran Power Structure ....................................................................................................................... 36
iii
Section I
Economy of Iran
1
1.1. Country Overview
Population: 77,447,168
Median Age: 28.3 years
Population Growth Rate: 1.2%
Life Expectancy at Birth, Male: 71.5 years
Life Expectancy at Birth, Female: 73 years
Literacy Rate, Adult: 84%
Literacy Rate, Youth: 98%
Surface Area: 1,648,195 sq. km (636,313 sq. miles)
Capital: Tehran
Official Language: Farsi (Persian)
Major Religion: Islam
Ethnic Groups: Persian (61%), Azeri (16%), Kurd (10%), Lur (6%), Baloch (2%), Arab (2%), Turkmen and
Turkic tribes (2%), other (1%)
GDP per capita (PPP): $12,478 (2014 est.)
Monetary Unit: Iranian Rial (IRR); Although all government statistics are given in Rials, in conversation
Iranians refer to Tomans (IRR10=1Toman)
Natural Resources: natural gas, petroleum, copper, iron ore, zinc, lead, manganese, chromium, coal,
sulphur
1.2. Gross Domestic Product
GDP comparison between Iran and MENA countries (plus Turkey, Azerbaijan, Afghanistan, and
Pakistan):
GDP Ranking- 2013
Turkey
Saudi Arabia
United Arab Emirates
Iran
Israel
Egypt
Pakistan
Iraq
Algeria
Qatar
Kuwait
Morocco
Oman
Libya
Azerbaijan
Tunisia
Lebanon
Yemen
Jordan
Bahrain
Afghanistan
47
44
36
34
33
21
0
104
81
75
74
100
291
272
237
223
210
202
183
200
300
745
384
369
400
500
600
Nominal GDP (in Billion USD)- Source: World Bank
2
700
800
820
900
12,000
500
10,000
400
8,000
300
6,000
200
4,000
100
2,000
0
(Trillion Rial)
(Billion USD)
Nominal GDP
600
0
2001
2002
2003
GDP (US$ bn)
2004
2005
2006
2007
2008
2009
2010
2011
GDP (IRR trn)
2012
2013
2014
Source: IMF, April 2014
160,000
7,000
140,000
6,000
120,000
5,000
100,000
4,000
80,000
3,000
60,000
2,000
40,000
1,000
20,000
0
(Thousand Rial)
(USD)
Nominal GDP per capita
8,000
0
2001
2002
2003
GDP per capita ($)
2004
2005
2006
2007
2008
2009
GDP per capita (Thousand IRR)
2010
2011
2012
2013
2014
Source: IMF, April 2014
Iran’s GDP has more than doubled from 2006 to 2011. After the imposition of international sanctions
against Iran in late 2011, the resulting limitations and economic conditions led to the depreciation of the
national currency as well as a sharp fall in the level of nominal GDP. Since the arrival of the new
administration, the country's regulatory and economic climate has improved and domestic and
international forecasts suggest stable and sustainable economic growth in the coming years.
3
GDP (Purchasing Power Parity)
1,200
$974bn
(Billion USD)
1,000
800
600
400
200
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: IMF, April 2014
GDP per capita (PPP)
15,000
$12,478
(US$ at PPP)
13,000
11,000
9,000
7,000
5,000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: IMF, April 2014
Real GDP Growth
10
8.2
8.1
8
6.1
(% Change)
6
4
6.2
6.4
5.9
4.7
4.0
3.7
2.7
1.5
0.6
2
0
-1.7
-2
-5.6
-4
-6
2001
2002
2003
2004
2005
2006
2007
2008
Source: IMF, April 2014
4
2009
2010
2011
2012
2013
2014
GDP Composition
GDP Composition
(by sector)
(by Component)
Household
consumption 45.40%
Agriculture 10.60%
Government
consumption 14.10%
Industry 44.90%
Investment (in fixed
capital & inventories)
32.30%
Net exports of goods
& services 8.20%
Services 44.50%
Source: CIA World Factbook
Source: CIA World Factbook
1.3. Inflation
When the new administration took office in mid-2013, the inflation rate and point-to-point inflation rate
were 37.5% and 44% respectively. In order to lower the inflation rate and its rising trend in recent years,
monetary and budgetary adjustments were implemented by the new administration. According to latest
data provided by Central Bank of Iran, the inflation rate for the 12- month period hit 19.4% in October
2014.
Inflation
(% Change, Year-over-Year)
50
40
30
19%
20
10
0
Apr
2012
Jun
2012
Aug
2012
Oct
2012
Dec
2012
Feb
2013
Apr
2013
Jun
2013
Aug
2013
Oct
2013
Dec
2013
Source: Central Bank of the Islamic Republic of Iran
5
Feb
2014
Apr
2014
Jun
2014
Aug
2014
Oct
2014
1.4. Exchange Rate
The trend in FX rates over the past decade demonstrates that the foreign exchange market had been
relatively stable until August 2011; there had not been much discrepancy between the official exchange
rate and the parallel (open) market exchange rate. However, due to international sanctions and the
consequent imbalance in foreign exchange market, the Central Bank limited the outflow of capital from
the country by depreciating the Rial.
While the parallel exchange rate depreciated by about 50% by the beginning of 2012, the Central Bank
attempted to limit the depreciation of the official exchange rate to 8.5% in order to control inflation
especially in food and pharmaceuticals.
