April & May - Volume 15 No 170

Summary Equity Markets The TEDPIX index increased by 2% and the junior Farabourse market (IFB) by 4% in IRR terms over the past two months (ending April 2021). Based on the unofficial exchange rate, the month-on-month gain in dollar terms was 1% on the TSE and 6% on the IFB market. This was partly due to a 8% appreciation of the IRR against the USD over the month.

Debt Markets From the start of the Iranian calendar year 1400 (March 2021) to the end of April, the total issuance on the fixed income mar- ket reached US$ 0.4 billion based on the unofficial exchange rate. Yield to maturity (YTM) remained stable at 22% at the end of April.

Economic Review This issue reviews the latest oil export statistics and trade balance data. 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 centres.

Kordes‌tan, Iran Photo by: Ali Darvishsefat

1 Iran Investment Monthly Table of Contents 3 Market Overview 5 Performance & Updates

7 Historic Trends & Sector Insight

8 Industry at a Glance

9 Market Snapshot

11 TSE & Junior Market Performance

13 Top Ranked Companies

15 Iran’s Fixed Income Market 18 Economic Review

18 Latest Updates

20 Macroeconomic Data 21 News & Views

21 Recent Brokerage Reports

21 Turquoise News 22 Turquoise Group

2 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

Market Review

For 3 months out of 4 in the current year, the market has fallen. This has pushed back the year-to-date performance of the TSE to minus 6.4% in USD terms. The ongoing political negotiations between Iran and global powers, which are widely viewed as being vital in providing possible economic relief from sanctions, has not thus far generate significant optimism either. This is because there have not been signs of an immediate breakthrough regarding the nuclear dispute as of yet.

In other developments, investors are waiting for the earnings season to kick off in the second half of May. Earnings reports can provide the market with new information although any surprises are expected to be limited; this is because economic variables (such as the exchange rate, inflation, interest rates etc.) have remained pretty stable over the winter. Therefore, the continuation of the current sentiment in the stock market is likely in the short term unless there is some good news on the political side following the nuclear negotiations. Shervin Shahriari Valuations have also moved lower in the stock market as the average trailing P/E Chief Inves‌tment Officer ratio fell from its peak of 42x in July 2020 to 13x by the end of April 2021.

P/E

Source: TSE

More than half the weight of the Iranian market cap belongs to listed companies which produce global commodities that are either exported or sold on the free market domestically. Thus, fluctuations in global prices of commodities and the Iranian exchange rate have a big impact on the profitability of these companies.

3 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

In line with the oil price appreciation in April, the prices of most commodities continued to appreciate. This included basic metals, mining and petrochemical products. The industrial metals sector rose by 3% in USD terms while the mining and petrochemical sector slipped by 1%, both outperforming the main index. A 3% appreciation of the Rial, however, worked against the positive impact of rising global commodity prices as it reduced the value of exported goods in local currency terms.

Given the magnitude of the rise in global commodity prices, we think that listed commodity producers have potential for growth, despite expectations for Rial stability in the short term. This is the reason for the current 60% weighting of commodity-related companies in the equity portion of our current portfolio.

4 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

Performance & Updates

11 - Year Average (2008-2021)1 Market Capitalization (billion US$) 121 TSE & Farabourse Junior Market P/E 7.8 x TSE Dividend Yield (%) 3 10% TSE Market Cap / GDP 54% TSE & Farabourse Total Turnover (billion US$),Average Annual 31 TSE TSE Overall Index Average Annual Growth (US$) 27% TSE

1 Annual data from 2008 to Mar 2021 2 Calculated based on unofficial IRR per US$ exchange rates.

Summary - Mar 2021 Market Capitalization (billion US$) 283 TSE & Farabourse Junior Market Free Float 22% TSE & Farabourse Junior Market Number of Listed Companies1 684 TSE & Farabourse Junior Market TSE Index Performance (US$)2,4 7.2% (MTD) -7.6% (YTD) TSE Total Turnover (million US$)2 5,143 m$ TSE & Farabourse Junior Market Dividend Yield (%) 3 4.7% TSE P/E 17.0

