Corporate News & Business
Trade with Thailand up 36% (Financial Tribune, 12 April 2017)
Trade between Iran and Thailand stood at US$ 421 million in 2016, registering a 36% rise compared with the previous year. Iran’s exports to Thailand over the period amounted to $153 million while its imports stood at $268 million, indicating a 67% and 32% growth compared with 2015 respectively. Thailand’s main exports to Iran consist of wood products, rubber, beverages, air conditioners, processed fruit, auto parts, synthetic fibber, electronic machinery and equipment, and paper. Iran, in return, exports cement, steel, scrap iron, fertilizers, chemicals, pharmaceuticals, fresh and frozen seafood, and ceramics to the East Asian country.
Iran to receive 4 ATR airplanes by late April 2017 (Mehr News Agency, 11 April 2017)
Iran’s national flag-carrier airline Iran Air has signed a contract to buy 20 ATR 72-600 from the French-Italian aircraft manufacturer and the first four planes are to be delivered within two weeks Deputy Transport Minister Mr. Asghar Fakhrieh Kashan announced on 11 April 2017. Nine other aircrafts will be delivered to Iran by the end of 2017 and the remaining planes in 2018. In early February 2017, Mr. Fakhrieh Kashan said the value of the deal was about US$ 400 million.
Iran named as Afghanistan’s biggest trade partner (Mehr News Agency, 10 April 2017)
On 10 April 2017, Afghanistan Chamber of Commerce and Industry Spokesman Mr. Seyamuddin Pesarlai said that with US$ 1.8 billions of bilateral trade, Iran is now Afghanistan’s biggest trade partner. 80% of the transactions relates to imports from Iran and the rest from Afghan exports to Tehran. Mr. Pesarlai pointed to the 50% decrease in Afghanistan-Pakistan trade ties, adding that the two countries previously had more than US$ 2 billion-worth trade exchange, a figure that has now dropped to US$ 1 billion.
Finance
Iranian banks speed up bad loan recovery (Financial Tribune, 12 April 2017)
Since February 2017 when the Cabinet first approved that penalties for non-performing loans (NPLs) could be waived for loans up to US$ 28,178, about US$ 213 million of fines have been waived and the banking system has recovered more than US$ 426 millions in bad debt, said Chairman of Parliament Planning and Budget Commission Mr. Gholamreza Tajgardoun. The Iranian banking sector’s ratio of non-performing loans stood at 11% by 20 September 2016, down from 13.6% in September 2014. According to Central Bank of Iran (CBI) Governor Mr. Valiollah Seif, immaturity of the capital market, dominance of banks in financing the business sector and insistence on using banks’ limited resources for solving structural problems of the economy were the main causes of growth in NPLs in recent years. A study conducted by the CBI in in November 2016 found that covert internal workings of Iranian banks have largely contributed to their high rate of non-performing loans. The CBI governor called on bankers to continue taking calculated measures until the ratio reaches the set 5% goal.
CBI sets new foreign currency rules (Financial Tribune, 12 April 2017)
The Central Bank of Iran has issued a new directive in line with anti-smuggling laws, based on which individuals holding more that €10,000 would be subject to an official probe. Retaining an amount of foreign currency higher than the set limit is allowed only if the applicant obtains one of the following documents: a bank’s receipt or any other document indicating that the amount has been reimbursed by a bank; an authorized receipt from an exchange house registered in CBI’s SANA system; or a printed receipt containing the tracking code that indicates the currency was declared when entering the country. Someone found in possession of a larger amount of hard currency than the set limit without the required documents, will either need to open a foreign currency account in one of the banks or sell the currency to a bank or licensed exchange within three months. In November 2016, the CBI also issued a directive requiring travelers and truckers in transit entering the country to declare currency valued over $10,000 to the Ministry of Economy’s Financial Intelligence Unit, in line with international anti-money laundering statutes.
Companies from 18 countries to attend 9th ICM in Tehran (Tehran Times, 12 April 2017)
More than 40 companies from 18 countries are going to attend the 9th International Course on Islamic Capital Markets (ICM 2017) which is due to be held in Tehran on 18-20 April 2017. Iran’s Securities and Exchange Organization (SEO) and Islamic Development Bank (IDB) are co-organizers of the international event which focuses on Islamic capital markets. According to SEO’s Public Relations Office, Belgium, Burkina Faso, France, Ivory Coast and Palestine will be attending the event for the first time.
Iran’s inflation rate down 4.5% yr/yr (Tehran Times, 12 April 2017)
The Statistical Center of Iran put the country’s inflation rate at 9.8% in the past Iranian year 1395 (21 March 2016-20 March 2017), showing 4.5% drop from its preceding year. Inflation rate in the last month of the past calendar year (19 February 2017- 20 March 2017) stood at 11.9%, according to the Central Bank of Iran (CBI). Curbing inflation was one President Mr. Hassan Rouhani’s major electoral campaign promises. Under the previous administration, inflation skyrocketed to over 44%.
Tehran, Berlin agree to fund small, medium-sized enterprises (Mehr News Agency, 11 April 2017)
Iran’s Ministry of Cooperatives, Labour and Social Welfare has signed a Memorandum of Understanding with the German Savings Banks Association (DSGV) in a bid to help develop and expand financing of micro, small and medium-sized enterprises of Iran and to strengthen friendly relations and bolster bilateral ties. The joint project covers workshops, seminars, management training to bank clerks, advising on procedures, business processes, job network management, mapping a financing system for small and medium-sized enterprises as well as recommendation on related policies.
Oil & Gas
South Pars phases 17, 18 to be completely inaugurated by 20 April 2017 (Tehran Times, 11 April 2017)
Phases 17 and 18 of Iran’s South Pars gas field (in the Persian Gulf) will be completed and inaugurated by 20 April 2017 said Mr. Mohammad-Reza Chalipa, the operator of these phases. Phases 17 and 18 are currently injecting 46 million cubic meters (mcm) of gas per day to the national network and the figure will reach 56 mcm per day once completed. According to Managing Director of the Industrial Projects Management of Iran Company (IPMI) Mr. Hassan Boyeri, some 15.5 billion cubic meters of gas has been injected from these phases to the national network since their first train of gas sweetening units was put into operation in December 2014-January 2015. The official put investment for South Pars Phases 17 and 18 at US$ 8.1 billion.
Economy & Society
Iranian chain stores create 25,000 direct jobs (Financial Tribune, 12 April 2017)
Head of Iran’s Chain Store Union Mr. Amir Khosro Fakhrian has said that Iranian chain stores have created close to 25,000 direct jobs. Around US$ 1.3 billion worth of investments have been made by the public and private sectors in this field. At present, some 2,500 chain store branches are active across the country. According to Deputy Minister of Industries, Mining and Trade Mr. Mojtaba Khosrotaj, Iranian chain stores have a 5% share in the retailing of goods across the country. A memorandum of understanding on electronic trade and joint investments in hypermarkets and small chain stores was signed between South Korea’s largest retailer Emart and Iran’s Refah Chain Stores Company last year. According to Refah’s CEO Mr. Farshid Golzadeh Kermani, the goal is to develop production of Korean products in Iran with a focus on technology transfer and quality improvement. Refah has recently offered 52% of its shares worth about US$102 million belonging to four major banks to investors in the domestic stock market. Refah Chain Stores Company is one of the top 100 national brands with 230 branches across the country. Its nominal capital is estimated at around US$ 268.52 million.
By Natela Outtier
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