In September 2012, the Central Bank introduced the FX Trading Center to better manage trade finance,
purchase of industrial raw materials and essential factory machineries. After the Presidential elections in
mid-2013, the parallel exchange rate appreciated and Central Bank of Iran unified its two official exchange
rates at the more depreciated official rate from IRR12,260:US$1 to around IRR25,000:US$1. The
Government intends to move towards a single rate of exchange in the near future.
FX Rates
45,000
40,000
(USD/IRR)
35,000
Parallel Rate
30,000
25,000
Official Rate
20,000
15,000
FX Center
Official Rate
10,000
5,000
0
01/01/2009
01/01/2010
01/01/2011
01/01/2012
01/01/2013
Source: Central Bank of the Islamic Republic of Iran
6
01/01/2014
1.5. Trade
Exports vs. Imports
160
Trade Balance
80
145
(Billion USD)
108
88
69
80
78
75
(Billion USD)
113
120
100
67
70
140
99
Exports
67
61
60
Imports
60
50
30
40
20
20
10
41
37
40
38
19
0
0
2009
2010
2011
2012
2009
2013
2010
2011
2012
2013
Source: OPEC
Source: OPEC
Oil exports, which include export of oil, gas and their respective derivatives, account for approximately
70% of Iran’s exports. On the other hand, petrochemical products constitute a large portion of non-oil
exports and the rest are minerals (such as iron ore and copper), cement, foodstuffs (such as nuts, saffron
and caviar), carpets, etc. Primary export partners of Iran are China, India, Japan, South Korea, and Turkey.
Iran’s main imports are: industrial raw materials and intermediate goods, consumer goods, foodstuffs,
vehicles, and technical services.
Iran’s major imports are from U.A.E (intermediary due to sanctions), China, Turkey, India, and South
Korea.
Export of Petrochemical
Products
Export Composition
160
16
140
38
100
80
30
24
60
40
35
34
107
64
83
73
65
(Million USD)
(Billion USD)
120
15.0
14
Non-Oil
Exports
Oil
Exports
12
9.7
10
8
7.6
7.4
2008
2009
10.6
10.7
2012
2013
6
4
20
2
0
2009
2010
2011
2012
0
2013
Sources: OPEC & Trade Promotion Organization of Iran
2010
2011
Source: Trade Promotion Organization of Iran
7
1.6. Natural Resources
The mineral industry holds a very prominent role in the economy of Iran, and especially the hydrocarbon
sector which includes the production of natural gas and oil, the refining of crude oil, and the distribution
of hydrocarbons. Iran is the second-largest proven natural gas reserve holder in the world, behind Russia.
Iran holds 17% of the world's proven natural gas reserves and more than one-third of OPEC's reserves
(EIA, 2014). Iran is the third ranked producer of natural gas in the world (5.7% of the world’s total) and
the world’s fifth ranked producer of crude oil (5% of the world’s total) and condensate (natural gas
liquids). Iran has about 10.6% of the world’s proven crude oil reserves and is ranked fourth after Venezuela
(20%), Saudi Arabia (17.8%), and Canada (11.7%). Furthermore, 2% of the world’s crude oil refining
capacity is located in the country.
Largest Proven Reserve Holders of Natural Gas
Russia
48.8
Iran
34.0
Qatar
24.7
Turkmenistan
10.0
United States
8.7
Saudi Arabia
8.3
United Arab Emirates
6.1
Venezuela
5.6
Nigeria
5.1
Algeria
4.5
0
10
20
30
40
50
60
Proven Reserves (Trillion Cubic Meters)- Source: OPEC, 2014
Largest Proven Reserve Holders of Crude Oil
Venezuela
298
Saudi Arabia
266
Canada
174
Iran
158
Iraq
144
Kuwait
102
United Arab Emirates
98
Russia
80
Libya
48
Nigeria
37
0
50
100
150
200
250
300
350
Proven Reserves (Billion Barrels)- Source: OPEC, 2014
Iran is among the 15 major mineral-rich countries and ranks first in the Middle East and third in Asia, in
terms of mineral reserves. Iran possesses three percent of the world's mineral reserves, and mining
products represent over 30% of the country’s non-oil exports. More than 40 mineral commodities are
8
mined and about 20 metals or mineral-related commodities are refined or manufactured in Iran. The most
important mines in Iran include copper, iron, zinc, lead, and uranium. Other mines include coal, chemical
minerals, salt, sand and gravel.
1.6.1. Copper
According to the United States Geological Survey (USGS), global copper reserves amount to 690 million
tons and copper resources are currently estimated to be about 3.1 billion tons (USGS, 2014).
Iran possesses very large copper resources and some parts of the country are located on the global copper
belt (from southeast to northwest). As of 2013, Iran ranked 12th in terms of copper reserves most of
which are located in Kerman and Azerbaijan provinces. These deposits are estimated to exceed 21 million
tons which constitute over 3% of the world’s known copper reserves. Sarcheshmeh and Miduk mines (in
Kerman), and Songoon (in Azerbaijan) are among the most important copper mines of Iran. Also, Iran is
conducting exploratory operations in order to identify and exploit the potential minerals in several
districts across the country including Azerbaijan, Khorasan, Sistan & Baluchestan, Kerman, Isfahan, and
Yazd provinces. Refined copper production of Iran was totaled 191,000 tons in 2013, which represents
approximately 1% of global copper production.