1 174 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 4 TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index) Tehran Stock Exchange & Junior Market Trade by Value1 -Mar 2021

Iran Farabourse (Junior Market) Trade Volume (million US$)

Tehran Stock Exchange (Main Market)Trade Volume (million US$)

Since the beginning of 2021, the market pushed back the YTD performance of the TSE and IFB to -8% and -9% respectively in IRR terms. The loss in hard currency terms was also 8% on the TSE and 9% on the IFB on a year to date basis. In March 2021, the TSE equity trade volumes declined to US$4,553 million US$ from the US$9,290 average over the last twelve months. The total number of shares traded on the TSE decreased by 12% compared to a monthly average over the past year of 193 billion shares. US$ Million

Source: Tehran Stock Exchange Iran Farabourse Company All figures in US$ are converted from IRR at the free market rate 1 Trading volume month on month in US$ term - TSE includes mainly equity while Farabourse has more fixed income instruments and smaller equities.

5 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

Performance & Updates

11 - Year Average (2008-2021)1 Market Capitalization (billion US$) 133 TSE & Farabourse Junior Market P/E 8.3 x TSE Dividend Yield (%) 3 10% TSE Market Cap / GDP 65% TSE & Farabourse Total Turnover (billion US$),Average Annual 31 TSE TSE Overall Index Average Annual Growth (US$) 28% TSE

1 Annual data from 2008 to Apr 2021 2 Calculated based on unofficial IRR per US$ exchange rates.

Summary - Apr 2021 Market Capitalization (billion US$) 266 TSE & Farabourse Junior Market Free Float 22% TSE & Farabourse Junior Market Number of Listed Companies1 683 TSE & Farabourse Junior Market TSE Index Performance (US$)2,4 1.2% (MTD) -6.5% (YTD) TSE Total Turnover (million US$)2 1,874 m$ TSE & Farabourse Junior Market Dividend Yield (%) 3 6.0% TSE P/E 13.3

1 174 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 4 TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index) Tehran Stock Exchange & Junior Market Trade by Value1 - Apr 2021

Iran Farabourse (Junior Market) Trade Volume (million US$)

Tehran Stock Exchange (Main Market)Trade Volume (million US$)

Since the beginning of 2021, the YTD performance of the TSE and IFB has been -14% and -10% in IRR terms respectively. The loss in hard currency terms was 7% on the TSE and 3% on the IFB on a year-to-date basis. In April 2021, the TSE equity trade volumes declined to US$1,662 million from the US$8,987 million monthly average over the past year. The total number of shares traded on the TSE decreased by 69% compared to a monthly average over the past twelve months of 188 billion shares. US$ Million

Source: Tehran Stock Exchange Iran Farabourse Company All figures in US$ are converted from IRR at the free market rate 1 Trading volume month on month in US$ term - TSE includes mainly equity while Farabourse has more fixed income instruments and smaller equities.

6 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

Historic Trends & Sector Insight

Long-Term Overall Index (Normalized in USD) Long-Term Iranian Market Cap ( Normalized in USD)

Historic Average: 200 Historic Average: 185

Apr 2021 : 425 Apr 2021 :436

TSE Best Performing Sectors & Overall Index (Normalized in USD)

115

106

108

96 Monetary Intermediation - Banks Computer & related activities Post & Telecommunication Overall USD

TSE Large Sectors (% Market Capitalization)

22% 14% 9% 8% 7% 5% 5% 4% 3% 3% 28% Other Metals* Monetary Diversified Chemicals Refined Petroleum Source: TSE, Bonbast, as of Apr 2021 *Metals sector includes steel, copper and aluminum Motor Vehicles And Auto Parts Pharmaceuticals Computer & Related Activities Metal Ores Mining Telecommunications

