Summary. October Volume 13, No 142

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1 October 2018: To alleviate tourists concerns over US sanctions on individuals visiting Iran, passports of travellers entering Iran will not being stamped. Photo: Surfiran.com Summary Equity Markets The TEDPIX index and junior Farabourse (IFB) market gained 42% and 43% respectively in IRR terms over the month. Based on the unofficial exchange rate, the month-on-month gains in dollar terms declined by 9% on both TSE and Farabourse markets. Debt Markets From the start of the Iranian calendar year (March 2018) to end-september, total issuance on the fixed income market reached 1.4 billion US$ based on the unofficial exchange rate. Yield to maturity (YTM) remained stable at 28.5% at the end of September. Economic Review This issue reviews the latest updates from World Bank on Iran s macro-economy. 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 centers. *IRR per US$: 104,990 1 Iran Investment Monthly

2 Table of Contents Market Overview Market Insight Performance & Updates Sector Insight Company Overview Market Snapshot TSE & Junior Market Performance Top Ranked Companies TSE Statistics FX Movements Iran s Fixed Income Market Economic Review Latest Updates Macroeconomic Data Turquoise Partners About Turquoise Partners News & Views 2 Iran Investment Monthly

3 Market Insight Portfolio Manager Comments The TSE continued its positive momentum in local currency terms for the fifth consecutive month with the TSE gaining 42% in September. There was a significant surge in trade volumes as retail investors are viewing the equity market as a potential safe haven in combating the severe Rial devaluation that has occurred thus far in The Iranian Rial has lost 52% of its value versus the Euro YTD, which is the sharpest devaluation the country has seen in a 9 month window, since Islamic Revolution over 35 years ago. We maintain our belief that the stock market remains very attractive with significant additional growth potential, and is furthermore, the best performing asset class available to compensate for the weakening of the currency. Shervin Shahriari Chief Investment Officer Historical evidence and data suggest that, with the TSE being heavily weighted towards commodity producers, export driven companies are well positioned to make up for any further declines in the Rial. In the chart below, you can see a normalized track record of the Iranian equity market since 2008 which indicates that, based on historical precedent, the recent round of Rial devaluation should precede an uplift in equity prices, which will compensate investors for the weaker currency: Overall Index - Normalised in USD IRR devalued from 12,260 to 25,000 (104%), between 2012 and 2013 Overall Index - Normalised in USD 10 Years Average 84 56% Source: TSE, Bonbast Source: Tehran Stock Exchange 3 Iran Investment Monthly

4 Market Insight It should be of no surprise that sectors such as banks, pharmaceuticals, automotives and telecommunication have been affected considerably; this is because they are unable to adjust their topline in line with the devaluing currency. However, commodity players, such as miners and basic metals, benefit from having a hard currency denominated revenue combined with a Rial based cost structure. Therefore, these sectors have so far compensated for the 2018 devaluation, and furthermore, were also able to generate a positive performance in real terms due to their increasing profit margins. 4 Iran Investment Monthly

5 Performance & Update Performance & Updates Summary - September 2018 Market Capitalization (billion US$) 191 TSE & Farabourse Junior Market Free Float 21% TSE & Farabourse Junior Market Number of Listed Companies TSE & Farabourse Junior Market TSE Index Performance (US$) 2,4-9.5% (MTD) -49.3% (YTD) TSE Total Turnover (million US$) 2 2,395 m$ TSE & Farabourse Junior Market Dividend Yield (%) 3 7.2% TSE P/E (ttm) 11x 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 market data ending 1396 Iranian calendar year. 4 TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index) The TEDPIX index and junior Farabourse (IFB) market gained 42% and 43% respectively in IRR terms over the month. Based on the unofficial exchange rate, the month-on-month gains in dollar terms declined by 9% on both TSE and Farabourse markets. The TSE s total trading volume surged by 12% reaching to 1.5 billion US$ in September based on the unofficial exchange rate. Trading on the IFB fell 3% on a monthly basis to 889 million US$, based on the unofficial rates. The total number of shares traded on the two markets increased 56% and 51%, respectively. Tehran Stock Exchange & Junior Market Trade by Value 1 - September 2018 Iran Farabourse (Junior Market) Trade Volume (million US$) Tehran Stock Exchange (Main Market)Trade Volume (million US$) Million US$ Source: Tehran Stock Exchange Iran Farabourse Company All figures in US$ are converted from IRR at the unofficial 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