1.6.2. Iron Ore
Latest findings of United States Geological Survey (USGS) indicate that world reserves of crude ore are
about 81 billion tons of iron contained within 170 billion tons of crude ore. Iran is the world’s 11th ranked
iron ore reserve holder with the iron reserves of 1.4 billion tons contained within greater than 2.5 billion
tons of ore (USGS, 2014). Chadormalu (in Yazd) and Gol Gohar (in Kerman) are the two largest iron ore
mines accounting for more than 80% of iron ore production in Iran. Other iron ore deposits are Choghart
and Mishdovan iron ore mines (in Yazd), Jalal Abad (in Kerman), and Sangan (in Khorasan). In 2013, Iran
ranked 15th in crude steel production with 15.4 million tons of output (World Steel Association, 2014).
1.6.3. Zinc and Lead
In 2013, total reserves of zinc and lead were 250 and 89 million tons respectively. According to the
International Lead and Zinc Study Group (ILZSG), refined zinc production in 2013 reached 12.9 million tons
while refined lead production increased by more than 6% from that in 2012, to 11.2 million tons. During
the same period Iran produced 134,000 tons of zinc, while the amount for lead totaled 76,000 tons. In
terms of zinc & lead mine productions, Iran ranks first in the Middle East and 4th in Asia after China, India,
and Kazakhstan. The lead and zinc mines of Angouran in Zanjan province, and Mehdiabad in Yazd province
are among major mines of the country.
9
Section II
Iran Capital Market
10
2.1. Historical Highlights
1966
1967
1969
1972
1979
1983
1988
1989
1992
1995
1996
2002
2003
2004
2005
2006
2007
2008
2010
2012
2013
The Law for the Establishment of the Stock Exchange was approved by the Parliament (Majles)
The Tehran Stock Exchange (TSE) commenced operation on Feb. 4
Trade of Treasury and Land Reform bills started
Stocks of 23 companies and three bonds were traded at TSE
The Islamic Revolution; The Law for the Administration of Banks was adopted; All private banks
and insurance companies were nationalized; The number of companies listed on the TSE declined
from 105 in 1978 to 56 in 1979
Enactment of the law for Usury-Free Banking to introduce Islamic banking principles; Trading in
bonds was abandoned
Eight-year war between Iran and Iraq came to an end
Post-war reconstruction activities; Rapid increase in trade volume from the beginning of autumn
TSE became a full member of the International Federation of Stock Exchanges
TSE joined the Federation of Euro-Asian Stock Exchanges (FEAS) as one of its founding members
The number of companies listed on the TSE reached 249
Capital market physical development occurred; Principal steps for disclosure of information,
education and development of financial products
Tehran Metal Exchange (TME) was established; Number of TSE listed companies grew from less
than 60 prior to 1990 to 386 in 2003; Listed companies were allowed to issue corporate bonds
Iran Agricultural Commodity Exchange (IACE) was established
New structure; Ratification of new securities market law; The Securities and Exchange
Organization (SEO) was established as the supervisory and regulatory body of Iran capital market
Demutualization of TSE on Dec. 6
Launching Privatization Plan of State-Owned Companies; Establishment of Iran Mercantile
Exchange (IME) after merger of Tehran Metal Exchange with Iran Agricultural Exchange
Establishment of Iran Fara Bourse (IFB) as a separate entity
Approving ‘The Regulations Governing the Foreign Investment in the Exchanges and OTC
Markets”; Launching Futures Market (Single Stock Futures); Starting Online Trading Services;
Being elected as the Chairman of FEAS for a 2-year term
Launching a new derivatives product (Embedded Put Option); Establishment of Iran Energy
Exchange (IRENEX); Establishment of Market Development Fund with the aim of market making
and decreasing the fluctuations in the stock market
Iran Fara Bourse started offering Exchange Traded Fund (ETF); The number of listed companies
on TSE reached 314
11
2.2. Capital Market Overview
Tehran Stock Exchange was founded in 1967 as an equities trading market with 6 listed companies. Since
then, the Iranian Capital Market has evolved to become one of the most comprehensive and established
markets in the region with a number of financial instruments based on Islamic principles. Today the Iranian
Capital Market includes the following:
Equity and Fixed Income Exchanges:
1. Tehran Stock Exchange:
- Market Cap: $106B
- Listed Companies: 314
- Listed Fixed Income Instruments: 21
2. Iran Fara Bourse:
- Market Cap: $31B
- Listed Companies: 202
- Listed Fixed Income Instruments: 37
3. Iran Mercantile Exchange:
- Petrochemical Products and Oil Derivatives
- Metals
- Gold
- Agriculture Products
- Future Contracts
4. Iran Energy Exchange:
- Crude Oil and its Derivatives
- Coal
- Natural Gas
- Electricity
- Carbon Emission Trading
12
2.2.1. Capital Market Structure
The following diagram shows the regulatory structure in Iran Capital Market.