7 Iran Investment Monthly Refined Petroleum Market Overview April & May 2021 Volume 15 No 170

Industry at a Glance - Apr 2021

YTD 1-Year Return 5-Year Return Top Performing Companies Market Cap Sector Trailing (%) Trailing (%) Trailing (%) in April 2021 (MOM %) (Million USD) in USD in USD in USD

Iranian Aluminium Company 730 -22% -27% - Metals* Khouzestan steel company 3,031 10% -49% -20%

Iran Alloy Steel Co 804 -3% -25% 74%

Opal Kani Pars 1,459 - - 0%

Mining Chadormalu Mining and Industrial Company 4,719 7% 8% -28%

Sabanour Mining and Industrial Development Company 590 11% 40% -60%

Lavan Oil Refinery Company 393 -9% -22% 3%

Petroleum Iranol Company 318 21% 10% -34%

Shiraz Oil Refining Company 460 4% -2% 135%

Arak Petrochemical Corporation 849 20% -22% -1%

Chemical Jam Polypropylene Company 725 3% -16% -

AryaSasol Polymer Company 3,365 -47% - -

Post Bank of Iran 275 28% 28% 38%

Banks Bank Mellat 4,215 1% -79% -72%

Karafarin Bank 478 7% -77% -84%

TSE Large Sectors 5 -Year Performance (Normalized in USD) Metals Mining Petroleum Chemical Banks

335, Apr 2021 262, Apr 2021 188, Apr 2021 151, Apr 2021 138, Apr 2021

Source: TSE, Bonbast, as of ending Apr 2021 *Metals sector includes steel, copper and aluminum

8 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

Market Snapshot -Mar 2021 Iran & Regional Markets

Iran: A 26-Year Snapshot, Asset Class Annualized Return in US$ (%) P/E Multiple Comparison MSCI Morocco 25.3 Kuwait 45.7 Qatar 19.4 12% MSCI Arabian Markets 23.1 MSCI GCC Countries 23.7 MSCI Egypt 7.8 6% 5% Saudi Arabia 37.6 UAE 21.9 Iran 17.0 % Turquoise Iran Fund 11.7 Sub Fund B/C, as of ending Mar 2021 Note: Annual data from 1995 to Mar 2021 Source: CBI, TSE, IFB All figures in US$ are converted from IRR at the free market rate

Iran & International Markets

3 4 Tehran Stock Exchange MSCI Emerging Markets MSCI Frontier Markets

Average P/E Average P/E Average P/E 17.0 21.5 15.1 1 1-Year Performance in $ 1-Year Performance in $ 1-Year Performance in $ 57.0% 58.9% 39.6% Annualized 10 Year in $ 2 Annualized 10 Year in $ Annualized 10 Year in $ 8.6% 4.0% 4.2%

22.4 Chemicals 20.9 Information Technology 35.8 Financials 13.7 Basic Metals 18.2 Financials 14.5 Communication Services 8.9 Refined Petroleum Products 17.7 Consumer Discretionary 13.6 Real Estate 7.6 Metal Ores Mining 11.7 Communication Services 11.1 Consumer Staples 7.3 Monetary intermediation 8.1 Materials 8.8 Materials

Sector Breakdown (%) 40.1 Others Sector Breakdown (%) 23.4 Others Sector Breakdown (%) 16.3 Others

1.TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index) performance calculated in US$ for the Period of Mar 2020 to Mar 2021 2.Overall Tehran Stock Exchange Index 10 year annualized performance calculated in US$ 3.MSCI Emerging Markets Index (US$) - Mar 2021 4.MSCI Frontier Markets Index (US$) - Mar 2021 Source: Tehran Stock Exchange - Central Bank of Iran - MSCI Inc., Kamcoonline. All figures in US$ are converted from IRR at the free market rate, unless otherwise indicated. 9 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

