Iran Market Reporter 16

Iran Market Reporter

ADDRESSING THE NEEDS OF INVESTORS

Mofid Securities Co.Member of TSE(Tehran Stock Exchange)Member of IME(Iran Mercantile Exchange)Member of Farabourse

Contact Person: Mr. Seifollahit 009821 8190 1165f 009821 8190 1022e [email protected] www.emofid.comw www.mofidkala.com

IRAN MARKET REPORTER Is produced by Mofid Securities Co.Distributed electronically via email.

Top Ranked2011

The First Ranked Broker in 2007, 2008, 2009, 2010 and 2011

Top Mutual Fund Manager in 2009

VOLUME 2ISSUE 8AUGUST 201216

2 Iran Market Reporter No. 16 Aug 2012 ( Issue 8, Vol. 2) en.emofid.com

Contents

8 FundPishro, Momtaz and Pishtaz (all three funds are managed by Mo-fid) where placed 6th, 8thand 10th amongst 61 mutual funds active in the market. All funds index also rose by 6.3 percent in august.

14 News“The Securities and Exchanges Organization (SEO) released the latest annual ranking of the brokerage firms for both securities and commodi-ties exchanges. Mofid Securities is successfully ranked in the first place for the best brokerage in both securities and com-modities exchanges and it is achieved among 87 securities brokers and 70 commodities brokers.”

3 OverviewIn August 2012, the TSE All Share Index (TED-PIX) rose for the first time in four months. The index initially fell to 23767.50 before rebounding to as high as 24649.00 in the latest trading day of August. The 0.26 percent in-crease comes after the prices hit a technical support which marks the low of November last year. The increase also suggests the market might have been bot-tomed out in August.

6 StockCompared to last month the trade volume and value dropped by more than 18 percent. How-ever it seems that once again traders are gain-ing confidence in the market.

12 CommodityHaving only 17 working days in august, IME total trade value dropped by 32 percent compared to last month. However the export ring were more ac-tive as the value of trades increased by 10 percent in august.

Mofid Securities is the largest and top ranked brokerage company in Iranian capital market. It was the first broker to introduce Online Trad-ing platform to iranian traders and now holds a market share of 30 percent of total online transactions of Tehran stock exchange. In august, the firm was chosen the best broker-age company by The Securities and Exchange Organization of Iran for the 5th year.

Top Ranked2011

2 Iran Market Reporter No. 16 Aug 2012 ( Issue 8, Vol. 2) en.emofid.com 3en.emofid.com Iran Market Reporter No. 16 Aug 2012 ( Issue 8, Vol. 2)

OverviewTSE Main Sectors (Aug 2012)

INDEX 31-Aug PERCENT

Metallic Ores 6,079.40 5.69

Basic Metals 15,913.40 4.86

Petro. Products 53,376.10 3.76

Conglomerates 2,218.00 3.58

TEDPIX 24,649.00 0.26

Pharmaceuticals 1,365.70 -0.38

Cement 252.50 -0.90

Foods ex. Sugar 771.80 -1.15

Banks 286.20 -1.34

Financial intermediation 555.00 -2.01

Chemicals 1,375.70 -2.53

Telecom 264.30 -3.54

Vehicles 4,890.90 -6.97

Real Estates 471.50 -8.04

Crude Oil (WTI) 96.43 10.05

Copper 7,573 0.64

EURUSD 1.2578 2.17

Global prices for comparison only

TSE Seems Bottomed out in AugustIn August 2012, the TSE All Share Index (TED-PIX) rose for the first time in four months. The index initially fell to 23767.50 before rebounding to as high as 24649.00 in the latest trading day of August. The 0.26 percent increase comes after the prices hit a technical support which marks the low of November last year. The increase also sug-gests the market might have been bottomed out in August.

At the same time, based on recent economic reports many investors think that the government may take action to encourage activities. Accord-ing to the latest report from the national statistics office, unemployment rate in spring increased to 12.9 percent which is 0.6 percent higher from the same period last year. In addition, increase in inflation and cost of production might eventually lead to approval from the government for higher sales prices. Another important factor in posi-tive performance of August is fall of P/E ratios to historical levels, creating a buying opportunity for many investors.