Source: Financial Information Processing of Iran
2.3. Tehran Stock Exchange (TSE)
2.3.1. List of Indices
TEPIX: TSE All-Share Price Index; the main index of Tehran Stock Exchange
TEDPIX: TSE Dividend & Price "total return" Index
Main Board Index: All companies listed in the main board of the main market
Secondary Index: All companies listed in the secondary market
Financial Index: All companies listed in the financial sector (Banks & Investment companies)
Industry Index: All companies listed in other sectors than financial sector
TEFIX: TSE All-Share Free Float Adjusted
TSE 50: 50 top companies listed on the basis of market capitalization and liquidity criteria
TSE 30: 30 top companies listed on the basis of market capitalization and liquidity criteria
Each Sector Index: based on industry classification
IFX: The main index of Iran Fara Bourse
13
TSE Main Index
105,000
90,000
(TEPIX)
75,000
60,000
45,000
30,000
15,000
0
01/01/2009
01/01/2010
01/01/2011
01/01/2012
01/01/2013
01/01/2014
2.3.2. Stock Market Indicators
Indicators
Market Cap
P/E
Total Value Of Trading
Daily Value
Daily Volume
Dividend Payout Ratio
Number Of Trading Days
Number Of Listed Companies
Exchange Rate
Unit
Million USD
Million USD
Million USD
Million shares
%
Days
USD/IRR
2009
65,280
5.81
18,455
76
351
72
240
364
9,979
2010
105,239
7.7
20,569
85
419
80
243
369
10,601
2011
94,524
6.05
16,690
69
304
73
242
348
13,568
2012
65,527
5.35
9,865
41
335
74
239
322
26,058
2013
121,422
7.1
30,284
125
781
72
240
314
31,839
Note: The above table excludes Iran Fara Bourse.
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
140
(Billion USD)
120
100
80
60
40
20
0
(Trillion Rial)
Market Cap.
160
Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct
2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 2014
Billion USD
Trillion Rial
Over the past 3 years, the Tehran Stock Exchange experienced significant volatility. This was due to, both
the devaluation of the Rial and the Presidential elections. The Devaluation of the Rial had a very positive
effect on earnings of Export driven companies such as Petrochemical and Mining Industries. Postelections, optimism superseded the previously subdued sentiment of the market and expectations ran
14
higher. Consequently, P/E ratios expanded rapidly aided by the easing of sanctions and hope of improved
economic relations with the west.
Price-to-Earnings Ratio
9.0
(P/E Ratio)
8.0
7.0
6.0
5.0
4.0
3.0
Apr
2012
Jun
2012
Aug
2012
Oct
2012
Dec
2012
Feb
2013
Apr
2013
Jun
2013
Aug
2013
Oct
2013
Market Cap. by Sectors
Dec
2013
Feb
2014
Apr
2014
Jun
2014
Aug
2014
Oct
2014
Petrochemicals 29.1%
Mining & Basic Metals 16.7%
Banking & Financial Intermediaries 11.2%
Refineries, Oil Derivatives & Services 9.7%
Holding Companies 9.5%
Telecommunications 5.8%
Vehicles & Auto Parts 2.3%
Pharmaceuticals 2.2%
Engineering Companies 2.0%
Cement Industry 1.9%
Shipping & Logistics 1.6%
Food Industries 1.1%
Computers & Electronics 1.1%
Construction Companies 1.0%
Insurance Companies 0.9%
Other Sectors 3.8%
2.3.3. Commissions and Fees
Buy
Trading Fees
Sell
Brokerage Fees
0.4
Maximum Amount Payable
(Million Rial)
200
TSE Commission
0.032
160
0.048
240
SEO Commission
0.032
80
0.048
120
Clearing Fee
0.012
160
0.018
240
Technology Management Fee
0.01
80
0.015
120
Taxes
0
-
0.5
-
Total
0.486
Percent
Percent
0.4
Maximum Amount Payable
(Million Rial)
200
1.029
15
In general, the buyer pays 0.486% of the value of the transaction while the seller receives 0.9897% of
the transaction value.
16
2.4. Listed Companies by Market Capitalization (over 1 billion USD):
Market Cap.
(Billion USD)
12.5
Petrochemicals
5.0
Petrochemicals
4.6
4.3
4.2
4.1
Telecommunications
Mining & Basic Metals
Holding Companies
Rank
Company Name
1
3
4
5
6
Persian Gulf Petrochemical Industry Co.
Tamin Petroleum & Petrochemical Investment
Co.
Marun Petrochemical Co.
Mobile Telecommunication Company of Iran
Mobarakeh Steel Co.
Ghadir Investment Co.
7
Bandar Abbas Oil Refining Co.
4.1
8
9
Telecommunication Company of Iran
Parsian Oil & Gas Development Co.
4.0
3.9
10
Esfahan Oil Refining Co.
3.3
11
12
13
Golgohar Mining & Industrial Co.
Jam Petrochemical Co.
National Iranian Copper Industries Co.
3.2
3.0
2.9
14
Mellat Bank
2.8
Banking & Financial
Intermediaries
15
2.6
Holding Companies
2.5
Mining & Basic Metals
17
Omid Investment Group Corporation
Middle East Mines & Mineral Industrial
Development Holding Co. (MIDHCO)
Mapna Group
2.4
Engineering Companies
18
Pasargad Bank
2.4
Banking & Financial
Intermediaries
19
20
21
22
23
24
Chadormalu Mining & Industrial Co.
Civil Pension Fund Investment Co.