Market Snapshot -Apr 2021 Iran & Regional Markets

Iran: A 26-Year Snapshot, Asset Class Annualized Return in US$ (%) P/E Multiple Comparison MSCI Morocco 28.1 Kuwait 47.4 Qatar 18.5 12% MSCI Arabian Markets 24.0 MSCI GCC Countries 24.7 MSCI Egypt 7.9 6% 5% Saudi Arabia 31.4 UAE 21.7 Iran 13.3 % Turquoise Iran Fund 7.8 Sub Fund B/C, as of ending Apr 2021 Note: Annual data from 1995 to Apr 2021 Source: CBI, TSE, IFB All figures in US$ are converted from IRR at the free market rate

Iran & International Markets

3 4 Tehran Stock Exchange MSCI Emerging Markets MSCI Frontier Markets

Average P/E Average P/E Average P/E 13.3 21.5 17.5 1 1-Year Performance in $ 1-Year Performance in $ 1-Year Performance in $ -6.5% 49.2% 39.8% Annualized 10 Year in $ 2 Annualized 10 Year in $ Annualized 10 Year in $ 14.1% 4.0% 4.5%

20.0 Chemicals 21.2 Information Technology 35.0 Financials 13.7 Basic Metals 17.9 Financials 14.5 Communication Services 9.2 Investment Companies 17.4 Consumer Discretionary 14.2 Real Estate 7.6 Diversified Industrials 11.7 Communication Services 10.5 Consumer Staples 7.3 Metal Ores Mining 8.5 Materials 9.5 Materials

Sector Breakdown (%) 42.2 Others Sector Breakdown (%) 23.3 Others Sector Breakdown (%) 16.3 Others

1.TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index) performance calculated in US$ for the Period of Apr 2020 to Apr 2021 2.Overall Tehran Stock Exchange Index 10 year annualized performance calculated in US$ 3.MSCI Emerging Markets Index (US$) - Apr 2021 4.MSCI Frontier Markets Index (US$) - Apr 2021 Source: Tehran Stock Exchange - Central Bank of Iran - MSCI Inc., Kamcoonline. All figures in US$ are converted from IRR at the free market rate, unless otherwise indicated. 10 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

TSE & Junior Market Performance Tehran Stock Exchange: TEDPIX*, Mar 2021

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 free market rate, unless otherwise indicated.

Iran Farabourse (Junior Market): IFX*, Mar 2021

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 at the free market rate, unless otherwise indicated.

11 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

TSE & Junior Market Performance Tehran Stock Exchange: TEDPIX*,Apr 2021

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 free market rate, unless otherwise indicated.

Iran Farabourse (Junior Market): IFX*, Apr 2021

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 at the free market rate, unless otherwise indicated.

12 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

Top Ranked Companies - Mar 2021 Turnover Value % Total Turnover (million US$)

National 1.0% National Investment Company of Iran was founded in 1975 as the Investment 46.7 investment arm of Tejarat Bank and Pension Fund. The company is Company of Iran active in investment in various sectors across listed equities.

Barkat Pharmaceutical Is one of the largest pharmaceuticals holding Companies with 0.5% more than 20 subsidiaries. Company has acquired 14 percent of Group 21.3 the country total pharmaceutical market and could produce more than 420 different products through its subsidiaries.

Founded in 1962, Iran Khodro Industrial Group (also Iran Khodro known as IKCO) is the leading Iranian vehicle 9.5 0.2 manufacturer. IKCO produces c.65% of all domestic vehicles, and is the largest automotive manufacturer in the Middle East.