6 Performance & Update Tehran Stock Exchange Trade by Value Monthly Change Total: 12% Average: 7% September Total: 1,507 million US$ Average: 72 million US$ No. Trading Day: 21 August Total: 1,347 million US$ Average: 67 million US$ No. Trading Day: 20 Million US$ Tehran Stock Exchange Trade by Volume Monthly Change Total: 56% Average: 48% September Total: 77,917 million shares Average: 3,710 million shares No. Trading Day: 21 August Total: 50,085 million shares Average: 2,504 million shares No. Trading Day: 20 Million Shares Source: Tehran Stock Exchange All figures in US$ are converted from IRR at the unofficial rate 6 Iran Investment Monthly

7 Performance & Update Junior Market Trade by Value Monthly Change Total: -3% Average: -9% September Total: 889 million US$ Average: 42 million US$ No. Trading Day: 21 August Total: 917 million US$ Average: 46 million US$ No. Trading Day: 20 Million US$ Junior Market Trade by Volume Monthly Change Total: 51% Average:44% September Total: 22 billion shares Average: 1049 million shares No. Trading Day: 21 August Total: 14.5 billion shares Average: 730 million shares No. Trading Day: 20 Million Shares Source: Iran Farabourse Company All figures in US$ are converted from IRR at the unofficial rate 7 Iran Investment Monthly

8 Sector Insight Sector Insight - September Oil & Gas Extraction and Related Services Except Surveying Wood & By-products Metal Ores Mining Utilities Supplying Coal & Lignite Mining Computer & Related Activities Post & Telecommunication Transportation & Storage Tanning and Dressing of Leather Textiles % Sector Performance x 18.5 x 15.1 x 14.2 x 13.6 x Motor Vehicles and Auto Pars Electric Machinery & Apparatus Food Products and Beverages except Sugar Cement, Lime & Plaster Monetary Intermediation - Banks 9.9 x 8.7 x 8.4 x 7.9 x 7.5 x Insurance & Pension Chemical & By Products Basic Metals Financial Leasing Pharmaceuticals P/E 459% 251% 199% 174% 149% Metal Ores Mining Monetary Intermediation - Banks Food Products and Beverages except Sugar Electric Machinery & Apparatus Transportation & Storage -16% -26% -31% -41% -55% Investment Companies Computer & Related Activities Refined Petroleum Products Chemical & By Products Basic Metals %Trading Value 2 Source: Tehran Stock Exchange, Note: Sectors with more than 4 companies included (exp. Telecommunication) 1 Growth of sector s index month on month in IRR term. 2 Growth of trading volume month on month in US$. Unofficial rates are applied. 8 Iran Investment Monthly

9 Sector Insight Sector Insight: Transport Overview The international scoring system uses six key dimensions listed below to benchmark country performance and gives an overall Logistics Performance Index (LPI), which is the weighted average of the country s six scores. 1. Efficiency of the clearance process (i.e. speed, simplicity and predictability of formalities) by border control agencies, including customs. 2. Quality of trade and transport related infrastructure (e.g. ports, railroads, roads, information technology). 3. Ease of arranging competitively priced shipments. 4. Competence and quality of logistics services (e.g. transport operators, customs brokers). 5. Ability to track and trace consignments. 6. Timeliness of shipments in reaching destination within the scheduled or expected delivery time. Charts below show Iran s 2018 LPI score compared with the Middle East & North Africa region and a peer country, Turkey. Iran s LPI is close to the average score in the region, but well behind Turkey s. Logistic Performance Index : Iran vs. Turkey Turkey Iran Logistic Performance Index : Iran vs. Middle East & North Africa Region Iran Region: Middle East & North Africa Source: World Bank, Iran Investment Monthly

