Summary - Turquoise Partners

 
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Summary - Turquoise Partners
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
Summary - Turquoise Partners
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$9,290 average over the last twelve
                       months. The total number of shares traded on the TSE decreased by 12%
                       compared to a monthly average over the past year of 193 billion shares.
Million US$

                    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$8,987 million monthly average over the past year. The total number
                                                                                                                 of shares traded on the TSE decreased by 69% compared to a monthly
                                                                                                                 average over the past twelve months of 188 billion shares.
Million US$

                    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%
                                                                                     Metal Ores Mining

                                                                                                                        Diversified

                                                                                                                                                                             Related Activities
                                                                                                                                                        Telecommunications
                                                                                                             Monetary
                    Chemicals

                                                      Metals*

                                                                                                                                                                              And Auto Parts
                                                                                                                                      Pharmaceuticals
                                                                      Petroleum

                                                                                                                                                                              Motor Vehicles

                                                                                                                                                                                                          Other
                                                                      Refined

                                                                                                                                                                             Computer &

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

                                                                            7 Iran Investment Monthly
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%                                                                        Saudi Arabia                                  37.6
                                                                                                              5%
                                                                                                                                              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
      Sector Breakdown (%)

                                                                                Sector Breakdown (%)

                                                                                                                                                  Sector Breakdown (%)

                                 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
                                40.1   Others		                                                        23.4   Others                                                     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%                                                                        Saudi Arabia                                  31.4
                                                                                                               5%
                                                                                                                                              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
      Sector Breakdown (%)

                                                                                Sector Breakdown (%)

                                                                                                                                                  Sector Breakdown (%)

                                 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
                                42.2   Others		                                                        23.3    Others                                                    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 Investment Company of Iran was founded in 1975 as the
                                                                                                                                           National
                                                                                                                                           Investment               46.7                   1.0%
                                          investment arm of Tejarat Bank and Pension Fund. The company is                                  Company of Iran
                                          active in investment in various sectors across listed equities.

                                         Is one of the largest pharmaceuticals holding Companies with
                                         more than 20 subsidiaries. Company has acquired 14 percent of
                                                                                                                                 Barkat Pharmaceutical
                                                                                                                                 Group
                                                                                                                                                                    21.3                   0.5%
                                         the country total pharmaceutical market and could produce more
                                         than 420 different products through its subsidiaries.
Top 5 Traded by Value

                                          Founded in 1962, Iran Khodro Industrial Group (also
                                          known as IKCO) is the leading Iranian vehicle
                                                                                                                          Iran Khodro
                                                                                                                                                                     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
                                          under the name of General Tire and Rubber of
                                          Iran in the country. It supplies major Iranian
                                                                                                                  Iran Tire Co.
                                                                                                                                                                     5.3                   0.1%
                                          manufacturers, including major automakers
                                          such as van, cargo, bus, farm and road
                                          construction tires

                                                                                                       Tehran Oil Refining
                                          Tehran Oil Refining Co. was founded
                                          in 1971 with initial capacity of 85,000
                                          BPSD. The company is involved in
                                                                                                       Company                                                       4.1                   0.1%
                                          crude oil and hydrocarbon refining.

                                                                                                                                                                  Market Cap      % Total Market Cap.
                                                                                                                                                                  (million US$)
                                                                                                                                         Persian Gulf
                                         In Persian Gulf International Transportation founded in 1989 as a joint
                                         private stock in Iran and was listed in 2010 in Tehran Stock Exchange.
                                                                                                                                         Petrochemical             11,582                 5.7%
                                         The company operates as a distributor of products and goods across the
                                                                                                                                        Industry
                                         country.

                                                                                                                                 Mobarakeh Steel
                                         Esfahan Mobarakeh Steel Company, one of the largest industrial
                                         complexes in the country, started its operation in 1991 with a
                                                                                                                                 Manufacturing                     11,322                  5.6%
                                         nominal capacity of 2.4 million tons per annum. The company
                                         produces more than 50% of Iran’s steel and operates in seven
    Top 5 by Market Capitalization

                                         industrial complexes.