12 Sep 2010 2 Jan 2011 24 Apr 2011 14 Aug 2011 4 Dec 2011 25 Mar 2012 15 Jul 2012

17771.45

18787.30

19803.15

20819.00

21834.85

22850.70

23866.55

24882.40

25898.25

26914.10

23975.90

TSE All Share Index (TEDPIX)

August 8

Support

MofidTrader 5 6 ,Weekly 2010.09.12 00:00 - 2012.09.16 00:00 (2012.09.18 12:20)


Metallic Orse Lead the AdvanceIron ore producers advanced as much as 5.69 percent in August as the rising exports points to strong demand while the higher exchange rate of US dollar supports higher revenue forecasts.

In addition, the Tehran Stock Exchange intro-duced an embedded equity put options for the two main iron ore producers; Chadormalu and Gol-e-Gohar. This contract ensures an annualized return of at least 20 percent in maturity. The daily amount of supply is relatively limited and there is no secondary market for the contract. However, it raised confidence among investors and the in-crease in share prices of these two large companies had a considerable impact on the positive perfor-mance of TEDPIX in August.

Basic Metals Rise on Increase in Local and Global PricesBasic metals index, which includes steel and industrial metal producers, also rebounded in August, marking the first monthly increase of the index in four months.

Steel makers came to focus when the price for the steel profiles jumped as much as 9 percent ear-lier this month in the Iran Mercantile Exchange (IME). The considerable difference between price of tin-coated steel in the IME and the market is still in place which might make future adjustments inevitable.

Furthermore, an industry report showed that world production of sponge iron increased by 1.2 percent to 4.73 million tones from the prior month, suggesting the demand may increase in months ahead.

Finally, industrial metal producers enjoyed from

both strengthening USD and a nice rebound in global prices. LME Copper contracts for example erased earlier losses after German chancellor An-gela Merkel’s support for ECB’s bond-buying plan raised confidence in global markets.

Petrochemical Producers Rise on SubsidiesAmong the main TSE sectors, petrochemical pro-ducers were the third best sector in August. Stock prices rose as the refineries got subsidies for fuel transportation from the government.

The new step resulted in positive adjustments and increase in share prices. For instance, Tabriz refinery, the third largest refinery by market value, jumped as much as 32 percent on August 25 when the company raised its EPS forecast by 87 percent. Bndar Abbas refinery, the largest company in this group, also jumped 16 percent the same day.

Overview

3 Apr 2012 27 Apr 2012 22 May 2012 18 Jun 2012 10 Jul 2012 1 Aug 2012 23 Aug 2012

7148

7338

7528

7718

7908

8098

8288

8478

8668

8858COPPER - London Metal Exchange

August

7573

MofidTrader 5COPPER,Daily 2012.04.03 00:00 - 2012.09.18 00:00 (2012.09.18 12:24)


Overview

Auto Makers Fall for Fifth MonthsShare prices of car makers fell in August for the fifth consecutive month. The 6.97 percent decline in the index is also the second worst performance among the main TSE sectors. Earlier this month, a report from the Ministry of Industry, Mine and Trade (MIMT) showed a slight monthly increase in production. However, total production for the first four months of the Shamsi year (April through July) is still 37.4 percent lower from the same period last year.

On the other hand, there are some positive devel-opments. A main car maker, SAIPA, joined others to apply for an increase in prices. The widening gap between price of cars at manufacturer and in the market also supports expectations for higher prices.

Home Builders Struggle with Taxes and RecessionReal estate sector is not in good shape as higher

prices and weak spending power resulted in an unusual recession in summer. The new tax policy is another challenge for the housing market as the realtors are asked to charge five percent VAT from each side of any home purchasing or renting contract.