Khouzestan Steel Co.
Zagros Petrochemical Co.
Pardis Petrochemical Co.
Islamic Republic of Iran Shipping Lines
2.4
1.9
1.9
1.8
1.6
1.6
25
Bank Saderat Iran
1.5
26
Tejarat Bank
1.5
27
Parsian Bank
1.5
28
Mines & Metals Development Investment Co.
1.4
29
Tehran Oil Refining Co.
1.4
30
31
32
33
Khorasan Steel Complex Co.
Iranian Investment Petrochemical Group
Kharg Petrochemical Co.
Tose-e Melli Group Investment Co.
1.4
1.4
1.3
1.0
2
16
17
Sector
Petrochemicals
Refineries, Oil Derivatives &
Services
Telecommunications
Petrochemicals
Refineries, Oil Derivatives &
Services
Mining & Basic Metals
Petrochemicals
Mining & Basic Metals
Mining & Basic Metals
Holding Companies
Mining & Basic Metals
Petrochemicals
Petrochemicals
Shipping & Logistics
Banking & Financial
Intermediaries
Banking & Financial
Intermediaries
Banking & Financial
Intermediaries
Mining & Basic Metals
Refineries, Oil Derivatives &
Services
Mining & Basic Metals
Petrochemicals
Petrochemicals
Holding Companies
2.5. Sectors Summary
2.5.1. Petrochemicals
Value
(Billion USD)
41.5
% of
Market
29.1%
P/E
5.86
Total Number
of Companies
49
Number of
Companies in TSE
31
Company Name
Persian Gulf Petrochemical Industry Co.
Tamin Petroleum & Petrochemical Investment Co.
Marun Petrochemical Co.
Parsian Oil & Gas Development Co.
Jam Petrochemical Co.
Zagros Petrochemical Co.
Pardis Petrochemical Co.
Iranian Investment Petrochemical Group
Kharg Petrochemical Co.
Shazand Petrochemical Co.
1
2
3
4
5
6
7
8
9
10
Number of
Companies in IFB
18
Market Cap.
(Million USD)
12,474
5,043
4,677
3,928
3,020
1,841
1,560
1,389
1,344
956
TSE Index vs. Petrochemicals Index
800
700
Return (%)
600
500
400
300
200
100
0
01/01/2011
01/01/2012
01/01/2013
TEPIX
Petrochemicals
18
01/01/2014
Exchange
TSE
TSE
IFB
TSE
IFB
IFB
TSE
IFB
TSE
TSE
19
2.5.2. Mining & Basic Metals
Value
(Billion USD)
23.8
1
2
3
4
5
6
7
8
9
10
% of
Market
16.7%
Total Number
of Companies
63
P/E
6.33
Company Name
Mobarakeh Steel Co.
Golgohar Mining & Industrial Co.
National Iranian Copper Industries Co.
Middle East Mines & Mineral Industrial
Development Holding Co. (MIDHCO)
Chadormalu Mining & Industrial Co.
Khouzestan Steel Co.
Mines & Metals Development Investment Co.
Khorasan Steel Complex Co.
Esfahan Steel Co.
Sabanour Mining & Industrial Development Co.
Number of
Companies in TSE
43
Number of
Companies in IFB
20
Market Cap.
)Million USD(
4,245
3,177
2,939
Exchange
TSE
TSE
TSE
2,567
IFB
2,375
1,885
1,439
1,364
775
431
TSE
TSE
TSE
TSE
IFB
TSE
TSE Index vs. Mining & Basic Metals Indices
1,200
1,000
Return (%)
800
600
400
200
0
01/01/2011
01/01/2012
TEPIX
01/01/2013
Basic Metals
Metallic Ores
20
01/01/2014
Non-Metallic Ores
2.5.3. Banking & Financial Intermediaries
Value
(Billion USD)
16
% of
Market
11.2%
P/E
5.11
Total Number
of Companies
31
Number of
Companies in TSE
15
Market Cap.
)Million USD(
2,763
2,397
1,539
1,529
1,468
834
681
667
464
400
Company Name
Mellat Bank
Pasargad Bank
Bank Saderat Iran
Tejarat Bank
Parsian Bank
EN Bank
Karafarin Bank
Saman Bank
Ansar Bank
Shahr Bank
1
2
3
4
5
6
7
8
9
10
Number of
Companies in IFB
16
Exchange
TSE
TSE
TSE
TSE
TSE
TSE
TSE
IFB
TSE
IFB
TSE Index vs. Banking & Financial Intermediaries Indices
400
350
Return (%)
300
250
200
150
100
50
0
-50
01/01/2011
01/01/2012
TEPIX
01/01/2013
Banks
21
Leasing Companies
01/01/2014
2.5.4. Refineries, Oil Derivatives & Services
Value
(Billion USD)
13.8
% of
Market
9.7%
P/E
5.08
Total Number
of Companies
14
Number of
Companies in TSE
8
Number of
Companies in IFB
6
Market Cap.
)Million USD(
4,106
3,250
1,423
971
709
701
519
447
415
413
Exchange
TSE
TSE
IFB
TSE
TSE
IFB
TSE
TSE
IFB
IFB
Company Name
Bandar Abbas Oil Refining Co.
Esfahan Oil Refining Co.
Tehran Oil Refining Co.
