December 2018 - Volume 13, No 144
Summary
Equity Markets The TEDPIX index and junior Farabourse (IFB) market lost 11% and 12% respectively in IRR terms over the month. Based on the unofficial exchange rate, the month-on-month gains in dollar terms accelerate by 17% in TSE and by 16% in Farabourse market. This was mainly due to 24% appreciation of IRR exchange rate over the month.
Debt Markets From the start of the Iranian calendar year (March 2018) to end-November, total issuance on the fixed income market reached 2.6 billion US$ based on the unofficial exchange rate. Yield to maturity (YTM) remained stable at 24.2% at the end of November.
Economic Review This issue reviews the latest updates from Tourism sector and Central Bank report on the inflation. In addition, we have included a separate report covering the latest macroeconomic data published by relevant organizations and senior macroeconomic strategists in a fact-sheet summary, as well as an economic calendar released by local and international statistics centers.
1 Iran Investment Monthly Table of Contents 3 Market Overview 3 Market Insight
4 Performance & Updates
7 Sector Insight
10 Company Overview
11 Market Snapshot
12 TSE & Junior Market Performance
13 Top Ranked Companies
14 TSE Statistics
14 FX Movements
15 Iran’s Fixed Income Market 17 Economic Review
17 Latest Updates
18 Macroeconomic Data 19 Turquoise Partners
19 About Turquoise Partners
24 News & Views
2 Iran Investment Monthly Market Overview Market Insight December 2018 - Volume 13, No 144
Portfolio Manager Comments
The Tehran Stock Exchange had a very challenging month in November with performance hitting lows not seen since October 2008 as the overall index slid by 8.6% in Euro terms. Volatility in global commodity prices and in particular the drop in the price of Oil contributed to the sell off we experienced in the Iranian equity market in November. On the currency side, unofficial and official rates (CBI Market Rate), Rial value appreciated by the most in 2018 on a monthly basis versus Euro, 23% and 2.3% percent respectively.
A stronger currency is usually considered to be seen as a negative factor for the equity holders as the profitability of many large blue-chip listed companies are heavily relied on exports. Furthermore, this stronger Rial translates to a less competitive advantage for Iranian exporters who are Shervin Shahriari Chief Investment Officer already suffering from US sanctions’ restrictions and a decline in global commodity markets.
Petroleum products and chemicals were the worst performers in November losing 18% and 12% of the value of their sub-indices. However, defensive sectors such as telecoms performed very well and increased by 13% in Euro terms.
According to our currency projection model which takes in to account all the hard currency inflows and outflows, Rial appreciation has run its course for the time being. Therefore, we do not expect any significant further currency appreciation in the short run if the current assumptions which include i.e. oil prices and the amount of oil Iran is able to export due to the re-imposing of sanctions. With all of these considerations in mind, we believe the pullback in the equity market to be short lived as the correlation between two markets is very strong.
3 Iran Investment Monthly Market Overview Performance & Update December 2018 - Volume 13, No 144
Performance & Updates
Summary - November 2018 Market Capitalization (billion US$) 72 TSE & Farabourse Junior Market Free Float 22% TSE & Farabourse Junior Market Number of Listed Companies1 594 TSE & Farabourse Junior Market TSE Index Performance (US$) 17.0% (MTD) -37.1% (YTD) TSE Total Turnover (million US$)2 1,441 m$ TSE & Farabourse Junior Market Dividend Yield (%) 10.7% TSE P/E (ttm) 9.3
1 168 companies are listed in Over-The-Counter (OTC) or off-exchange market named as “Base Market” in Farabourse junior market which trading of these companies are done directly between two parties. 2 Calculated based on unofficial IRR per US$ exchange rates. 3 Calculated based on the latest market data ending 1396 Iranian calendar year. 4 TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index) The TEDPIX index and junior Farabourse (IFB) market lost 11% and 12% respectively in IRR terms over the month. Based on the unofficial exchange rate, the month-on-month gains in dollar terms were 17% on the Tehran Stock Exchange (TSE) and 16% on the Farabourse market. The Rial exchange rate against USD declined by 24% during November.
The TSE’s total trading volume declined by 50% reaching 862 million US$ in November based on the unofficial exchange rate. Trading on the IFB fell by 36% on a monthly basis at 580 million US$, based on the unofficial rate. The total number of shares traded on the TSE declined by 50% reaching 38 billion shares, and on the Farabourse market decreased by 42% to 14 billion shares.