10 Sector Insight Top TSE Sector Market Capitalization (%) - September % Metal Ores Mining 3% Motor Vehicles And Auto Parts 16% Basic Metals 6% Monetary Intermediation 25% 16% 10% 9% 6% 6% 5% 3% 20% 25% Chemicals 10% Refined Petroleum 6% Diversified Industrials 5% Telecommunications 20% Other TSE & Transportation Sector Transportation & Storage TSE Overall Index Normalised in US$ Source: TSE Calculated based on unofficial IRR per US$ exchange rates from April Iran Investment Monthly

11 Company Overview Company Overview I.R Iran shipping Lines Activity : Transportation & Storage Price 52wk range (Cents) Ticker Industry Market 3, KSHJ1 Transportation & Storage TSE Date: 31 Sep Sep 2018 Unofficial US$-IRR 1 172,000 Source: Tehran Stock Exchange, 1 This exchange rate has been used in this table to convert figures from IRR to US$. It should be noted that this exchange rate is subject to fluctuation Performance TSE Overall Index & I.R Iran shipping Lines Normalised Index in US$ Highlights I.R Iran shipping Lines Overall Index Normalised Index, adjusted for dividends and share capital increases Sep-18 Stock Data ( as of 31 September 18) Market cap billion US$ 0.34 Shares outstanding million 16,393 Free float 7% Financial year end 21-Jun Ave daily value traded ($) 95,930 Ave daily volume traded million shares P/E Key Data (Million US$) June 2018 June x June 2010 Revenue Net Profit EPS (Cents) Dividend 2% 2% 0% Official national shipping company of Iran Highly affected by sanctions and potentially one of the companies to benefit the most from sanctions removal Exchange Rate June 2018 June 2017 June 2016 IRR 75,500 37, Key Ratios 2018 A 2017 A 2016 A P/B P/Sales ROA Company Information Islamic Republic of Iran Shipping Lines was established in 1967, under the name of Iranian National Shipping Company and is active in the transportation of various cargo types. Address: No 37, Aseman Bldg, Pasdaran St., Tehran, Iran Telephone: +98 (21) Telephone: +98 (21) Website: ROE 7% 9% 14% Source of data: Company Financial Reports Major Shareholders Social Securities Inv. Co. Provincial Inv. Companies (Justice Shares) Gov. Trading Corp. of Iran 22% 14% 5.8% Source: Firouzeh Asia Brokerage, Turquoise Partners 11 Iran Investment Monthly

12 Market Snapshot Normalised in US$ (%) Market Snapshot - September 2018 Iran: A 20 Year Snapshot, Asset Class Returns in US$ Stock Housing Market Gold TEDPIX Tehran Exchange Dividend Price Index Note: Calculated by the unofficial exchange rate Iran & Regional Markets P/E Multiple Comparison MSCI Morocco 18.3 Kuwait 15.4 Qatar 13.8 MSCI Arabian Markets 13.8 MSCI GCC Countries 13.8 MSCI Egypt 10.6 Saudi Arabia 15.4 UAE 10.0 Iran 11.0 Turquoise Iran Fund 10.8 Sub Fund B/C, as of ending September 2018 Iran & International Markets Tehran Stock Exchange MSCI Emerging Markets 3 4 MSCI Frontier Markets Average P/E 11.0 x 1-Year Performance in $ -48.4% Annualized 10 Year in $ 3.0% 2 1 Average P/E 13.3 x 1-Year Performance in $ -0.8% Annualized 10 Year in $ 5.4% Average P/E 14.0 x 1-Year Performance in $ -7.5% Annualized 10 Year in $ 0.2% Sector Breakdown (%) Chemicals Basic Metals Refined Petroleum Metal Ores Mining Diversified Industrials (Holdings) Others Sector Breakdown (%) Information Technology Financials Consumer Discretionary Energy Materials Others Sector Breakdown (%) Financials Telecommunication Consumer Staples Real Estate Energy Others 1.TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index) performance calculated in US$ for the Period of September 2017 to September TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index)10 year annualized performance calculated in US$ 3.MSCI Emerging Markets Index (US$) - September MSCI Frontier Markets Index (US$) - September 2018 Source: Tehran Stock Exchange - Central Bank of Iran - MSCI Inc., Kamcoonline. All figures in US$ are converted from IRR at unofficial rate, unless otherwise indicated. 12 Iran Investment Monthly