Iran Industrial Group was founded in 1964 Iran Tire Co. under the name of General Tire and Rubber of 0.1%

Top 5 Traded by Value Traded 5 Top 5.3 Iran in the country. It supplies major Iranian manufacturers, including major automakers such as van, cargo, bus, farm and road construction tires Tehran Oil Refining Tehran Oil Refining Co. was founded 0.1% in 1971 with initial capacity of 85,000 Company 4.1 BPSD. The company is involved in crude oil and hydrocarbon refining. Market Cap % Total Market Cap. (million US$) Persian Gulf 5.7% In Persian Gulf International Transportation founded in 1989 as a joint Petrochemical 11,582 private stock in Iran and was listed in 2010 in Tehran Stock Exchange. Industry The company operates as a distributor of products and goods across the country.

Mobarakeh Steel Esfahan Mobarakeh Steel Company, one of the largest industrial Manufacturing 5.6% complexes in the country, started its operation in 1991 with a 11,322 nominal capacity of 2.4 million tons per annum. The company produces more than 50% of Iran’s steel and operates in seven industrial complexes.

In 1972, Sarcheshmeh Copper Mines Joint Stock Co National Iranian of Kerman was established and, later, in 1976, it was Copper Industry Co. 5.0% renamed to National Iranian Copper Industries Co. to 10,087 cover all copper mines operations throughout the country. This company is active in extraction & utilization of copper mines, production of copper concentrates & manufacturing copper products. The Social Security Social Security Investment Company established Investment 3.1% in 1986, The company has a diversified sector Company 6,323 investment portfolio including oil & gas, mining, pharmaceutical, energy, cement and banking sectors.

Top 5 by Market Capitalization Top Chadormalu Mining Founded in 1991, Golgohar Mining & Industrial Company is one of the largest and Industrial 2.5% iron ore and iron pellet producers in Iran. Company 5,161 The company operates in combined plants among six iron mine zones about 55 km southwest of Sirjan city near Kerman province.

Source: Tehran Stock Exchange, Firouzeh Asia Brokerage. All figures in US$ are converted from IRR at the unofficial rate.

13 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

Top Ranked Companies - Apr 2021 Turnover Value % Total Turnover (million US$)

0.6% Mellat Bank was established in 1979 with the merger of ten pre- Bank Mellat 10.2 revolution private banks in Iran. From the outset, the operations of the bank have included various commercial banking services.

Bank Pasargad, also known as BPI, is a major Iranian 0.5% banking establishment offering retail, commercial Bank Pasargad 8.5 and investment banking services. The company was established in 2005 as a part of the government’s privatization of the banking system.

SAIPA is the second largest Iranian vehicle manufacturer. The company was established in 1966, with 75% Iranian SAIPA 0.5% ownership, to assemble Citroëns under license for the 7.7 Iranian market. Currently, it builds mainly Korean cars, but also has developed its own engine and range of cars.

Founded in 1962, Iran Khodro Industrial Group Iran Khodro (also known as IKCO) is the leading Iranian 0.4%

Top 5 Traded by Value Traded 5 Top 7.2 vehicle manufacturer. IKCO produces c.65% of all domestic vehicles, and is the largest automotive manufacturer in the Middle East.

Tejarat Bank was founded in 1979 after the implementation of the Banks Tejarat Bank 0.3% Nationalization Act and the subsequent 5.9 integration of five domestic commercial banks and six multi-national banks. Market Cap % Total Market Cap. (million US$) Mobarakeh Steel Esfahan Mobarakeh Steel Company, one of the largest industrial complexes 5.6% in the country, started its operation in 1991 with a nominal capacity of 2.4 Manufacturing 11,309 million tons per annum. The company produces more than 50% of Iran’s steel and operates in seven industrial complexes.

Persian Gulf Persian Gulf International Transportation founded in 1989 as a Petrochemical 5.3% joint private stock in Iran and was listed in 2010 in Tehran Stock 10,811 Exchange. The company operates as a distributor of products and Industry goods across the country.