Tehran Stock Exchange & Junior Market Trade by Value1 - November 2018
Iran Farabourse (Junior Market) Trade Volume (million US$)
Tehran Stock Exchange (Main Market)Trade Volume (million US$) US$ Million
Source: Tehran Stock Exchange Iran Farabourse Company All figures in US$ are converted from IRR at the unofficial rate 1 Trading volume month on month in US$ term - TSE includes mainly equity while Farabourse has more fixed income instruments and smaller equities.
4 Iran Investment Monthly Market Overview Performance & Update December 2018 - Volume 13, No 144
Tehran Stock Exchange Trade by Value
Monthly Change Total: -50% Average: -39% November Total: 862 million US$ Average: 48 million US$ No. Trading Day: 18
October Total: 1,748 million US$ Average: 79 million US$ No. Trading Day: 22 US$ Million
Tehran Stock Exchange Trade by Volume
Monthly Change Total: -50% Average: -39% November Total: 38,275 million shares Average: 2,126 million shares No. Trading Day: 18
October Total: 77,357 million shares Average: 3,516 million shares No. Trading Day: 22 Shares
Million
Source: Tehran Stock Exchange All figures in US$ are converted from IRR at the unofficial rate
5 Iran Investment Monthly Market Overview Performance & Update December 2018 - Volume 13, No 144
Junior Market Trade by Value
November Monthly Change Total: 580 million US$ Total: -36% Average: 32 million US$ Average: -22% No. Trading Day: 18
October Total: 910 million US$ Average: 41 million US$ No. Trading Day: 22 US$ Million
Junior Market Trade by Volume
Monthly Change Total: -42% Average:-28% November Total: 14 billion shares Average: 781 million shares No. Trading Day: 18
October Total: 24 billion shares Average: 1082 million shares No. Trading Day: 22 Shares
Million
Source: Iran Farabourse Company All figures in US$ are converted from IRR at the unofficial rate
6 Iran Investment Monthly Market Overview Sector Insight December 2018 - Volume 13, No 144
Sector Insight - November 2018
206.9 Oil & Gas Extraction and Related Services Except Surveying 190.0 Metal Ores Mining 170.8 Agriculture 144.5 Wood & By-products 124.0 Coal & Lignite Mining
% Sector 24 Motor Vehicles and Auto Pars Performance1 18.2 Publishing Printing & Reproduction of Media 17 Financial leasing 17 Financial Intermediates 16 Tanning and Dressing of Leather
26.5 x Fabricated Metal Products except Machinery & Equipment’s 22.0 x Motor Vehicles and Auto Pars 17.7 x Electric Machinery & Apparatus 15.9 x Monetary Intermediation - Banks 14.7 x Metal Ores Mining
10.0 x Chemical & By Products 9.4 x Insurance & Pension funding Except P/E Compulsory Social Security 8.7 x Basic Metals 8.1 x Pharmaceuticals 6.5 x Financial leasing
36% Motor Vehicles and Auto Pars -1% Metal Ores Mining -5% Computer & related activities -6% Rubber & Plastic Products -7% Electric Machinery & Apparatus
-57% Insurance & Pension funding Except Compulsory %Trading Social Security Value2 -57% Cement, Lime & Plaster -58% Refined Petroleum Products & Nuclear Fuel -62% Investment Companies -66% Machinery & Equipment
Source: Tehran Stock Exchange, Note: Sectors with more than 4 companies included (exp. Telecommunication) 1Growth of sector’s index month on month in IRR term. 2Growth of trading volume month on month in US$. Unofficial rates are applied.
7 Iran Investment Monthly Market Overview Sector Insight December 2018 - Volume 13, No 144
Sector Insight: Construction & Housing
Construction & Housing
The construction and housing sector is directly related to more than 120 sub-sectors and businesses, with an over 50% localization rate in terms of industrial space and over 90% localization in material. Historically, especially over the past 30 years, the housing market used to be a safe haven for investment when other sectors were out of favour or in recession. Even today when there are more developed financial markets such as fixed income or equity market, the traditional strategy of many Iranian households is to invest in a residential or commercial property in prime locations of the city. Over the past three decades, the share of the construction and housing sector in the economy has remained between 3% and 9% of nominal GDP.