13 TSE & Junior Market Performance TSE & Junior Market Performance Tehran Stock Exchange: TEDPIX*, September 2018 Normalised in US$ Normalised in US$ Volume million shares Normalised in US$ 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 unofficial rate, unless otherwise indicated. Normalised in US$ Iran Farabourse (Junior Market): IFX*, September 2018 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 unofficial rate, unless otherwise indicated. 13 Iran Investment Monthly

14 Top Ranked Companies Top Ranked Companies - September 2018 In 1972, Sarcheshmeh Copper Mines Joint Stock Co of Kerman was established and, later, in 1976, it was renamed to National Iranian Copper Industries Co. to cover all copper mines operations throughout the country. This company is active in the extraction & utilization of copper mines, production of copper concentrates & manufacturing copper products. National Iranian Copper Ind. Co. Turnover Value* (million US$) 10.1 % Total Turnover 0.0% Top 5 Traded by Value Bandar Abbas Oil Refining Company is one of Iran s nine petroleum refining companies, located in the northern coastline of the Persian Gulf near Bandar Abbas port. Its major products are Liquefied Petroleum Gas (LPG), gasoline, heavy naphta, aviation jet fuel, kerosene, gas oil, fuel oil, and Sulfur. Mobarakeh Steel Company, one of the largest industrial complexes in the country, started its operations in 1991 with a nominal capacity of 2.4 million tons per annum. Mobarakeh Steel is the largest steel producer in the Middle East and North Africa region. Parsian Oil & Gas Development Group was founded in 2007 and is active in refinery and petrochemical production. Bandar Abbas Oil Refining co Mobarakeh Steel Manufacturing Parsian Oil and Gas Development Group % 0.0% 0.0% Established in 1968, MSA Co. is a leading manufacturing, general contracting and EPC contracting company in Iran specialized in design, fabrication, installation and servicing a wide range of equipment utilized in oil, gas, petrochemical, power plant, mines and cement industries. Tejarat Bank % Market Cap (million US$) % Total Market Cap. PGPIC was established in the first phase of the privatization of Iran s petrochemical sector when the National Petrochemical Company (NPC) transferred its shares in a number of petrochemical companies to PGPIC, paving the way for the formation of Iran s first private petrochemical holding company. NPC has continued in its role as a policy making body. Persian Gulf Petrochemical Industry 3, % Top 5 by Market Capitalization Mobarakeh Steel Company, one of the largest industrial complexes in the country, started its operations in 1991 with a nominal capacity of 2.4 million tons per annum. Mobarakeh Steel is the largest steel producer in the Middle East and North Africa region. 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 plants among six iron mine zones about 55 km southwest of Sirjan city near Kerman province. In 1972, Sarcheshmeh Copper Mines Joint Stock Co of Kerman was established and, later, in 1976, it was renamed to National Iranian Copper Industries Co. to cover all copper mines operations throughout the country. This company is active in the extraction & utilization of copper mines, production of copper concentrates & manufacturing copper products. Pars Petrochemical Co. manufactures and markets petroleum and petrochemical products. The company offers ethane, propane, butane, ethyl benzene, and ethylene. The company was founded in 1998 and is based in Asaluyeh, Iran and was listed in Pars Petrochemical Co. Operates as a subsidiary of Persian Gulf Petrochemical Industry Co. Pars Petrochemical Company Mobarakeh Steel Manufacturing Golgohar Mining & Industrial Company National Iranian Copper Ind. Co. 2,754 1,757 1,653 1, % 1.0% 0.9% 0.9% Source: Tehran Stock Exchange, Firouzeh Asia Brokerage. All figures in US$ are converted from IRR at the unofficial rate. * Weekly data as of trading week ending 30 September Iran Investment Monthly