In 1972, Sarcheshmeh Copper Mines Joint Stock Co National Iranian of Kerman was established and, later, in 1976, it was Copper Industry Co. 5.1% renamed to National Iranian Copper Industries Co. to 10,243 cover all copper mines operations throughout the country. This company is active in extraction & utilization of copper mines, production of copper concentrates & manufacturing copper products. The Social Social Security Investment Company established in 1986, The company has a diversified sector Security Investment 3.4% investment portfolio including oil & gas, mining, Company 6,927 pharmaceutical, energy, cement and banking sectors.

Top 5 by Market Capitalization Top Founded in 1991, Golgohar Mining & Golgohar Mining and Industrial Company is one of the largest iron 2.9% ore and iron pellet producers in Iran. The Industrial Company 5,881 company operates in combined plants among six iron mine zones about 55 km southwest of Sirjan city near Kerman province.

Source: Tehran Stock Exchange, Firouzeh Asia Brokerage. All figures in US$ are converted from IRR at the unofficial rate.

14 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

Iran’s Fixed Income Market For the start of the Iranian calendar year 1400 (March 2021) to the end of March total issuance on the fixed income market reached 10 billion US$ based on the unofficial exchange rate. Yield to maturity (YTM) remained stable at 21% at the end of March

Iran’s Debt Securities Market - Mar 2021* 0.9 9.4 Iran Farabourse (Junior Market)

Market Value (billion US$)* 13.8 574.2 Tehran Stock Exchange Iran Farabourse (Junior Market)

Average Daily Trading Value (million US$)* 3,531 156,423 Tehran Stock Exchange Iran Farabourse (Junior Market)

Average Daily Trading Volume (bonds)

* As of Esfand 1399 (19 Feb- 19 Mar 2021)

Breakdown of Sukuk Issuance in Iran’s Capital Markets, 2021 (1399)** - (billion US$)

60% 20% 11% 6% 3%

Murabaha Sukuk Islamic T-Bills Salaf (Salam) Sukuk Ijarah Sukuk Other

Source: Iran Farabourse **Calculated by the unofficial exchange rate in the period of issuance, percentages have been rounded and may not total to 100.

15 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

Iran’s Fixed Income Market From the start of the Iranian calendar year 1400 (March 2021) to the end of April, the total issuance on the fixed income market reached US$ 0.4 billion based on the unofficial exchange rate. Yield to maturity (YTM) remained stable at 22% at the end of April.

Iran’s Debt Securities Market - Apr 2021* 1.1 10.1 Tehran Stock Exchange Iran Farabourse (Junior Market)

Market Value (billion US$)* 7.5 408.3 Tehran Stock Exchange Iran Farabourse (Junior Market)

Average Daily Trading Value (million US$)* 1,880 109,042 Tehran Stock Exchange Iran Farabourse (Junior Market)

Average Daily Trading Volume (bonds)

* As of Farvardin 1399 (21 Mar- 20 Apr 2021)

Breakdown of Sukuk Issuance in Iran’s Capital Markets, 2021 (1399)** - (billion US$)

83% 8% 9%

Islamic T-Bills Murabaha Sukuk Other

Source: Iran Farabourse **Calculated by the unofficial exchange rate in the period of issuance, percentages have been rounded and may not total to 100.

16 Iran Investment Monthly Market Overview April & May 2021 Volume 15 No 170

Iran’s Fixed Income Market

Snapshot of the Highest Yielding Debt Securtites1 - April

Issuer Type YTM (p.a.) Maturity

Corporate Manfeat 0.211 6-Nov-22

Corporate Musharekat 0.211 20-Jun-23

Corporate Murabaha 0.211 11-Nov-24

Corporate Murabaha 0.211 29-Jan-23

Corporate Murabaha 0.210 16-Jun-24

Corporate Murabaha 0.210 26-Feb-23

Corporate Musharekat 0.208 19-Mar-23

Government Treasury Bill 0.208 3-Jan-22

Corporate Ijarah 0.208 4-Mar-24

Corporate Murabaha 0.207 16-Sep-23

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

Apr 2021 0.22

Source: Tehran Stock Exchange - Iran Farabourse

17 Iran Investment Monthly Economic Review April & May 2021 Volume 15 No 170

Latest Updates

Oil Export and Trade Balance

As non-oil exports including oil condensate increased in April 2021 compared to the same month in the previous couple of years, the trade balance is expected to remain stable. Iran exported 2.9 billion USD in April 2021; this was close to the amount in April 2018. Iran would be able to balance its payments and consequently reduce the severe inflation impacting the Iranian population. The US is expected to lift some oil sanctions in the second half of 2021.