• Construction sector contribution to GDP (2018): 5.1% • Construction sector market share on TSE: 27,351 Billion IRR (0.4% of TSE market) • Construction sector market share on Farabourse: 27,062 Billion IRR (1.2% of IFB market) • Share of the sector in facilities extended by the banking sector: 9% (March 2018 to October 2018)
The CBI data on the number of transactions in housing units in Tehran shows that the housing market has reached its peak over the past two years. In October 2018, the average price per square meter increased by 83% compared to the same period last year with a 32% decline in the number of transactions over the same period. The reason behind this decline is that prices in the housing market are adjusting along with other asset classes such as dollar and gold market.
Average Price of one square meter apartment in Tehran
9.550 Ten Thousand IRR Ten
Source: CBI
8 Iran Investment Monthly Market Overview Sector Insight December 2018 - Volume 13, No 144
Top TSE Sector Market Capitalization (%) - November 2018
3% 9% Computer & Related Activities Refined Petroleum
15% 6% Basic Metals Diversified Industrials
3% 15% 9% 6% 25% 6% 19% 10% 6%
10% 6% Metal Ores Mining 25% Telecommunications Chemicals 6% 19% Monetary Intermediation Other
TSE & Real State and Construction
Real State and Construction TSE Overall Index Normalised in US$
Source: TSE Calculated based on unofficial IRR per US$ exchange rates from April18.
9 Iran Investment Monthly Market Overview Company Overview December 2018 - Volume 13, No 144
Company Overview Housing Investment Activity : Real Estate and Construction
Price (Cents) 902 Date: 30 Nov 2017-31 Nov 2018 1 52wk range (Cents) 705-902 Unofficial US$-IRR 117,000 Ticker MSKN1 Industry Real Estate and Construction Market TSE Source: Tehran Stock Exchange, 1 This exchange rate has been used in this table to convert figures from IRR to US$. It should be noted that this exchange rate is subject to fluctuation
( as of 28 November 18) Performance Stock Data Market cap billion US$ 0.04 TSE Overall Index & Housing Investment Shares outstanding billion 6 Housing Investment Free float 23% Overall Index Financial year end 21-Dec Ave daily value traded ($) 28,547
Ave daily volume traded million shares 3 P/E 9.07
Key Data March March March (Million US$) 2018 2017 2016 Revenue 107 88 130 Net Profit -11 14 43 Normalised Index in US$ EPS (Cents) 0.2 0.2 0.7 Normalised Index, adjusted for dividends and share capital increases Highlights Exchange Rate • Largest construction company in Iran in terms of real estate project value. March March March 2018 2017 2016 • Housing Investment Co. has 6 subsidiaries listed on the Iran Farabourse IRR 41,880 39,750 36360 Market and has stated plans to list all its remaining subsidiaries in the capital markets. Key Ratios March March March • The company launched Iran’s first two construction mutual funds, raising 2018 2017 2016 more than 10m$. P/B 0.6 0.6 0.4 P/Sales 7.6 3.8 3.8 • The company has built 67,000 residential units in 350 construction ROA -2.7 3.6 11.5 projects in various cities and urban areas. Its projects have also included ROE -7% 8% 26% education complexes, water pipelines, roads and highways. Source of data: Company Financial Reports Company Information Founded in 1990, Housing Investment Company is one of the largest construction companies Major Shareholders in Iran, active in building residential complexes, villas, apartments, high-rise buildings and Bank Maskan Financial Group 46% commercial-administrative development projects across the country. It has a diversified group of subsidiaries across the country (16 active subsidiaries in 28 districts). Kharazmi Investment Co. 14%
Address: No. 8, Shahnazari Street, Madar Square, Mirdamad Blv. Tehran, Iran. Tosee Meli Investment Company 12% Telephone:+98 (21) 2291 3608 Website: www.maskanco.irWebsite: www.ikco.ir
Source: Firouzeh Asia Brokerage, Turquoise Partners 10 Iran Investment Monthly Market Overview Market Snapshot December 2018 - Volume 13, No 144
Market Snapshot - November 2018 Iran & Regional Markets
Iran: A 20 Year Snapshot, Asset Class Returns in US$ P/E Multiple Comparison Stock MSCI Morocco 18.5 Housing Market Kuwait 14.6 Gold Qatar 14.7 MSCI Arabian Markets 13.3 MSCI GCC Countries 13.4 MSCI Egypt 9.3 Saudi Arabia 14.6 UAE 9.7 Iran 9.3 Normalised in US$ (%) Turquoise Iran Fund 7.4 Sub Fund B/C, as of ending November 2018 TEDPIX Tehran Exchange Dividend Price Index Note: Calculated by the unofficial exchange rate
