Whatever the outcome of the US election, it will have its first impact on the depreciation of the dollar. As the election results become clearer and Mr. Biden wins a historic victory that few realists believed so strongly, signals of a falling dollar in Iran But short-term trends brought about changes that affected parallel markets on Saturday. In this memo, we will discuss exchange market rate developments in the shadow of the US election and its impact on domestic markets. Please be with Artan Press.
*** US elections, the beginning of economic change
With Mr. Biden overtaking Trump in the US presidential election, scenarios for US presidential change around the world have intensified. Since Iran had suffered the most from the Trump administration’s foreign policy, the idea of green days in the stock market and a sharp drop in foreign exchange prices was very tolerable. This scenario happened to some extent, but the hands behind the scenes did not allow the dollar to fall to more realistic rates, so that there is still room for some speculators to fluctuate.
*** Dollar remittance transactions
Senate remittance dollar was 26.720 to 26.937 Tomans, dollar based on Dirham was 27.246 Tomans, free dollar was 25.550 Tomans in the last update on Saturday, November 8, 1999. Dirham remittance is traded at 6800 Tomans, the dollar equivalent of which is 24,980 Tomans. Some activists believe that 6,000 Tomans will be in strong demand in the current market conditions and the market reaction to this level should be examined. If we see price stability in these prices, the price of the dollar can decrease to 22,000 tomans in the short term.
*** Check the sensitive dollar support channel
This figure has repeatedly been important as a support channel for the dollar. All the evidence shows that the normal behavior of the dollar exchange rate should break this channel downwards. But we have to see what the role of the governing organizations will be in the dollar case. Is there a will to reduce the dollar rate to its real value, which is around 17,000 tomans, or will we see emotional and cross-sectional growth in the dollar price?
*** Central bank performance to control the foreign exchange market
Dollar market participants believe that the central bank’s response to the current supply and demand conditions of the dollar will be the most important signal. The number in which the national exchange office is willing to buy shows important points. Some advise the central bank to buy dollars from the market at a point where supply is heavy, given the future uncertainties and to be able to manage the market during possible bargaining and negotiations. This issue can keep the dollar exchange rate around 20,000 Tomans in the short and medium term and keep the country’s economy in currency fluctuations due to political pressures that Iran is likely to face.
*** Unexpected supply of dollars by the central bank
In the current situation and in accordance with the latest activity of the Central Bank in the market on Saturday, we saw the supply of more than $ 65 million in banknotes in the organized foreign exchange market, which shows the high determination of the Central Bank to control prices. In recent days, the volume of dollar purchases in the market has decreased and more and more people are willing to sell their currency.
*** The fall of the dollar rate is definite
The issue that can be deduced from the current political climate in the world tends to the fact that the fall in the price of the dollar is likely to continue, and given that the dollar has entered capillary in all economic elements of Iran in the medium term will see a decline in rates. We will be the price of goods. Of course, even if Trump were still president, the prices of currency and other commodities could rise slightly again; But prices eventually plummeted because people did not have the purchasing power and there was no rule other than that some speculated and fluctuated could not excite the astronomical prices of the dollar.
*** The future of commodity markets
Artan Press analysis team predicts that the price of goods will be out of the atmosphere of increasing growth and inflation for at least the next 4 years, and Iran will resume the economic strategies of the first term of Rouhani’s presidency. This may be accompanied by a slight spike in the recession, but it will be blue on the fire of inflation and most likely with future negotiations between the Iranian and American sides, we will see the stability of commodity prices and exchange rates.
*** End of speculation game in stock and currency
Our prediction is that the game of speculation and volatility and trading will come to an end, and in the futures market, analysts and those who have paid attention to the financial reports of companies on the stock exchange or the value of banknotes on the Forex exchange will be the main market winners. Another issue that is worth mentioning is that if Biden is elected President of the United States, the production infrastructure should be put on the agenda during the political openings so that the supply chain of the country’s basic goods is not destroyed by creating political crises.
*** Move towards real prices in currencies
Our idea would be that the depreciation of the dollar rate could continue up to 15,000 tomans if external factors did not interfere with the actual supply and demand. The major players in this currency will see a drop in prices in the range of 15 to 20 thousand tomans, which can be a spiritual amount on the lifeless structure of Iran’s economy and the purchasing power of consumers.
*** Coin developments after the US election
The price of coins has not been deprived of the recent fluctuations and has experienced a decrease of 4 million Tomans from its peak point. All these events in It is a circumstance that the official result of the elections in the United States has not been determined yet. This raises the question of how much the dollar and gold exchange rates have risen due to market excitement, which is such a change in behavior? The more we answer this question, the more we will realize the depth of speculation, the financial bubble of financial markets and assets in the last few years. The issue whose first impact has been the decline in social welfare indicators in the last few years.