15 TSE Statistics TSE Statistics - Day Ending 30 September 2018 Highest Daily Traded Company Volume (m Shares) 30-Sep-18 Value (m$) National Iranian Copper Ind. Co Bandar Abbas Oil Refining Co Esfahan Mobarakeh Steel Co Parsian Oil & Gas Dev. Group Co Sectors with Highest Daily Change Company Index Value 30-Sep-18 % Change 29-Sep-18 Metallic Ores 59, Construction 1, Metallic Products 39, Ceramics & Tiles 4, Index Information Index Info Value 30-Sep-18 %Change from 29-Sep-18 TSE All-Share Index 195, TSE30 Index 9, Traded Value (US$ million) Volume (million shares) 4, Top Influencers Average Daily Trade Volume Close ($Cents) 30-Sep-18 %Change from 29-Sep-18 Golgohar Mining & Industries Co Persian Gulf Petrochemical Ind. Co Esfahan Mobarakeh Steel Co Chadormalu Mining & Ind. Co FX Movements - September 2018 Unofficial Rate IRR per US$ 54%* Source: Firouzeh Asia Brokerage, Bonbast All figures in US$ are converted from IRR at unofficial rate, unless otherwise indicated. * 1 September 2018 Vs. 30 September Iran Investment Monthly

16 Iran s Fixed Income Market Iran s Fixed Income Market Iran s Fixed Income Market From the start of the Iranian calendar year (March 2018) to end-september, total issuance on the fixed income market reached 1.4 billion US$ based on the unofficial exchange rate. Yield to maturity (YTM) remained stable at 28.5% at the end of September. Iran s Debt Securities Market - September Tehran Stock Exchange Iran Farabourse (Junior Market) Market Value (billion US$)* Tehran Stock Exchange Iran Farabourse (Junior Market) Average Daily Trading Value (million US$) 414,781 3,305,988 Tehran Stock Exchange Iran Farabourse (Junior Market) Average Daily Trading Volume (bonds) * As of 30 September 2018 Value & Breakdown of Sukuk Issuance in Iran s Capital Markets, 2018* (billion US$) Billion US$ Source: Iran Farabourse *Calculated by the unofficial exchange rate in the period of issuance. Iranian calendar year Iran Investment Monthly

17 Iran s Fixed Income Market Snapshot of the Highest Yielding Debt Securtites 1 - September 2018 Issuer Type YTM (p.a.) Maturity SOV.MRB2-LTS Murabaha Feb-21 SOV.Mosh2SPL Musharekat Mar-22 SOV.Mush9SPL Musharekat Nov-20 SOV.Mush3SPL Musharekat Oct-19 SOV.Mush5SPL Musharekat Dec-19 SOV.Mush6SPL Musharekat Feb-20 TreasuryBill Musharekat Jan-20 TreasuryBill Musharekat Aug-20 TreasuryBill Musharekat Nov-19 TreasuryBill Musharekat Dec-19 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 28.5% Source: Tehran Stock Exchange, Iran Farabourse, Central Bank of Iran 17 Iran Investment Monthly