Iran & International Markets
3 4 Tehran Stock Exchange MSCI Emerging Markets MSCI Frontier Markets
Average P/E Average P/E Average P/E 9.3 x 12.5 x 13.1 x 1 1-Year Performance in $ 1-Year Performance in $ 1-Year Performance in $ -36.9% -8.8% -11.0% Annualized 10 Year in $ 2 Annualized 10 Year in $ Annualized 10 Year in $ 2.9 % 9.5% 4.3%
25.2 Chemicals 25.7 Information Technology 44.7 Financials 15.2 Basic Metals 24.7 Financials 12.5 Telecommunication 10.1 Metal Ores Mining 8.8 Consumer Discretionary 9.4 Consumer Staples 9.1 Refined Petroleum 8.2 Energy 9.1 Real Estate 6.4 Monetary intermediation 7.5 Materials 6.1 Energy
Sector Breakdown (%) 34.0 Others Sector Breakdown (%) 25.19 Others Sector Breakdown (%) 18.37 Others
1.TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index) performance calculated in US$ for the Period of November 2017 to November 2018 2.TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index)10 year annualized performance calculated in US$ 3.MSCI Emerging Markets Index (US$) - November 2018 4.MSCI Frontier Markets Index (US$) - November 2018 Source: Tehran Stock Exchange - Central Bank of Iran - MSCI Inc., Kamcoonline. All figures in US$ are converted from IRR at unofficial rate, unless otherwise indicated. 11 Iran Investment Monthly Market Overview TSE & Junior Market Performance December 2018 - Volume 13, No 144
TSE & Junior Market Performance Tehran Stock Exchange: TEDPIX*, November 2018
Normalised in US$ Normalised in US$
Volume million shares Million Shares
Source: Tehran Stock Exchange *TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index) All figures in US$ are converted from IRR at the unofficial rate, unless otherwise indicated.
Iran Farabourse (Junior Market): IFX*, November 2018
Normalised in US$ Normalised in US$
Volume million shares Million Shares
Source: Iran Farabourse Company *Iran Farabourse (Junior Market) Overall Index (Total Return) All figures in US$ are converted from IRR unofficial rate, unless otherwise indicated.
12 Iran Investment Monthly Market Overview Top Ranked Companies December 2018 - Volume 13, No 144
Top Ranked Companies - November 2018 Turnover Value* % Total Turnover (million US$)
Tejarat Bank Tejarat Bank was founded in 1979 after the implementation of the Banks Nationalization 3.9 0.14% Act and the subsequent integration of five domestic commercial banks and six multi- national banks. In 2009, the bank was partially privatized, with the Iranian state remaining as a minority shareholder.
Mellat Bank Mellat Bank was established in 1979 with the merger of ten pre- 2.2 0.08% revolution private banks in Iran. From the outset, the operations of the bank have included various commercial banking services.
SAIPA is the second largest Iranian vehicle manufacturer. The company was established in 1966, with 75% Iranian Saipa 1.7 0.06% ownership, to assemble Citroëns under license for the Iranian market. Currently, it builds mainly Korean cars, but also has developed its own engine and range of cars.
Mobarakeh Steel Company, one of the largest Mobarakeh Steel industrial complexes in the country, started its Manufacturing 0.06%
Top 5 Traded by Value Traded 5 Top operations in 1991 with a nominal capacity of 2.4 1.7 million tons per annum. Mobarakeh Steel is the largest steel producer in the Middle East and North Africa region.
Founded in 2003 and privatized in 2009, the company is active in telecommunications and Hi Web 0.04% provides internet services across the country. 1.1 It has a government contract to provide high speed internet services to 25,000 villages across Iran over 10 years. In 2017, HiWeb was listed on the Tehran Stock Exchange. Market Cap % Total Market Cap. (million US$) Persian Gulf PGPIC was established in the first phase of the privatization of Iran’s Petrochemical 2.6% petrochemical sector when the National Petrochemical Company (NPC) 3,844 transferred its shares in a number of petrochemical companies to PGPIC, Industry paving the way for the formation of Iran’s first private petrochemical holding company. NPC has continued in its role as a policy making body.