Tabriz Oil Refining Co.
Behran Oil Co.
Lavan Oil Refining Co.
Sepahan Oil Co.
North Drilling Co.
Pasargad Oil Co.
Shiraz Oil Refining Co.
1
2
3
4
5
6
7
8
9
10
TSE Index vs. Petroleum Products Index
1,150
Return (%)
950
750
550
350
150
-50
01/01/2011
01/01/2012
01/01/2013
TEPIX
Petroleum Products
22
01/01/2014
2.5.5. Holding Companies
Value
(Billion USD)
13.5
% of
Market
9.5%
P/E
3.68
Total Number
of Companies
41
Number of
Companies in IFB
21
Market Cap.
)Million USD(
4,126
2,575
1,889
1,022
594
478
362
338
310
283
Company Name
Ghadir Investment Co.
Omid Investment Group Corporation
Civil Pension Fund Investment Co.
Tose-e Melli Group Investment Co.
Pars Aryan Investment Co.
Kharazmi Investment Group
Iran Power Plant Investment Co.
National Investment Company of Iran
Tose-e Melli Investment Co.
Sepah Investment Co.
1
2
3
4
5
6
7
8
9
10
Number of
Companies in TSE
20
Exchange
TSE
TSE
TSE
TSE
IFB
TSE
IFB
TSE
TSE
TSE
TSE Index vs. Holding Companies Indices
700
600
Return (%)
500
400
300
200
100
0
01/01/2011
01/01/2012
TEPIX
01/01/2013
Holding Companies
23
01/01/2014
Investment Companies
2.5.6. Telecommunications
Value
(Billion USD)
8.3
% of
Market
5.8%
P/E
4.93
Total Number
of Companies
2
Number of
Companies in IFB
-
Market Cap.
)Million USD(
4,264
4,029
Company Name
Mobile Telecommunication Company of Iran
Telecommunication Company of Iran
1
2
Number of
Companies in TSE
2
Exchange
TSE
TSE
TSE Index vs. Telecommunications Index
400
350
Return (%)
300
250
200
150
100
50
0
01/01/2011
01/01/2012
01/01/2013
TEPIX
Telecommunications
24
01/01/2014
2.5.7. Auto Industry
Value
(Billion USD)
3.2
% of
Market
2.3%
P/E
14.64
Total Number
of Companies
33
Number of
Companies in IFB
2
Market Cap.
)Million USD(
1,017
773
261
177
156
119
109
96
66
54
Company Name
Iran Khodro Industrial Group
Saipa
Bahman Group
Pars Khodro
Iran Khodro Investment Development
Iran Khodro Diesel Co.
Rena Industrial Group Investment Co.
Zamyad Co.
Sazeh Pouyesh Co.
Niroo Mohareke Co.
1
2
3
4
5
6
7
8
9
10
Number of
Companies in TSE
31
Exchange
TSE
TSE
TSE
TSE
TSE
TSE
TSE
TSE
TSE
TSE
TSE Index vs. Auto Industry Index
400
350
Return (%)
300
250
200
150
100
50
0
-50
01/01/2011
01/01/2012
01/01/2013
TEPIX
Vehicles & Auto Parts
25
01/01/2014
2.5.8. Pharmaceuticals
Value
(Billion USD)
3.1
% of
Market
2.2%
P/E
5.56
Total Number
of Companies
34
Number of
Companies in TSE
27
Market Cap.
)Million USD(
579
317
258
164
139
122
109
100
97
97
Company Name
Tamin Pharmaceutical Investment Co.
Darou Pakhsh Holding Co.
Alborz Investment Co.
Razak Laboratories Co.
Sobhan Pharma Group
Zahravi Pharmaceutical Co.
Farabi Pharmaceutical Co.
Alborz Darou Pharmaceutical Co.
Exir Pharmaceutical Co.
Darou Pakhsh Pharmaceutical Mfg. Co.
1
2
3
4
5
6
7
8
9
10
Number of
Companies in IFB
7
Exchange
TSE
TSE
TSE
TSE
TSE
TSE
TSE
TSE
TSE
TSE
TSE Index vs. Pharmaceuticals Index
400
350
Return (%)
300
250
200
150
100
50
0
01/01/2011
01/01/2012
01/01/2013
TEPIX
Pharmaceuticals
26
01/01/2014
2.5.9. Engineering Companies
Value
(Billion USD)
2.9
% of
Market
2%
P/E
14.54
Total Number
of Companies
5
Company Name
Mapna Group
Mapna Assaluyeh Power Generation Co.
Iran Marine Industrial Co.
Ballast Co.
Techin Co Technical Inspection & Corrosion
Control Co.
1
2
3
4
5
Number of
Companies in TSE
2
Number of
Companies in IFB
3
Market Cap.
)Million USD(
2,442
297
113
25
Exchange
TSE
IFB
IFB
IFB
10
TSE
TSE Index vs. Engineering Companies Index
650
550
Return (%)
450
350
250
150
50
-50
01/01/2011
01/01/2012
01/01/2013
TEPIX
Engineering Companies
27
01/01/2014
2.5.10. Cement Industry
Value
(Billion USD)
2.8
% of
Market
1.9%
P/E
5.08
Total Number
of Companies
36
Number of
Companies in IFB
6
Market Cap.