                                         In 1972, Sarcheshmeh Copper Mines Joint Stock Co                               National Iranian
                                         of Kerman was established and, later, in 1976, it was
                                         renamed to National Iranian Copper Industries Co. to
                                                                                                                        Copper Industry Co.                        10,087                  5.0%
                                         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
                                         in 1986, The company has a diversified sector
                                                                                                             Investment
                                                                                                            Company                                                 6,323                  3.1%
                                         investment portfolio including oil & gas, mining,
                                         pharmaceutical, energy, cement and banking
                                         sectors.
                                                                                                     Chadormalu Mining
                                         Founded in 1991, Golgohar Mining &
                                         Industrial Company is one of the largest
                                         iron ore and iron pellet producers in Iran.
                                         The company operates in combined
                                                                                                     and Industrial
                                                                                                     Company                                                        5,161                 2.5%
                                         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$)

                                          Mellat Bank was established in 1979 with the merger of ten pre-                                     Bank Mellat           10.2                   0.6%
                                          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
                                         banking establishment offering retail, commercial                                        Bank Pasargad                      8.5                   0.5%
                                         and investment banking services. The company was
                                         established in 2005 as a part of the government’s
Top 5 Traded by Value

                                         privatization of the banking system.

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

                                                                                                                  Iran Khodro
                                         Founded in 1962, Iran Khodro Industrial Group
                                         (also known as IKCO) is the leading Iranian
                                         vehicle manufacturer. IKCO produces c.65%
                                                                                                                                                                     7.2                   0.4%
                                         of all domestic vehicles, and is the largest
                                         automotive manufacturer in the Middle East.

                                                                                                                                                                     5.9
                                         Tejarat Bank was founded in 1979
                                         after the implementation of the Banks                               Tejarat Bank                                                                  0.3%
                                         Nationalization Act and the subsequent
                                         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
                                         in the country, started its operation in 1991 with a nominal capacity of 2.4                      Manufacturing           11,309                 5.6%
                                         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
                                         joint private stock in Iran and was listed in 2010 in Tehran Stock
                                                                                                                                 Petrochemical
                                                                                                                                 Industry
                                                                                                                                                                   10,811                  5.3%
                                         Exchange. The company operates as a distributor of products and
                                         goods across the country.
    Top 5 by Market Capitalization

                                         In 1972, Sarcheshmeh Copper Mines Joint Stock Co                               National Iranian
                                         of Kerman was established and, later, in 1976, it was
                                         renamed to National Iranian Copper Industries Co. to
                                                                                                                        Copper Industry Co.                        10,243                  5.1%
                                         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
                                                                                                                                                                    6,927
                                         Social Security Investment Company established
                                         in 1986, The company has a diversified sector
                                                                                                             Security Investment                                                           3.4%
                                         investment portfolio including oil & gas, mining,                  Company
                                         pharmaceutical, energy, cement and banking
                                         sectors.

                                         Founded in 1991, Golgohar Mining &                           Golgohar Mining and
                                         Industrial Company is one of the largest iron
                                         ore and iron pellet producers in Iran. The
                                         company operates in combined plants
                                                                                                      Industrial Company                                            5,881                 2.9%
                                         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
                                                   Tehran Stock Exchange
                                                                                                                                  574.2
                                                                                                                          Iran Farabourse (Junior Market)
                                                   Average Daily Trading Value (million US$)*

                                                          3,531
                                                   Tehran Stock Exchange
                                                                                                                                  156,423
                                                                                                                          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
                                                   Tehran Stock Exchange
                                                                                                                                    10.1
                                                                                                                          Iran Farabourse (Junior Market)

                                                   Market Value (billion US$)*

                                                              7.5
                                                  Tehran Stock Exchange
                                                                                                                                  408.3
                                                                                                                          Iran Farabourse (Junior Market)
                                                   Average Daily Trading Value (million US$)*

                                                          1,880
                                                   Tehran Stock Exchange
                                                                                                                                  109,042
                                                                                                                          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
                                          Source:IMF
Results: Winter 1399
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
 24 May 2021
                                                        Fund and its ticker symbol is displayed on the IFB bulletin board
                                                        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
                                    Investment s

                                                          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: info@turquoisepartners.com

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: info@firouzehasia.com

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
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expressly disclaims all warranties as to the accuracy of the content provided, or as to the use of the information for
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SHOULD NOT CARRY OUT ANY ACTION IN BREACH OF U.S. SANCTIONS LAWS.

                                                                                     23 Iran Investment Monthly
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