Mobarakeh Steel Mobarakeh Steel Company, one of the largest industrial 2.2% complexes in the country, started its operations in 1991 with Manufacturing 3,234 a nominal capacity of 2.4 million tons per annum. Mobarakeh Steel is the largest steel producer in the Middle East and North Africa region.
Founded in 1991, Golgohar Mining & Industrial Company Golgohar Mining & is one of the largest iron ore and iron pellet producers in 1.4% Iran. The company operates in combined plants among Industrial Company 2,124 six iron mine zones about 55 km southwest of Sirjan city near Kerman province.
In 1972, Sarcheshmeh Copper Mines Joint Stock Co of Kerman was established and, later, in 1976, it was renamed National Iranian 1.3% to National Iranian Copper Industries Co. to cover all copper Copper Ind. Co. 1,928 mines operations throughout the country. This company is active in the extraction & utilization of copper mines, production of copper concentrates & manufacturing copper products.
Top 5 by Market Capitalization Top Pars Petrochemical Co. manufactures and markets petroleum and petrochemical products. The company Pars Petrochemical offers ethane, propane, butane, ethyl benzene, and 1.2% ethylene. The company was founded in 1998 and Company 1,707 is based in Asaluyeh, Iran and was listed in 2018. Pars Petrochemical Co. Operates as a subsidiary of Persian Gulf Petrochemical Industry Co.
Source: Tehran Stock Exchange, Firouzeh Asia Brokerage. All figures in US$ are converted from IRR at the unofficial rate. *eekly W data as of trading week ending 28 November 2018 . 13 Iran Investment Monthly Market Overview TSE Statistics December 2018 - Volume 13, No 144
TSE Statistics - Day Ending 31 November 2018 Highest Daily Traded Sectors with Highest Daily Change
Company Volume (m Shares) Value (m$) Index Value % Change 28-Nov-18 Company 28-Nov-18 20-Nov-18
Tejarat Bank 383 10.8 Automotive 19612 3
Mellat Bank 114 6.2 Other Financial Services 2,537 4
SAIPA Group 163 4.7 Engineering Services 1,067 5
Esfahan Mobarakeh Steel Co. 39 4.6 Utility Service Providers 461 4
Index Information
Index Info Value %Change from 28-Nov-18 20-Nov-18
TSE All-Share Index 163,772 2.1
TSE30 Index 8,089 2.6
Traded Value (USD million) 109 6.8
Volume (million shares) 1,568 24.1
Top Influencers
Average Daily Trade Volume Close ($Cents) %Change from 28-Nov-18 20-Nov-18
Esfahan Mobarakeh Steel Co. 12 3.74
Golgohar Mining & Industrial Co. 16 4.19
Mellat Bank 5 4.68
MAPNA Group 13 4.85
FX Movements - November 2018 Unofficial Rate
-19%* IRR per US$
Source: Firouzeh Asia Brokerage, Bonbast All figures in US$ are converted from IRR at unofficial rate, unless otherwise indicated. * 1 November 2018 Vs. 28 November 2018 .
14 Iran Investment Monthly Iran’s Fixed Income Market Iran’s Fixed Income Market December 2018 - Volume 13, No 144
Iran’s Fixed Income Market From the start of the Iranian calendar year (March 2018) to end-November, total issuance on the fixed income mar- ket reached 2.6 billion US$ based on the unofficial exchange rate. Yield to maturity (YTM) remained stable at 24.2% at the end of November.
Iran’s Debt Securities Market - November 2018 0.18 6.2 Tehran Stock Exchange Iran Farabourse (Junior Market)
Market Value (billion US$)*
8.96 12.1 Tehran Stock Exchange Iran Farabourse (Junior Market)
Average Daily Trading Value (million US$)
1,043,750 1,685,262 Tehran Stock Exchange Iran Farabourse (Junior Market)
Average Daily Trading Volume (bonds) * As of 28 November 2018 Value & Breakdown of Sukuk Issuance in Iran’s Capital Markets, 2018* (billion US$)
Source: Iran Farabourse Billion US$ *Calculated by the unofficial exchange rate in the period of issuance. Iranian calendar year 1397
15 Iran Investment Monthly Market Overview Iran’s Fixed Income Market December 2018 - Volume 13, No 144
Snapshot of the Highest Yielding Debt Securtites1 - November 2018
Issuer Type YTM (p.a.) Maturity
Tehran Subway9812 Mosharekat 27.67 15-Mar-20
Sokuk Saipa403 Ijara 27.64 24-May-21
Rayan Bond-3M18% Mosharekat 26.75 6-Feb-21
Murabaha Saipa18% Ijara 26.05 16-Nov-20
Mashhad Mayor9905 Mosharekat 25.50 13-Aug-20
Mosharekat Naft21% Mosharekat 23.89 20-Jan-20
Golgohar Ijara 17% Ijara 22.15 31-Jan-22
Sokuk Saipa143 Ijara 20.91 24-May-21
Ejareh Raytel 21% Ijara 20.44 3-May-20
Sukuk Mokhaberat Ijara 20.44 20-May-22
1 This snapshot is a selection of the highest yielding securities with minimum one year maturity in Iran’s debt markets and should not be considered as a solicitation or recommendation by Turquoise Partners.