In addition, over the past twelve months ending April 2021, Iran’s non-oil trade (including condensate) resulted in an average monthly deficit of US$286 million. In April 2021, the trade balance registered at a surplus of 174 million USD.

Non- oil Export (Including Oil Condensate) Million USD

Source: Iran Customs Administration

Trade Balance Million USD

Source: Iran Customs Administration

18 Iran Investment Monthly Economic Review April & May 2021 Volume 15 No 170

Exchange Rate

As we are heading towards the Presidential elections, exchange rate fluctuations are expected to be minimal. The graphic below illustrates that the IRR depreciates vs the USD by approximately 11% each election year (which is held every 4 years).

However, in 2021, we can see that the IRR has in fact appreciated so far by approximately 13%. This suggests that the currency will remain stable if not strengthen further until the election on June 18th. The positive sentiment regarding the nuclear agreement and potential removal of US sanctions are contributing to this.

Historical Fluctuation of USD vs. IRR in an Election Year

: 18% : 11%

Source: Bonbast

19 Iran Investment Monthly News & Views April & May 2021 Volume 15 No 170

Macroeconomic Data Iran Economic & Market Data Data Macroeconomic Forecast Calendar Unit 2021/ 22 2022/ 23

SCI: CPI by Provinces in the Month of Real GDP Growth (%) 2.5 2.1 Farvardin of the Year 1400 Released: May 2021 Inflation (%) 39 27 SCI: A Selection of Labour Force Survey Results: Winter 1399 Source:IMF Released: April 2021

Actual Macroeconomic Data Unit Period Value Comments

Population Growth % 2011- 2016 1.24% -

1399 Unemployment Rate % 9.6% - (2020/21)

Inflation Rate % May-21 (Y/Y) 41% 2016 = 100

1399 Non-oil GDP Growth % 0.2% 2011 = 100 (Autumn 2020) 1399 GDP Growth % 0.8% 2011 = 100 (Autumn 2020)

Source: Statistical Center of Iran

20 Iran Investment Monthly News & Views April & May 2021 Volume 15 No 170

Recent Brokerage Report Turquoise News

Iran Daily Market Update – May 2021 February 2, 2021 Iran Fara Bourse, the junior equity market, hosted a subscription 26 May 2021 for units of a private equity fund on Monday -- the second of its kind.

25 May 2021 The fund is dubbed as Turquoise Servat Afarin Private Equity Fund and its ticker symbol is displayed on the IFB bulletin board 24 May 2021 as ‘Servat’. It is operated by Turquoise Partners, a leading finan- 23 May 2021 cial service company in Tehran, the IFB news portal reported.

22 May 2021 A PE fund is a pooled investment scheme used for investments in equities. Institutional and retail investors provide the capital for the private equity, and capital can be utilized to fund new tech- nology, expand working capital and bolster balance sheets of the companies. More Information

October 17, 2020 Ramin Rabii, Turquoise Partners CEO’s interview with The Economist on the recent boom and bust of the Iranian stock market:

“A steadily weaker Rial has over time boosted non-oil export industries, such as petrochemicals, metals, engineering services and even chocolate and pastries”, says Ramin Rabii of Turquoise Partners, a financial-services group.