18 Economic Review Latest Updates Latest Updates from World Bank Background The World Bank updated Iran s macroeconomic data and forecasts in October The recent depreciation of the rial and forthcoming sanctions are expected to have a negative impact on real GDP which is forecast to contract annually by 1.4% from 2018/19 to 2020/21 on average. The World Bank noted that economic growth in 2017/18 of 3.8% was largely due to the performance of non-oil sectors. Services, with a 50% share of GDP, expanded by 4.4% over the period. The labor force participation rate reached its highest level in 10 years at 41.1% in the second quarter of The female labor force participation rate continued to progress, reaching 19.8% and putting Iran among the top countries to improve participation of women in the labor force. Inflation is projected to increase to 23.8% in 2018 and 31% in 2019, largely due to higher costs of imports. Five month non-oil trade has positive balance -9.6% Import Growth (March 2018 August 2018) vs. (March 2017-August 2017) +13.7% Export Growth (March 2018 August 2018) vs. (March 2017-August 2017) 18.8 b$ Imports (March 2018 August 2018) 19.3 b$ Exports (March 2018 August 2018) Iran s non-oil trade resulted in a surplus of 425 million US$ in the period March to August 2018, according to official customs statistics. Petrochemical and condensates contributed to 30% of non-oil exports over the period. Top Import Destinations Percentage Share in terms of Import Value Top Non-oil Export Destinations Percentage Share in terms of Export Value China UAE South Korea India Germany Other China UAE Iraq Afghanistan India Other Source: Tehran Chamber of Commerce 18 Iran Investment Monthly

19 Economic Review Latest Updates Inflation at 13.5% year-on-year The Consumer Price Index rose 6% (m/m) to in September, giving a year-on-year urban inflation rate of 13.5%. Tobacco and Entertainment increased the most, rising 34% and 23% over 12 months respectively. Food and Beverages, with a 25.5% weighting in the CPI basket, rose 17.5% in September compared to a year earlier. 19 Iran Investment Monthly

20 Economic Review Macroeconomic Data Macroeconomic Data Iran Economic & Market Data Calendar CBI: Economic Trends No. 92, First Quarter 1397 (2018/19) Released: 14 October 2018 CBI: Selected Economic Indicators for August 2018 Released Released: 11 October 2018 SEO: Iran Capital Market Insight (September 2018) Released: September 2018 Iran Macroeconomic Forecast Gross Domestic Product Unit 2017/ / / 20 Nominal GDP (Billion US$) Real GDP Growth (%) Inflation (%) Export (Billion US$) Import (Billion US$) Non Oil Export (Billion US$) Private Consumption (at constant market prices) (%) Gross Public Debt (% of GDP) 37% 42% 44% Source: International Monetary Fund - Iran Country Report, March IMF Staff Visit Article IV Mission to Islamic Republic of Iran in January Central Bank of Iran Security Exchange Organization - Statistical Centre of Iran - World Bank October Iran Investment Monthly

21 Turquoise Partners About Turquoise Partners About Turquoise Partners Since 2005 Turquoise is a leading investment group based in Iran that offers a full range of financial services to select investors looking at the Iranian market. The group operates across four core areas: investment management, brokerage, corporate advisory and private equity/venture capital. Turquoise also manages more than 75 per cent of all existing foreign portfolio investments on the Tehran Stock Exchange. Its asset management division offers an EU-regulated equity fund tailored specifically to foreign investors and invests exclusively in the Iranian securities markets. The fund is jointly advised by Turquoise Partners and emerging market specialist Charlemagne Capital. Firouzeh Asia, the group s brokerage division, is the market leader in foreign investment and execution, and publishes English language market research, news and analysis. In addition, Turquoise is the only Iranian financial services group to have a significant track record in private equity investing and currently manages two listed private equity investment vehicles. Turquoise s corporate finance team offers a full suite of advisory services including mergers and acquisitions, restructuring, market entry and capital raising, for international clients seeking to enter the Iranian market as well as leading Iranian companies. 21 Iran Investment Monthly