Iran’s T-bills YTM in IRR Term
24.18%
Source: Tehran Stock Exchange, Iran Farabourse, Central Bank of Iran
16 Iran Investment Monthly Economic Review Latest Updates December 2018 - Volume 13, No 144
Iranian Banking Sector Credit Facilities: April to October 2018
According to the Central Bank of Iran, credit facilities provided to various sectors of the economy rose 9.6% to 39 billion US$ (average exchange rate of 91,774 IRR per USD) between April to October 2018, compared with the same period of a year ago. The Services sector received the highest share of credit facilities at 41% of total value, while Industry & Mines came next with about 28%. Services consist of a large portion of the nominal GDP, representing 56% in 2017. Working capital requirements were the most frequently cited reason for applying for finance in all sectors: 65% in Agriculture, 81% in Industry & Mines, 17% in Housing & Construction, 73% in Commerce, 49% in Services and 59% in Other Industries.
Inflation Rate
The Consumer Price Index grew 3.5% on a monthly basis to 153.6 in the month of November giving a 12 month moving average of an 18.4% inflation rate and point to point inflation of 39.9% (November 2018 versus November 2017). Tobacco prices rose more than 60% over the past 12 months while Food & Beverage prices increased 25%.
Tourism Industry The Rial depreciation against the USD that started in early 2018 resulted in a good opportunity for the tourism industry. According to the latest data from the World Economic Forum (WEF), Iran’s ranking in regards to attracting tourists has gone up from 114 in 2011 to 93 in 2017. In spring 2018, the number of tourists travelling to Iran grew by 30% compared to the same period last year. There was a large increase from neighbouring countries such as Iraq, Afghanistan and Turkey. The number of European travellers declined by 24%, due to sanctions concerns relating to issues such as insurance payments. Below are some facts about the Iranian tourism sector:
1200 USD Income of each foreign tourist travelling to Iran
7.5% Share in GDP (2017)
1,440,000 Number of tourists that travelled to Iran (Spring 2018)
17 Iran Investment Monthly Economic Review Macroeconomic Data December 2018 - Volume 13, No 144
Macroeconomic Data Iran Economic & Market Data Iran Macroeconomic Forecast Calendar Gross Domestic Product Unit 2017/ 18 2018/ 19 2019/ 20 CBI: Selected Economic Indicators for (Billion US$) October 2018 Nominal GDP 432 419 413 Released: 17 December 2018 Real GDP Growth (%) 3.8 -1.5 -3.6
SEO: Iran Capital Market Insight (%) (December 2018) Inflation 9.6 23.8 31.2 Released: December 2018 Export (Billion US$) 98.1 - -
Import (Billion US$) 75.5 - -
Non Oil Export (Billion US$) 39.8 - -
Private Consumption (%) 2.5 -0.6 -1.8 (at constant market prices)
Gross Public Debt (% of GDP) 37% 42% 44%
Source: International Monetary Fund - Iran Country Report, March 2018 - IMF Staff Visit Article IV Mission to Islamic Republic of Iran in January 2018 - Central Bank of Iran Security Exchange Organization - Statistical Centre of Iran - World Bank October 2018
18 Iran Investment Monthly Turquoise Partners About Turquoise Partners December 2018 - Volume 13, No 144
About Turquoise Partners
Since 2005
Turquoise is a leading investment group based in Iran that offers a full range of financial services to select investors looking at the Iranian market. The group operates across four core areas: investment management, brokerage, corporate advisory and private equity/venture capital. Turquoise also manages more than 75 per cent of all existing foreign portfolio investments on the Tehran Stock Exchange. Its asset management division offers an EU-regulated equity fund tailored specifically to foreign investors and invests exclusively in the Iranian securities markets. The fund is jointly advised by Turquoise Partners and emerging market specialist Charlemagne Capital.
