IRAN Sleeping Giant at a Turning Point Turning Sleeping a Giant at IRAN Sleeping Giant at a Turning Point Perspective On The Iranian Stock Market Mofid Securities No. 1, Ziba Alley, Negin St, Ghaem Magham Ave, Haft-e Tir, 15899 33491, Tehran / Iran Tel: +98 (21) 8190 1165 Email: [email protected] Web: en.emofid.com Mofid Securities President Statement Hello from the financial center of Iran, and a very warm welcome to you at anywhere around the globe. On behalf of everyone on staff at Mofid Securities, let me thank you for your interest in Iranian capital market. We all hope that the information provided here help you better evaluate Iranian stock market and also more precisely locate the position of the country, as a whole, in a universe of investment opportunities. Mofid Securities is a leading brokerage firm in Iran. For years, Mofid played a key role in developing and improving services offered in the brokerage industry. Developing the first generation of online trading in Iran is only one of steps it has taken to increase the standards of investment and trading. And nothing would grow from a land not seeded. This is why Mofid has a strategy of continues investment on its business. And the most important part of this investment has always been on human resources; the people whose primary task is to make Mofid a reliable partner for its clients. After reading this report, questions might arise about different aspects of the Iranian capital market. So please feel free to contact Mofid for elaboration and further details that might help you find the best answers. This is the way we think the primary task is fulfilled. Sincerely Yours, HAMID AZARAKHSH President Mofid Securities IRAN—Sleeping Giant at a Turning Point 1 Content Chapter 1 The Iranian Economy..........................................................4 Demography and Geography...................................... 6 Economy...................................................................................... 8 GDP............................................................................................ 8 Exports & Imports................................................................ 10 Iran; A Key Energy Player................................................... 12 Currency....................................................................................14 Inflation....................................................................................15 Ecomomic Outlook..............................................................16 20 Interesting Facts about Iran................................17 This Report is Created in March 2014. All the data provided are up to the end of 2013. 2 IRAN—Sleeping Giant at a Turning Point Chapter 2 Chapter 3 The Iranian Stock Market.............................................18 Mofid Securities....................................................................46 Tehran Stock Exchange...................................................20 Introduction........................................................................48 20 Largest Companies.................................................. 21 Key Numbers............................................................................49 Returns & P/Es.........................................................................22 Leadership...........................................................................50 3 Key Industries......................................................................23 Key Persons................................................................................51 Stock Market Outlook......................................................24 Timeline.........................................................................52 Iran Capital Market Structure......................... ........... 25 Mofid’s Performance in 2013......................................54 Sectors Summary................................................................ 26 Services...............................................................................55 Oil, Gas and Chemicals ....................................................... 26 Partners...............................................................................56 Metals and Minerals ........................................................... 28 Financials...........................................................................30 Holding Companies.............................................................32 Industrial..................................................................................34 Telecommunication............................................................36 Consumer Cyclical................................................................38 Other Materials......................................................................40 Pharmaceuticals....................................................................42 Consumer Non-Cyclical......................................................44 IRAN—Sleeping Giant at a Turning Point 3 01 Chapter One The Iranian Economy Demography and Geography Geography Transport System Iran is one of the largest countries in the Transportation in Iran is inexpensive Middle East; the country of mountains because of the government’s and deserts. Eastern Iran is dominated subsidization of the price of gasoline. by a high plateau, with large salt flats More than one million people work in and vast sand deserts. The plateau is the transportation sector. surrounded by even higher mountains, Dozens of cities have airports that serve 77,270,287 including the Zagros to the west and Population passenger and cargo planes. Iran Air, the the Alborz to the north. Its neighbors oldest airline, was founded in 1962 and are Turkmenistan, Azerbaijan and operates domestic and international Armenia on the north, Afghanistan and flights. All large cities have mass transit Pakistan on the east, and Turkey and systems using buses, and several private 29.86 Iraq on the west. Average Age companies provide bus service between cities. Population Iran’s population increased dramatically Economy 1.24% during the late half of the 20th century, Iran’s economy is a mixture of central Population growth rate reaching about 75 million, according planning, private ownership, village to the 2011 population census. By the agriculture, and small-scale private end of 2013, Iran’s Population is about trading and service ventures. 77,270,287. Iran is ranked as an upper-middle 10,498,675 income economy by the World Bank. In Climate University Educated the early 21st century the service sector Iran’s climate ranges from arid or contributed the largest percentage semiarid, to subtropical along the of the GDP, followed by oil industry, Caspian coast and the northern forests. manufacturing and agriculture. The 1,648,195 Central Bank of the Islamic Republic 2 Area (km ) History of Iran is responsible for the stability Recent archaeological studies indicate of Iranian Rial, which serves as the that as early as 10,000 BC, people lived country’s currency. 2,440 on the southern shores of the Caspian, Iran has a broad range of manufacturing one of the few regions of the world industries including oil, petrochemicals, Southern Coastline (km) which according to scientists escaped auto manufacturing, transportation, the Ice Age. They were probably the construction materials, home first men in the history of mankind to appliances, food and agricultural goods, 740 engage in agriculture. pharmaceuticals and information technology. Northern Coastline (km) Language Official language of Iran is Persian. Persian serves as a lingua franca 11,106 in Iran and most publications and broadcastings are in this language. Railway length (km) 6 IRAN—Sleeping Giant at a Turning Point Demography and Geography Population Comparison (Million) Countries Population 1. Egypt 84.6 2. Iran 77.4 3. Turkey 75.6 4. Algeria 37.9 5. Morocco 32.9 6. Iraq 31.1 7. Saudi Arabia 29.2 8. Yemen 23.8 9. Tunisia 10.7 10. Azerbaijan 9.4 11. UAE 8.3 12. Jordan 6.5 13. Libya 5.7 14. Lebanon 4.2 15. Kuwait 2.8 16. Oman 2.8 17. Qatar 1.9 18. Bahrain 1.2 Note: MENA (including Turkey & Azerbaijan) Syria and Palestinian National Authority are excluded on lack of data. Source: Wikipedia Iran has one of the highest urban growth rates in the world. From 1950 to 2002, the urban proportion of the population increased from 27% to 60%. The United Nations predicts that by 2030, 80% of the population will be urban. Most internal migrants have settled near the cities of Tehran, Isfahan, Ahvaz, and Qom. The Iranian Economy 7 Economy GDP Comparison (2012, Billion USD) Countries GDP 2012 1. Turkey 788 2. Saudi Arabia 711 3. Iran 549 4. UAE 384 5. Egypt 257 6. Iraq 213 7. Algeria 209 8. Qatar 192 9. Kuwait 185 10. Morocoo 96 11. Libiya 82 12. Oman 78 13. Azerbaijan 69 14. Tunisia 45 15. Lebanon 41 16. Yemen 35 17. Jordan 31 18. Bahrain 27 Note: MENA (including Turkey & Azerbaijan) Syria and Palestinian National Authority are excluded on lack of data. Source: IMF 8 IRAN—Sleeping Giant at a Turning Point Economy GDP Composition by end use (%) GDP Composition by sector (%) 51% Service 45% Houshold 21% Industry 11% 33% Investment 9% 17% Oil & Gas 13% Goverment 13% 17% 11% Agriculture 51% 9% Net Export 45% 21% 33% Service is the largest segment of the economy that accounts for 51% of GDP Iran's GDP (Billion USD) 600 549 514 Since 2004, Iran’s GDP almost tripled from $163 500 billion to $549 billion. It makes Iran the third largest 423 economy of the region (MENA plus Turkey and 400 356