Sugar, industrial contractors, information and communication and basic metals were the most profitable industries in Tehran Stock Exchange from 21st March-5th December 2017 (around 8 months). The mentioned industries gained 73%, 55%, 46%, 44% and 43% respectively during the mentioned period.
Sugar industry had a leading position in terms of return and the main reason behind was to cancel taxes for importing raw sugar to Iran and that time, it would be allowable for companies to import, as a result, cost of goods sold decreased for sugar producers. But nowadays, government has made a new decision not to allow raw sugar to import to Iran, in fact they have a plan to reach self-sufficiency. There is no doubt that this matter can be the turning point of the companies’ future in this industry according to price increment, but high inventory of sugar could be a barrier in order to reach more gain for the companies in this industry. Companies which produce sugar would gain the high return emerged not only from this matter in long term, but also from the growing rate of IRR/USD in the future. According to OECD and FAO forecasts, global price of sugar would raise during 2018-2026. It would be expected that sugar price till 2026 will be more than the average price of the last two decades. However, one of the major problem of the sugar companies is their financial cost, new economy minister after considering different aspects of the high interest rate which was illogical has reached to conclusion that it was because of serious and chronic problems in banking system in Iran. If the minister’s plan on reform in banking system is performed properly, reduction in interest rate would be anticipated. Consequently, all industries benefit from this pleasant event but some enjoy more specifically. As a result, it seems spring is waiting for sugar industry in these winter days.
The second industry which has been gained after sugar industry is industrial contractor which its root has in the growing number of dam constructions in Iran. The companies have gained the most in this industry are Iran Marine Industrial Co. and Ballast Co. that their ticks in the Tehran Stock Exchange are SDRP1 and BLSZ1. SDRP1 is an industrial contractor company with a capital of 36 Million Dollars (1 US Dollar=41,000 Rial) could sell during the current summer 6 times more compare to spring. This matter happened after the company won the new project of South Pars contract in tender.
The third one is information and communication industry and the reason behind their high return lies in the increment usage of network and also the prospect of this industry as well as the start-up companies in Iran is bright.
The forth is basic metal industry, the fact is that the share of this industry is around 15% in Iran’s capital market. This share was fluctuated mostly around 15% to 20% and sometimes it has reached to more than 30%. As a result, it could be as a leader of the Iran’s capital market as we discussed about it in detail in the “Analyzing Basic Metal Industry and Its Derivatives in Iran” article. By this way, it could be probable that Iran’s capital market follow the trend of this sector.
As we explained in detail in the mentioned article, steel pricing in Iran not only follow steel price in the world, but also the value of Iranian Rial against other currencies especially Dollar. To nutshell, sometimes increasing value of Rial agaist Dollar spurred basic metal industry to be increased in spite of decrement billet and bloom prices in the world. By this way, as in recent months both the value of Rial against Dollar and international steel price in the world were incremental, the basic metal index was one of the most effective industry in Iran’s Capital Market.
In the following, you can see some of the companies’ names that gained the most return in the last 8 months in these four industries.
*Earning Per Share
**The financial year of GSHI1 is Sep2017-Sep2018