8 Jul 2012 14 Jul 2012 29 Jul 2012 4 Aug 2012 8 Aug 2012 14 Aug 2012 27 Aug 2012

3163

3338

3513

3688

3863

4038

4213

4388

4563

4738Tabriz Refinery [PNTB]

August 25

MofidTrader 5,Daily 2012.07.08 00:00 - 2012.09.04 00:00 (2012.09.18 12:45)


Stock | Market Summary

Trade Value (M USD) Trade Volume (M) Number of Trades Number of Trading Days

TSE1 648 3,512 196,877 17

Farabourse2 514 2,407 83,479 171Tehran Stock Exchange 2OTC Market

Tehran Stock Exchange

Value of Index

High Low Average Compared to last month %

Compared to last year %

TEDPIX1 24,649 24,649 23,787 24,201 0.26% -4.54%

TEDPIX (FM) 20,269 20,269 19,621 19,942 0.16% -7.80%

TEDPIX (SM) 35,046 35,046 33,391 34,117 0.70% 13.45%

FFI2 30,543 30,593 29,531 30,033 -0.29% -9.70%

Industry Index 19,664 19,664 18,817 19,212 0.76% -0.08%

TEDFIX 30 1,387 1,387 1,326 1,354 0.35% -14.98%1TSE Dividend & Price Index (All-share Index) 2Free Float Index

TEDPIX


Stock | Average P/E

Highest P/E

Sector Average P/E Market Weight

Refined Petroleum Products 7.06 5.33%

Computer & Related Activities 6.26 1.81%

Metal Ores Mining 5.76 8.78%

Food Products and Beverages except sugar 5.67 1.11%

Basic Metals 5.63 17.67%

Lowest P/E

Sector Average P/E Market Weight

Motor Vehicles And Auto Parts 2.83 3.55%

Technical & Engineering Services 3.19 1.48%

Diversified Industrials (Holdings) 3.79 9.43%

Chemicals & By-products 3.94 11.51%

Banking 4.05 17.82%


Fund | All Funds Overview

Top 10 Best Funds of May

Working Days

NAV(Rial)

Asset Under Man-agement (USD)1

Last Month (%)

Last 6 Months (%)

Last 12 Months (%)

Since Inception (Compound Return)

Aryan 1,560 2,626,118 825,938 14.70 18.40 38.70 25.40

Refah 796 1,360,071 983,768 12.70 -4.30 -16.70 15.20

Saderat Bank 1,624 2,389,551 2,160,930 11.40 0.60 -0.40 21.60

Maskan Bank 917 1,970,987 874,878 9.80 5.60 20.10 31.00

Kaspian 1,506 1,559,148 412,072 9.60 -3.60 -3.60 11.40

Pishro2 508 1,115,099 7,872,186 9.40 3.60 6.00 8.20

Boursiran 1,149 3,694,473 14,973,491 9.30 9.40 21.60 51.50

Momtaz2 936 2,189,034 9,790,457 9.20 0.10 0.90 35.80

Isatis 935 1,667,417 604,649 9.10 -7.70 -11.30 22.10

Pishtaz2 1,584 4,398,139 3,938,254 8.90 2.50 0.70 40.80

All Funds Index3 6.30 -2.10 -1.101USD to Rial exchange rate: 12,260 2Managed by Mofid 3Including 61 Mutual Funds


Fund | Pishtaz Mutual Fund

CommentaryLast month Tehran Stock Exchange main index (TEDPIX) and blue-chip index (TEDFIX 30) had a slight rise of 0.26 and 0.35 percent. After recent corrections it seems that traders are gaining confi-dence in stock markets.

As we reviewed last month, many stock prices are at their support levels and their P/E ratios are at the lowest levels.

Considering the circumstances, we believe that some specific sectors such as Basic Metals and Metal Ores Mining are very attractive to invest and we are planning to expand our investments in these sectors.

Pishtaz had a rise of 8.9 percent over the last month mostly due to its balanced portfolio of commodities producers companies. Almost 20 percent of our portfolio includes different bonds and sukuks with annual return of 20 percent. These bonds are asset backed or guaranteed by the government.