*** Economic outlook in Biden’s government
If the Biden government is formed, part of the sanctions are lifted and it returns to Borjam, we can expect further reductions, and this can reduce the heavy bubble of dollars, gold and coins. In such circumstances, we will see the re-growth of stock exchanges and capital markets in Iran. Because the stock market will be a safe haven for the capital of individuals in the long run. It is not clear how big the dollar bubble is and whether we can expect it to return to 15,000 tomans and 17,000 tomans with the return of the United States to the UN Security Council and the lifting of sanctions, so that we can actually see the growth of parallel markets such as stock exchanges and OTC.
*** Latest news from Iran exchange market
Simultaneously with a 2% drop in the total index of the Tehran Stock Exchange on Saturday, small shareholders maintained their position as sellers and recorded a positive net sales. This drop in the index was very unexpected in the context of the US election that signaled growth. But with all these conditions, yesterday we witnessed the transfer of a stock worth 483 billion and 225 million Tomans in the real to legal direction. The trading process on the Tehran Stock Exchange in the coming days, despite this decline, will definitely be considered upward. The grammatical form of the stock market falls victim to the economic policies of the major players in this market.
*** Cross-sectional decline of the capital market
Some considered the forecast of today’s stock market decline to be reasonable and believed that if Biden wins and the capital market depreciates by reducing the dollar rate, this may not be a big event for a short time and for a day. Continuation of this trend can make the stock market a victim of policy makers’ decisions. The stock market is the first representative to reform the financial markets, and it has been practically two months since the stock market began to decline, and events such as the US election should be the beginning of an upward trend in the stock market, if plans continue to reduce real profits in the domestic stock market. Be.
*** The outlook for the Commodity Exchange in the post-Trump era
In the current context of the commodity exchange, those industries whose products are priced in dollars also have the greatest impact on the depreciation of the dollar. And for a short time, they will take a downward path. But with the entry of smart money into the stock market, this trend will be accompanied by significant growth in the medium term.
*** Irrational legal sale on the stock exchange
Law is still a seller in the market today, and this has been happening for more than a week. On the one hand, some are trying to keep some stocks falsely by blowing the news that “the trend of price reductions will continue until the government raises stocks”. While analysts know that many refining and industrial stocks are offered at the bottom of their trading prices.
*** Change the stock game to the real side
Legal sales are not always a bad sign, but the continuous sale of legal entities in most symbols and the lack of legal capital inflow into other symbols is definitely not a good sign for the market. What does legal withdrawal mean on this account ?! We expected the total index to stabilize around one million and seven hundred thousand units, but unfortunately at the moment this index fluctuates around one million two hundred thousand units. This index, despite being low, has a tendency to grow, provided that the upward trend of the stock market is not controlled by legal entities.
*** Stock prices on the floor
Many stocks are trading at prices below their core value. Continuation of this trend can lock the Iranian stock market at irrational prices and cause a stagnation in the stock market for years. Similarly, we have experienced this situation with a worse situation in the OTC market, and in practice, transactions take place at very low rates, and even the volume of symbol bases is not filled.
*** Total index on the way up
In previous capital market analyzes, we have pointed out that in general I see an upward trend in the index, but we know very well that reform is an integral part of the financial market. If this correction falsely lasts, it may cause a heavy drop in the stock market.
*** The effect of Biden election on foreign exchange and financial markets
Today, the news of Biden’s election was officially announced and we will actually see significant effects on the country’s foreign exchange transactions and financial markets. The basic metals industry first and foremost petrochemicals will see large changes in their stock exchange rates in the short term. It is likely that these stocks will experience price declines in the short term as the dollar depreciates. However, by choosing Biden, the trend of rising oil and mineral prices will increase the income of this group of stock exchanges and practically change the path in favor of shareholders in these sectors. Give.
*** Refining indifference to the US election
In the refining group, we have to wait for the government’s behavior in the capital market and pricing. Therefore, our prediction will be that the US presidential election will have the least impact on the prices of this group, and in practice, the approvals of the recent days of the Ministry of Oil will determine the price path. Most likely, with the reopening of the first refining transactions, we will see the public offering in the short term to provide liquidity. But the share of the first refining in the next six months will have a very reasonable return.
*** Negative exchange market will not be stable
In short, we would like to inform our dear audience that the negative atmosphere of the market in the current days is the last attempt of speculators to collect shares from the real hands and we should look at this market with a little reflection. Even car companies will experience more favorable conditions in the coming days. Many analysts believe that these stocks have been accompanied by high price growth, and we will actually see the legalization of these stocks in place.
This analysis is flawed in many ways, and we will suffice with just one issue, and that is that in the last two months, about 70% of the legal shares in the automotive group have been transferred to the real one, and in fact the code-to-code path is challenging for legal entities. Has been accompanied. Therefore, the market will continue to grow gradually in a real and logical way.