22 Turquoise Partners About Turquoise Partners Asset Management Turquoise Asset Management has established an outstanding reputation and robust performance track record in the Iranian equities market. The group is known as a leading investment firm with a strategy of value investing and long term capital growth; it specializes in attracting foreign investors to invest in one of the most undervalued financial markets in the world. Our investment team is comprised of experienced professionals with more than 20 years experience across international and domestic financial markets. Our investment decisions are guided and supported by our investment and advisory committees, access to detailed market information, and our on-the-ground presence in Iranian financial markets over the last 10 years. Our commitment to maintaining the highest standards, along with our long term growth strategy has allowed us to gain an unparalleled reputation as the leading asset management firm inside Iran. Asset Management Division: Products & Services Turquoise Partners launched Iran s first equity fund in May 2006, tailored for foreign investors. With over 10 years of track record, the fund has grown to be the largest foreign investor on the Iranian capital markets. The investor base of this fund is almost all European with a mix of institutional, family offices, high net worth individuals and private professional investors. In early 2017, Turquoise Partners launched the 1 st Sovereign Bond Fund with a target return of 15-20% in local currency terms. The Turquoise Partners Sovereign Bond Fund is an actively managed strategy with low volatility that invests in a range of Iran s sovereign-backed fixed income assets with the objective of delivering high stable and absolute returns over time. The fund adopts a concentrated approach, utilizing a core portfolio of Iranian Government bonds backed by the Central Bank of Iran as the ultimate guarantor. Sovereign Fixed Income securities include; Islamic Treasury Bills, Ijarah Sukuk, Musharakah Sukuk & Murabaha Sukuks. Having operated in the Iranian market for over a decade, Turquoise has accumulated a first rate database of market data and information. The firm s electronic newsletter, Iran Investment Monthly, has been consistently published for over 12 years and has a wide readership of over 6,000 investors and Iran enthusiasts. This newsletter and other regular research products of the firm, are the only free source of English language research on the Iranian economy and capital markets. In 2015, Turquoise Partners and Charlemagne Capital launched the first EU regulated alternative investment fund for Iran. This fund is now operational and is open to global investors aiming to get exposure to the Iranian market. For more information about products and services offered by Turquoise Partners please contact: info@turquoisepartners.com 22 Iran Investment Monthly

23 Turquoise Partners About Turquoise Partners Corporate Advisory Our corporate finance team is comprised of senior Iranian and international bankers based locally and in London. We deliver mergers and acquisition advisory, restructuring, market entry and capital raising services to international clients seeking to enter the Iranian market. We also assist Iranian domestic corporates to access global markets through strategic partnerships. We seek to combine in-depth local knowledge and access with international investment banking best practices. In cooperation with Turquoise s market leading equity brokerage, we deliver capital markets services, including public markets capital raising and structured products, to Iranian corporate clients and foreign and domestic institutional investors. Corporate Advisory Division: Products & Services Advisory Reports: in-depth research reports tailored to the corporate advisory division s policies, providing due diligence research on specific listed or non-listed companies and their sectors outlooks, in English. Brokerage Firouzeh Asia, the brokerage arm of Turquoise Partners, is the leading broker offering access to Iranian securities markets for international investors. Over the years, Firouzeh Asia, as a fully licensed brokerage company under the Securities and Exchange Organization of Iran, has been a pioneer in servicing international investors as well as offering professional services to its domestic clients. Firouzeh Asia has a presence in four major Iranian cities: Tehran, Isfahan, Rasht and Yazd. Brokerage Division: Products & Services Securities Dealing Online trading platform with live market data for all customers Telephone orders Block trades Dedicated trading station for large customers Managed Accounts Investment advice (institutional clients only) Capital Market Advisory Listing and IPO advisory Fixed income securities issuance and placement Index ETF Launch of Iran s first index-linked ETF (TSE- 30 ILETF) in January 2015 Client portfolio management Index ETF Fixed Income (Firouza ETF) Equity Research Report: an in-depth research report tailored to the Turquoise Investment Strategy which provides the latest developments in a selected number of listed companies (including their sectors), in English. For more information about products and services offered by Turquoise Partners please contact: info@turquoisepartners.com 23 Iran Investment Monthly