Fund’s Composition Percent

Metal Ores Mining 16.99

Chemicals & By-products 10.80

Farabourse 9.70

Basic Metals 7.82

Banking 7.24

Other Industries 47.45

Pishtaz Mutual Fund

Inception date May. 9, 2008

Working Days 1,584

Asset under managementM Rials 48,283

1 Month 8.90%

3 Month -1.90%

6 Months 2.50%

12 Months 0.70%

Life (Compound Return) 40.80%

NAV (Rial) 4,183,999

12 Months Hight 4,783,727

Low 3,967,224


Fund | Momtaz Mutual Fund


Technically, many stock prices are at their sup-port levels and considering the P/E ratio level and higher price of US dollar they seem very attractive at these levels.

Momtaz had a rise of 9.2 percent over the last month and placed the 8th best mutual fund of Au-gust. we have a balanced portfolio of commodities producers companies and bond. We expect these companies prices to rise in the next three months.




Telecomunication 9.43

FaraBourse 8.72

Basic Metals 7.65


Momtaz Mutual Fund

Inception date Feb. 16, 2010

Working Days 936


1 Month 9.20%

3 Month -3.30%

6 Months 0.10%

12 Months 0.90%


NAV (Rial) 2,080,282


Low 1,968,300


Fund | Pishro Mutual Fund

Pishro Mutual Fund

Inception date Apr. 20, 2011

Working Days 508


1 Month 9.40%

3 Month -0.90%

6 Months 3.60%

12 Months 6.00%


NAV (Rial) 1,059,387


Low 951,788


Technically, many stock prices are at their sup-port levels and considering the P/E ratio level and higher price of US dollar they seem very attractive at these levels.

Pishro had a rise of 9.4 percent versus a market in-dex decline of 0.26 percent. Pishro has a balanced portfolio and has invested in top leading stocks of the market. We increased our positions in metal Ores Mining and Chemicals & By-products as we expect a rise in these sectors in the following months.




FaraBourse 11.42

Telecommunication 7.32

Basic Metals 6.46



CommodityIran Mercantile Exchange Summary

Groups of Products

Type Value(M Rials)

Value (USD) Volume (MT) % Value previous month (USD)

Industrial and Mineral

Export Ring 0 0 0 1% 40,799

Domestic Ring 10,522,970 858,317,262 687,127 65% 640,056,850

Total 10,522,970 858,317,262 687,127 65% 640,097,649

Agricultural Export Ring 0 0 0 0% 0

Domestic Ring 242,815 19,805,456 23,977 2% 6,794,648

Total 242,815 19,805,456 23,977 2% 6,794,648

Oil & Petro-chemical

Export Ring 1,751,800 142,887,460 223,500 8% 86,939,823

Domestic Ring 5,584,280 455,487,766 518,425 25% 299,991,356

Total 7,336,080 598,375,226 741,925 33% 386,931,179

Total 18,101,865 1,476,497,945 1,453,029 100% 1,033,823,477

Industrial and Mineral

Agricultural

Oil & Petrochemical Export Ring

Oil & Petrochemical Domestic Ring


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Mofid Securities stands the first broker for the 5th timeAugust 25, 2012 Sourse: emofid.com

The Securities and Exchanges Organization (SEO) released the latest annual ranking of the brokerage firms for both securities and com-modities exchanges. The ranking is for the period of last Iranian calendar year (starting March 20, 2011 to March 19, 2012).

According to the report from the Securities and Exchange News Agency (SENA), the evaluation process started from the beginning of current Shamsi year (March 2012) and the final results announced in mid-August.