)Million USD(
431
225
185
120
111
102
91
89
80
80
Company Name
Fars & Khuzestan Cement Co.
Tehran Cement
Mazandaran Cement
Hormozgan Cement Co.
Ilam Cement
Sepahan Cement
Isfahan Cement Co.
Hegmatan Cement Co.
Shomal Cement
Soufian Cement Co.
1
2
3
4
5
6
7
8
9
10
Number of
Companies in TSE
30
Exchange
TSE
TSE
TSE
TSE
TSE
TSE
TSE
TSE
TSE
TSE
TSE Index vs. Cement Industry Index
500
450
Return (%)
400
350
300
250
200
150
100
50
0
01/01/2011
01/01/2012
01/01/2013
TEPIX
Cement Industry
28
01/01/2014
2.5.11. Food Industries
Value
(Billion USD)
1.6
% of
Market
1.1%
P/E
4.41
Total Number
of Companies
43
Company Name
Behshahr Industrial Development Corp.
Minoo Industrial Group
Behshahr Industrial Co.
Pars Minoo Industrial Co.
Margarine Co.
Glucosan Co.
Iran Behnoush Co.
Sabet Khorasan Industrial Manufacturing
Factories
Piranshahr Sugar & Food Products Co.
Hegmatan Sugar
1
2
3
4
5
6
7
8
9
10
Number of
Companies in TSE
32
Number of
Companies in IFB
11
Market Cap.
)Million USD(
380
238
199
74
56
46
39
Exchange
TSE
IFB
TSE
TSE
TSE
TSE
TSE
38
TSE
36
32
TSE
TSE
TSE Index vs. Food Industries Indices
800
700
Return (%)
600
500
400
300
200
100
0
01/01/2011
01/01/2012
TEPIX
01/01/2013
Sugar Industry
29
01/01/2014
Food Industries
2.5.12. Computers & Electronics
Value
(Billion USD)
1.6
% of
Market
1.1%
P/E
7.59
Total Number
of Companies
9
Number of
Companies in IFB
4
Market Cap.
)Million USD(
967
255
117
50
47
44
44
36
36
Company Name
Informatics Services Corporation
Parsian Electronic Commerce Co.
Iran Kish Credit Card Co.
System Group
Data Processing Iran Co.
Fanava Group
Afranet Co.
Iran Argham Co.
Kharazmi IT Development Co.
1
2
3
4
5
6
7
8
9
Number of
Companies in TSE
5
Exchange
TSE
TSE
TSE
IFB
TSE
IFB
IFB
TSE
IFB
TSE Index vs. Computers & Electronics Index
400
350
Return (%)
300
250
200
150
100
50
0
01/01/2011
01/01/2012
01/01/2013
TEPIX
Computers & Electronics
30
01/01/2014
2.5.13. Construction Companies
Value
(Billion USD)
1.5
1
2
3
4
5
6
7
8
9
10
% of
Market
1.05%
P/E
5.52
Total Number
of Companies
25
Company Name
Kayson Co.
Housing Investment Co.
International Construction Development Co.
Shahed Investment Co.
Iran Construction Investment Co.
Toos Gostar Urban Development Investment Co.
Baghmisheh Urbanism Co.
Tehran Housing Investment Co.
ASP Construction
Shahed Development & Construction
Number of
Companies in TSE
12
Number of
Companies in IFB
13
Market Cap.
)Million USD(
448
171
134
121
113
71
61
48
42
41
Exchange
IFB
TSE
TSE
TSE
TSE
TSE
IFB
IFB
IFB
IFB
TSE Index vs. Construction Companies Index
400
350
Return (%)
300
250
200
150
100
50
0
01/01/2011
01/01/2012
01/01/2013
TEPIX
Construction Companies
31
01/01/2014
2.5.14. Insurance Companies
Value
(Billion USD)
1.3
% of
Market
0.89%
Total Number
of Companies
19
P/E
8.17
Number of
Companies in IFB
14
Market Cap.
)Million USD(
145
140
135
118
95
77
77
71
70
68
Company Name
Mellat Insurance
Pasargad Insurance
Alborz Insurance Co.
Parsian Insurance Co.
Asia Insurance
Iranian Reinsurance Co.
Kowsar Insurance
Razi Insurance Co.