Firouzeh Asia, the group’s brokerage division, is the market leader in foreign investment and execution, and publishes English language market research, news and analysis. In addition, Turquoise is the only Iranian financial services group to have a significant track record in private equity investing and currently manages two listed private equity investment vehicles.
Turquoise’s corporate finance team offers a full suite of advisory services including mergers and acquisitions, restructuring, market entry and capital raising, for international clients seeking to enter the Iranian market as well as leading Iranian companies.
19 Iran Investment Monthly Turquoise Partners About Turquoise Partners December 2018 - Volume 13, No 144
Asset Management
Turquoise Asset Management has established an • In early 2017, Turquoise Partners launched the 1st outstanding reputation and robust performance track Sovereign Bond Fund with a target return of 15-20% record in the Iranian equities market. The group is in local currency terms. The Turquoise Partners known as a leading investment firm with a strategy Sovereign Bond Fund is an actively managed of value investing and long term capital growth; it strategy with low volatility that invests in a specializes in attracting foreign investors to invest in range of Iran’s sovereign-backed fixed income one of the most undervalued financial markets in the assets with the objective of delivering high world. stable and absolute returns over time. The Our investment team is comprised of experienced fund adopts a concentrated approach, utilizing professionals with more than 20 years experience a core portfolio of Iranian Government bonds across international and domestic financial markets. backed by the Central Bank of Iran as the Our investment decisions are guided and supported ultimate guarantor. Sovereign Fixed Income by our investment and advisory committees, access securities include; Islamic Treasury Bills, to detailed market information, and our on-the-ground Ijarah Sukuk, Musharakah Sukuk & Murabaha presence in Iranian financial markets over the last 10 Sukuks. years. Our commitment to maintaining the highest standards, • Having operated in the Iranian market for over along with our long term growth strategy has allowed a decade, Turquoise has accumulated a first us to gain an unparalleled reputation as the leading rate database of market data and information. asset management firm inside Iran. The firm’s electronic newsletter, Iran Investment Monthly, has been consistently Asset Management Division: Products & Services published for over 12 years and has a wide readership of over 6,000 investors and Iran Turquoise Partners launched Iran’s first equity fund enthusiasts. This newsletter and other regular in May 2006, tailored for foreign investors. With research products of the firm, are the only free over 10 years of track record, the fund has grown source of English language research on the to be the largest foreign investor on the Iranian Iranian economy and capital markets. capital markets. The investor base of this fund is almost all European with a mix of institutional, family offices, high net worth individuals and private professional investors.
• In 2015, Turquoise Partners and Charlemagne Capital launched the first EU regulated alternative investment fund for Iran. This fund is now operational and is open to global investors aiming to get exposure to the Iranian market.
For more information about products and services offered by Turquoise Partners please contact: [email protected]
20 Iran Investment Monthly Turquoise Partners About Turquoise Partners December 2018 - Volume 13, No 144
Corporate Advisory Brokerage
Our corporate finance team is comprised of senior Firouzeh Asia, the brokerage arm of Turquoise Iranian and international bankers based locally and in Partners, is the leading broker offering access to London. We deliver mergers and acquisition advisory, Iranian securities markets for international investors. restructuring, market entry and capital raising services Over the years, Firouzeh Asia, as a fully licensed to international clients seeking to enter the Iranian brokerage company under the Securities and market. We also assist Iranian domestic corporates to Exchange Organization of Iran, has been a pioneer access global markets through strategic partnerships. in servicing international investors as well as offering We seek to combine in-depth local knowledge and professional services to its domestic clients. Firouzeh access with international investment banking best Asia has a presence in four major Iranian cities: practices. Tehran, Isfahan, Rasht and Yazd.