Securities Brokerage Firms Commodities Brokerage Firms

Company Rank Company Rank

Mofid Securities 1 Mofid Securities 1

Saderat Bank 2 Agri Bank 2

Agah Brokerage 3 Agah Brokerage 3

Hafez Brokerage 4 Seavolex Brokerage 4

Bahman Broker 5 Khavarmianeh Brokerage 5

Agri Bank 6 Pars Ideh Bonyan Brokerage 6

Khobregan Brokerage 7 Melli Bank 7

Behgozin Brokerage 8 Mobin Sarmayeh Brokerage 8

Ashena Brokerage 9 Hafez Brokerage 9

Pasargad Bank 10 Sepehr Bastan Brokerage 10

Mofid Securities is successfully ranked in the first place for the best brokerage in both securities and commodities exchanges and it is achieved among 87 securities brokers and 70 commodities brokers. Mofid has been ranked first since 2007, when SEO began to rank the brokerage firms of Iranian capital market.

The Securities and Exchange Organization of Iran (SEO) was established in 2006 after Tehran Stock Exchange demutualization. The SEO is the regulatory authority of Iranian capital market

which is in charge of monitoring all financial institutions including brokerage firms.

Mofid Securities is the largest and top ranked brokerage company in Iranian capital market. Mofid is a member and also shareholder of all three organized exchanges in the Iranian capital market: Tehran Stock Exchange (TSE), Iranian Mercantile Exchange (IME) and OTC Market Iran (FaraBourse). Mofid holds a market share of more than 6 percent of total transactions value in past years.

NewsTop Ranked

2011


TSE Launches New Product; Embedded Equity Put OptionsAugust 15, 2012 Source: TSE.ir

Tehran Stock Exchange introduced embedded equity put options, as its second derivative instru-ment on 15 August 2012.

The new product has been designed to give more assurance to shareholders, particularly retail inves-tors in the capital market and assist them to man-age risks.

This product is launched so that to provide for its holder a minimum return of deposits or securi-ties with the least risk. Major shareholders and the issuers guarantee the minimum return. Holders of the securities can exercise it at the exercise price.

These securities have no secondary market, and only issuers of the options have the right to sell them to a fixed price determined by TSE. In other words, the buyer can only exercise the options at the expiration date.

The daily price of an option is derived from the daily close price of the underlying stock price plus a premium based on the time remaining until the expiration of the option. The price will be deter-mined by TSE and published by seller through trading system.

Trade Value in IME stood higher than 1,484 Billion IRRAugust 6, 2012 Source: IME.co.ir

On August 5th, trade volume in IME trading floor reached to 85,670 MT for various types of Indus-trial, Agricultural, Oil and Petrochemical products which had a total value of 1,484 Billion IRR.

According to the report from IME international af-fairs and public relations, 72,390 MT was the vol-ume dedicated to industrial and mineral products which forms more than 84 percent of total volume of transactions as well as total value for these prod-ucts was equal to 1,275 Billion IRR.

Petrochemical and Oil products was the second favorite ring among IME traders yesterday. Volume of the transaction in this trading ring was 13,280 MT that had the total value of 209 Billion IRR in both local and export IME trading floors.

News

www.emofid.com

About Mofid Mofid Securities Company is the leading brokerage firm mainly active in Iran Capital Market. Mofid creates financial products and offers financial services to its clients and investors. Having a qualified and diverse management team enables Mofid to benefit from coupling local knowledge and presence with global expertise.

Mofid publishes this newsletter, Iran Market Reporter (IMR), in order to keep its readers updated on the latest news and events of Iran capital market, especially Tehran Stock Exchange (TSE), as well as valuable information for individual and institutional inves-tors.

Iran Market Reporter is distributed exclusively via email or hard copy amongst Iranian analysts and potential investors who have worked closely or have been in contact with Mofid Securities Company. Subscription to this newsletter is by referral only or through an online request sent to: [email protected]

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DisclaimerThis material is for information purposes only and does not constitute an offer to sell nor a solicitation of an offer to buy any spe-cific securities.

All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during pro-duction, MOFID SECURITIES COMPANY accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All information is provided without warranty, and MOFID SECURITIES COM-PANY makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained.

This publication does not provide individually tailored investment advice and may not match the financial circumstances of some of its recipients. The securities discussed in this publication may not be suitable for all investors. The value of an investment can go down as well as up. Past performance is no guarantee of future success.

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Iran Market Reporter 16