Ma Insurance
Arman Insurance
1
2
3
4
5
6
7
8
9
10
Number of
Companies in TSE
5
Exchange
TSE
IFB
TSE
TSE
TSE
IFB
IFB
IFB
IFB
IFB
TSE Index vs. Insurance Companies Index
400
350
300
Return (%)
250
200
150
100
50
0
-50
01/01/2011
01/01/2012
01/01/2013
TEPIX
Insurance Companies
32
01/01/2014
2.5.15. Other Sectors
Value
(Billions USD)
7.6
% Of
Market
5.38%
Total Number
of Companies
170
Number of
Companies in TSE
55
.Market Cap
(Million USD(
2,252
1,224
1,054
788
560
265
Sector
1
2
3
4
5
6
Number of Companies/
Financial Instruments in IFB
115
Shipping & Logistics
Bonds & Certified Deposits
Machineries & Industrial Equipments
Mortgage-backed Securities
Rubber & Plastic Products
Ceramics & Tiles
Total Number of
Companies
11
34
22
35
11
11
TSE Index vs. Other Sectors Indices
800
700
Return (%)
600
500
400
300
200
100
0
01/01/2011
TEPIX
01/01/2012
Rubber & Plastic Products
01/01/2013
Machineries
33
01/01/2014
Industrial Equipments
Ceramics & Tiles
2.6. Comparison between Iran, Indonesia, Saudi Arabia, and Turkey
Population Comparison
300
Population (m)
250
200
150
100
50
0
2001
2002
Indonesia
2003
Iran
2004
2005
Saudi Arabia
2006
2007
2008
2009
2010
2011
Turkey
2012
2013
2014
Source: IMF
GDP (Purchasing Power Parity)
1,600
(Billion USD)
1,400
1,200
1,000
800
600
400
200
0
2001
2002
2003
Indonesia
2004
2005
Iran
2006
2007
2008
Saudi Arabia
2009
2010
2011
Turkey
2012
2013
2014
Source: IMF
GDP per capita (PPP)
35,000
(US$ at PPP)
30,000
25,000
20,000
15,000
10,000
5,000
0
2001
2002
2003
Indonesia
2004
Iran
2005
2006
2007
Saudi Arabia
34
2008
2009
Turkey
2010
2011
2012
2013
Source: IMF
2014
160
140
120
100
80
60
40
20
0
-20
-40
Nov-14
Oct-14
Sep-14
Jul-14
Aug-14
Jun-14
Apr-14
May-14
Feb-14
Mar-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Jul-13
Aug-13
Jun-13
Apr-13
May-13
Mar-13
BIST Index
Jan-13
$1
invested
TSE Index
Feb-13
Return (%)
TSE vs. BIST (Turkey)
(Growth of $1 invested)
(IRR32,590:US$1)
(TRY2.26:US$1)
(IRR32,360:US$1)
(TRY1.78:US$1)
TSE vs. Tadawul (Saudi Arabia)
(Growth of $1 invested)
160
TSE Index
140
120
Return (%)
TSE: $1.99
BIST: $0.80
Tadawul Index
100
80
60
40
20
0
Nov-14
Oct-14
Sep-14
Aug-14
Jul-14
Jun-14
May-14
Apr-14
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Jul-13
Aug-13
Jun-13
Apr-13
May-13
Feb-13
Jan-13
$1
invested
Mar-13
-20
(IRR32,590:US$1)
TSE vs. IDX (Indonesia)
(Growth of $1 invested)
160
140
120
100
80
60
40
20
0
-20
TSE Index
Nov-14
Oct-14
Sep-14
Aug-14
Jul-14
Jun-14
May-14
Apr-14
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Jul-13
Aug-13
Jun-13
Apr-13
May-13
Feb-13
Mar-13
IDX Composite
Jan-13
Return (%)
(IRR32,360:US$1)
(SAR3.75:US$1)
$1
invested
TSE: $1.99
Tadawul: $1.40
TSE: $1.99
IDX: $0.93
(IRR32,590:US$1)
(IRR32,360:US$1)
(IDR9,637:US$1)
35
Section III
More About Iran
36
3.1. A Brief History of Iran
Before
3000 B.C.
2500 B.C.
1500-800
B.C.
530-330 B.C.
330 B.C.
323 B.C.
250 B.C.
A.D. 224
A.D. 642
1051-1220
1220
1335
1501-1722
1795-1925
1926
1935
1941
1979
1980
1980-1988
1989
1997
2005
2013
The Iranian plateau became the cradle of one of the oldest civilizations in history. The ancient
“Shoosh Civilization” or in English “Susiana Civilization” were among the first civilizations to
emerge over 8000 years ago in today’s Khoozestan (southwestern Iran)
The first small wave of Arian migration (Indo-Aryan) to Persia and the beginning of the distinction
between Indo-European tribes
The second Mass Aryan migration wave; The Persians and the Medes, two groups of Aryan
nomads, migrated to the Iranian plateau from central Asia. The Aryans gave Persia its historical
name: Aryana, “The land of the Aryans” from which the name “Iran/Aryan” came
Cyrus the Great founded the Achaemenid (Persian) Empire
Alexander the Great conquered Persia
Alexander died; one of his generals formed the Seleucid Dynasty
Parthian invaders established the Parthian (or Arsacid) Empire
The Sassanids founded the Second Persian Empire
Arabs conquered Persia; Islam became the state religion
Reign of the Seljuks
Mongol Era when Persia conquered by Genghis Khan
The Mongol dynasty collapsed; a succession of minor dynasties followed
The Safavids ruled the Third Persian Empire
Reign of the Qajars
Reza Khan founded the Pahlavi Dynasty
Persia was named Iran
British and Soviet forces invaded; Reza Khan abdicated in favor of his son, Mohammad Reza
Pahlavi
The Islamic Revolution; Ayatollah Khomeini became supreme leader of Iran
Iran became an Islamic Republic; The first president of the Islamic Republic was elected
Iran-Iraq War
Ayatollah Khomeini died and the Assembly of Experts chose Ayatollah Ali Khamenei as the
supreme leader of Iran; Ali-Akbar Hashemi Rafsanjani became president
Mohammad Khatami was elected as president
Mahmoud Ahmadinejad became president
Hassan Rouhani became president
37
3.2. Iran Power Structure
38