The Stock market reflects this industrial diversity. There are hundreds of stocks in a variety of sectors. And because crude is a state-owned business, it better reflects the non-oil economy. The market had a good run last year thanks in large part to improving export earnings. People took notice. Here was an asset class that acted as a hedge against the Rial’s diminishing value. The scene was set for this year’s melt-up in share prices.

“The number of people active in the Stock market went from 700,000 to 5m in a matter of months”, says Mr Rabii. More Information

21 Iran Investment Monthly Turquoise Group April & May 2021 Volume 15 No 170

Asset • EU Regulated Equity Fund Management • EU Regulated Fixed Income Fund • Domestic Fixed Income Fund • Domestic ETF TSE-30 • Domestic Mutual Fund • Managed Accounts

Investment • Banking Services • M&A • ECM • DCM • Private Placement • Institutional Equity Sales • Retail Equity Sales • Market Entry Strategy

Principal Strategic Investments

22 Iran Investment Monthly April & May Turquoise Partners 7th floor, Mahdyar Building, Salehi Street, Niavaran Ave. Tehran, Iran Tel: + 98 21 22 70 62 38 Fax: +98 21 881 07 746 Email: [email protected]

Firouzeh Asia Brokerage 5th Floor No. 11, Mirza Hassani St. Ghaem Magham Farahani Ave. Tehran, Iran Tel: +98 21 881 06 106 Fax: +98 21 881 07 746 Email: [email protected]

DISCLAIMER This document has been issued by Turquoise Partners for information purposes only and is not to be construed as a solicitation or an offer to purchase or sell any security or other financial instrument or to any particular category of investors in jurisdictions in which such an offer or solicitation to the public or to any particular category of investors is illegal. Although the material in this report is based on information that Turquoise Partners considers reliable, Turquoise Partners does not make any warranty or representation (express or implied) in relation to the accuracy, completeness or reliability of the information contained herein. Any opinions expressed herein reflect a judgment at the date of publication and are subject to change. Turquoise Partners accepts no liability whatsoever for any direct, indirect or consequential loss or damage of any kind arising out of the use of all or any of this material. Where Turquoise Partners provides information in the document, it is provided exclusively for information purposes. The information does not constitute any form of recommendation related to the personal circumstances of investors or otherwise, nor does it constitute any specific or general recommendation to buy, hold, or sell financial instruments and does not thus create any relationship between Turquoise Partners and any investor. The document may not include all the up-to-date information required to make investment decisions. Other more accurate and relevant sources of information may exist. Investors should thus diligently inform themselves about the chances and risks of the investments prior to taking investment decisions. In addition to the financial aspects, this should include, in particular, the legal and tax aspects of the investments. It is strongly recommended that any potential investor should contact a financial adviser and, where required, a lawyer or tax adviser. Furthermore, it should also be considered that the future performance of financial instruments and their return cannot be inferred from their past performance. The value of investments may go down as well as up and investors in financial instruments should be capable of bearing a total loss of investment. Neither Turquoise Partners nor any third party content provider shall be liable for any errors, inaccuracy, delay or updating of the published content of the provided document. Turquoise Partners expressly disclaims all warranties as to the accuracy of the content provided, or as to the use of the information for any purpose, as far as legally possible. This material is for the use of intended recipients only and neither the whole nor any part of this material may be duplicated in any form or by any means. Neither should any of this material be redistributed or disclosed to anyone without the prior consent of Turquoise Partners. PERSONS DOMICILED, RESIDENT OR BASED IN THE UNITED STATES OF AMERICA ITS TERRITORIES OR POSSESSIONS OR WHO MAY OTHERWISE BE CONSIDERED AS UNITED STATES PERSONS, INCLUDING REPRESENTATIVES OF UNITED STATES COMPANIES OR NON-UNITED STATES SUBSIDIARIES OF UNITED STATES COMPANIES SHOULD NOT CARRY OUT ANY ACTION IN BREACH OF U.S. SANCTIONS LAWS.

23 Iran Investment Monthly