In cooperation with Turquoise’s market leading equity Brokerage Division: Products & Services brokerage, we deliver capital markets services, including public markets capital raising and structured • Securities Dealing products, to Iranian corporate clients and foreign and Online trading platform with live market data domestic institutional investors. for all customers Telephone orders Corporate Advisory Division: Products & Services Block trades Dedicated trading station for large customers • Advisory Reports: in-depth research reports tailored to the corporate advisory division’s policies, • Managed Accounts providing due diligence research on specific Investment advice (institutional clients only) listed or non-listed companies and their sectors’ outlooks, in English. • Capital Market Advisory Listing and IPO advisory Fixed income securities issuance and placement
• Index ETF Launch of Iran’s first index-linked ETF (TSE- 30 ILETF) in January 2015 Client portfolio management Index ETF Fixed Income (Firouza ETF)
• Equity Research Report: an in-depth research report tailored to the Turquoise Investment Strategy which provides the latest developments in a selected number of listed companies (including their sectors), in English.
For more information about products and services offered by Turquoise Partners please contact: [email protected]
21 Iran Investment Monthly Turquoise Partners About Turquoise Partners December 2018 - Volume 13, No 144
Private Equity/Venture Capital
Turquoise is one of the only Iranian financial firms with a significant track record in private equity investing. Our investment team has been operating on the ground since 2005 and has invested on its own behalf, with co-investment partners, and as a manager in the most attractive growth sectors of the Iranian economy. Transactions have included private investments in FMCG, financial services, real estate and technology-based venture capital.
Our private equity capabilities include experience in all phases of the investment process including market analysis, due diligence for investors in the Iranian environment, interface with regulators and other governmental authorities, investment restructuring, exit management and undertaking all the reporting and investment monitoring expected of a private equity fiduciary.
Private Equity Division: Products & Services
• The Turquoise Group has made private equity investments both on its own and with partners in a variety of sectors including consumer, financials, technology and real estate amongst others.
• Advisory Reports: in-depth research reports tailored to the corporate advisory division’s policies, providing due diligence research on specific listed or non-listed companies and their sectors’ outlooks, in English.
For more information about products and services offered by Turquoise Partners please contact: [email protected]
22 Iran Investment Monthly Turquoise Partners About Turquoise Partners December 2018 - Volume 13, No 144
Ctrl+Tech
In early 2017, and in line with Turquoise’s history A market which boasts: of identifying and acting upon new opportunities, • A young and tech-savvy demographic where we launched a tech incubator in North Sohrevardi, almost two-thirds of Iran’s 80 million population is Tehran, by the name of Ctrl+Tech. Ctrl+Tech aims under the age of 35 to build and develop exciting tech start-up ideas in • The highest internet usage in the Middle East Iran, with a mandate to not only focus on launching where Iran is responsible for almost 40% of the ‘proven-concept’ business models that exist and have entire region’s usage demonstrated success elsewhere in the world, but • A rapidly growing smart-phone penetration rate, also on innovative new ideas that should resonate well estimated at 48 million users - up 2,300% in the in Iran’s burgeoning start-up environment. past 3 years
Ctrl+Tech currently consists of a carefully assembled After 5 months of full operation, Ctrl+Tech successfully team of 16 individuals all of whom are passionate launched it’s first project in early October 2017 - an about building new apps for the domestic market. Our exciting job-search platform: 3sootjobs. team of talented founders, developers, designers, and tech gurus are backed and supported by senior 3sootjobs is revolutionizing Iran’s job-search market by mentors and members of Turquoise Partners, allowing creating and introducing a smart, fast and easy-to-use Ctrl+Tech to leverage off Turquoise’s wealth of platform (app and website) that will allow job seekers expertise and experience in Iran’s digital landscape. and employers to instantly search, and connect, using an algorithm-led software. Turquoise created Ctrl+Tech in order to build a platform Since launch, 3sootjobs has shown impressive growth that will grow strongly in Iran’s flourishing technology and success, where it has attracted thousands of market. users in the first week, scored 96% 5* ratings on Cafe Bazaar, and successfully closed a seed funding round.
For more information about products and services offered by Turquoise Partners please contact: [email protected]
23 Iran Investment Monthly Turquoise Partners News & Views December 2018 - Volume 13, No 144
News & Views
Recent Research
Iran Daily Market Update – December 2018
December 31, 2018
December 30, 2018
December 29, 2018
24 Iran Investment Monthly December 2018 - Volume 13, No 144
Turquoise Partners No. 10. 7th St. Khaled Eslamboli (Vozara) Ave. Tehran, Iran Tel: + 98 21887 26 681 Fax: +98 21 881 07 746 Email: [email protected]
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25 Iran Investment Monthly