24 Turquoise Partners About Turquoise Partners Private Equity/Venture Capital Turquoise is one of the only Iranian financial firms with a significant track record in private equity investing. Our investment team has been operating on the ground since 2005 and has invested on its own behalf, with co-investment partners, and as a manager in the most attractive growth sectors of the Iranian economy. Transactions have included private investments in FMCG, financial services, real estate and technology-based venture capital. Our private equity capabilities include experience in all phases of the investment process including market analysis, due diligence for investors in the Iranian environment, interface with regulators and other governmental authorities, investment restructuring, exit management and undertaking all the reporting and investment monitoring expected of a private equity fiduciary. Private Equity Division: Products & Services The Turquoise Group has made private equity investments both on its own and with partners in a variety of sectors including consumer, financials, technology and real estate amongst others. Advisory Reports: in-depth research reports tailored to the corporate advisory division s policies, providing due diligence research on specific listed or non-listed companies and their sectors outlooks, in English. For more information about products and services offered by Turquoise Partners please contact: info@turquoisepartners.com 24 Iran Investment Monthly

25 Turquoise Partners About Turquoise Partners Ctrl+Tech In early 2017, and in line with Turquoise s history of identifying and acting upon new opportunities, we launched a tech incubator in North Sohrevardi, Tehran, by the name of Ctrl+Tech. Ctrl+Tech aims to build and develop exciting tech start-up ideas in Iran, with a mandate to not only focus on launching proven-concept business models that exist and have demonstrated success elsewhere in the world, but also on innovative new ideas that should resonate well in Iran s burgeoning start-up environment. Ctrl+Tech currently consists of a carefully assembled team of 16 individuals all of whom are passionate about building new apps for the domestic market. Our team of talented founders, developers, designers, and tech gurus are backed and supported by senior mentors and members of Turquoise Partners, allowing Ctrl+Tech to leverage off Turquoise s wealth of expertise and experience in Iran s digital landscape. Turquoise created Ctrl+Tech in order to build a platform that will grow strongly in Iran s flourishing technology market. A market which boasts: A young and tech-savvy demographic where almost two-thirds of Iran s 80 million population is under the age of 35 The highest internet usage in the Middle East where Iran is responsible for almost 40% of the entire region s usage A rapidly growing smart-phone penetration rate, estimated at 48 million users - up 2,300% in the past 3 years After 5 months of full operation, Ctrl+Tech successfully launched it s first project in early October an exciting job-search platform: 3sootjobs. 3sootjobs is revolutionizing Iran s job-search market by creating and introducing a smart, fast and easy-to-use platform (app and website) that will allow job seekers and employers to instantly search, and connect, using an algorithm-led software. Since launch, 3sootjobs has shown impressive growth and success, where it has attracted thousands of users in the first week, scored 96% 5* ratings on Cafe Bazaar, and successfully closed a seed funding round. For more information about products and services offered by Turquoise Partners please contact: info@turquoisepartners.com 25 Iran Investment Monthly

26 Turquoise Partners News & Views News & Views Recent Research Iran Daily Market Update October 2018 October 24, 2018 October 23, 2018 October 22, 2018 October 21, 2018 October 20, Iran Investment Monthly

27 Turquoise Partners No th St. Khaled Eslamboli (Vozara) Ave. Tehran, Iran Tel: Fax: info@turquoisepartners.com Firouzeh Asia Brokerage 5th Floor No. 11, Mirza Hassani St. Ghaem Magham Farahani Ave. Tehran, Iran Tel: Fax: 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 any errors, inaccuracy, delay or updating of the published content of the provided document. Turquoise Partners expressly disclaims all warranties as to the accuracy of the content provided, or as to the use of the information for any purpose, as far as legally possible. This material is for the use of intended recipients only and neither the whole nor any part of this material may be duplicated in any form or by any means. Neither should any of this material be redistributed or disclosed to anyone without the prior consent of Turquoise Partners. PERSONS DOMICILED, RESIDENT OR BASED IN THE UNITED STATES OF AMERICA ITS TERRITORIES OR POSSESSIONS OR WHO MAY OTHERWISE BE CONSIDERED AS UNITED STATES PERSONS, INCLUDING REPRESENTATIVES OF UNITED STATES COMPANIES OR NON-UNITED STATES SUBSIDIARIES OF UNITED STATES COMPANIES SHOULD NOT CARRY OUT ANY ACTION IN BREACH OF U.S. SANCTIONS LAWS. 27 Iran Investment Monthly