January Volume 13, No 145. January 2019: Tochal Mountain, Tehran. Photo by: Kourosh Odouli. Summary

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1 January Volume 13, No 145 January 2019: Tochal Mountain, Tehran. Photo by: Kourosh Odouli Summary Equity Markets The TEDPIX index remained flat and junior Farabourse (IFB) market increased by 5% in IRR terms over the past month. Based on the unofficial exchange rate, the month-on-month gains in dollar terms was 7% in Farabourse market. This was mainly due to 2% appreciation of IRR exchange rate over the month. Debt Markets From the start of the Iranian calendar year (March 2018) to end-december, total issuance on the fixed income market reached 3.5 billion US$ based on the unofficial exchange rate. Yield to maturity (YTM) remained stable at 21.3% at the end of December. Economic Review This issue reviews the latest updates from Ministry of Mine and Industry on the industrial production, exports and non-oil trade balance and Tehran Chamber report on the PPI. 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. 1 Iran Investment Monthly

2 Table of Contents 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 Tehran Stock Exchange recorded a negative performance of 1.5% in Euro Terms in December to end the year at -12 % in Euro Terms, the first annual loss in two years. The primary driver for this negative performance in Euro Terms, was a result of the Iranian Rial losing 47% of its value against the Euro Currency based on the CBI Daily market Rate. The below chart illustrates the 5-year performance of the Rial against the Iranian equity market performance and the European currency. With the CBI market Daily Market rate having only been introduced in 2018, we have illustrated the performance below for this past year. TSE Overall Index (EUR) & IRR/EUR (Annual Percentage Change) Shervin Shahriari Chief Investment Officer Equity Market in EUR (%) IRR/EUR Source: TSE 2018 proved to be a challenging year for investors in Iranian equities in Euro terms as both the political uncertainty and severe devaluation weighed on performance. The first half of 2018 was dominated by continued interference and policy changes made by government to stabilize the continued drop in the Iranian currency. To recap, the Central Bank of Iran, in April, announced the unification of the dual currency system. This decision was the government s attempt to control currency fluctuations; however, it actually made the situation worse, as exporters were not feeding the free market anymore. This resulted in creation of a much more volatile and illegal black market for the hard currencies. Following much confusion and discontent that was created by this decision, which made both import and exports of goods very difficult, the Central Bank of Iran introduced a new secondary exchange where exporters and importers can trade their hard currency under the supervision of the CBI. 3 Iran Investment Monthly

4 Market Insight During the third quarter of 2018, the currency slide did slow, and the stock market began to rally, to partially compensate for this severe decline of the Iranian Rial. In the bond market, after a sharp decline in yields of listed T-Bills in recent months, there have been signs of stability in interest rates in December. We believe that 20 to 21% would be the resistance level for interest rates given that the CBI has fixed the cap for annual deposit rates at 20%, which is widely offered by Iranian commercial banks to depositors across the country. YTM 21.3% Source: TSE Looking ahead in to 2019, according to historical evidence and back tested data, we believe there will be a potential for the Iranian equity market to re-adjust resulting in a significant boom in share prices, as we experienced during the last bout of a severe devaluation in By simulating the current stock market reaction to the currency devaluation, we anticipate that the rerating process of the equity market is still ahead of us: 4 Iran Investment Monthly

5 Market Insight Overall Index in IRR Vs. IRR Exchange Rate. USD/IRR Free Market Rate Overall Index in IRR 266 The gap is expected to be filled Normalised Index 64 Source: TSE Our view remains that the prices of the listed assets will adjust to reflect the fall in currency value. The Equity Market has hit all-time highs in local currency terms as well as achieving record trading volumes during the fourth quarter of 2018; therefore, we feel as though this re-rating and adjustment has indeed just kicked off. 5 Iran Investment Monthly

6 Performance & Update Performance & Updates Summary - December 2018 Market Capitalization (billion US$) 73 TSE & Farabourse Junior Market Free Float 22% TSE & Farabourse Junior Market Number of Listed Companies TSE & Farabourse Junior Market TSE Index Performance (US$) 0.4% (MTD) -36.8% (YTD) TSE Total Turnover (million US$) 2 1,811 m$ TSE & Farabourse Junior Market Dividend Yield (%) 9.8% TSE P/E (ttm) 7.8 x 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 ending 1396 Iranian calendar year. 4 TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index) The TEDPIX index remained flat and junior Farabourse (IFB) market increased by 5% in IRR terms over the past month. Based on the unofficial exchange rate, the month-on-month gains in dollar terms was 7% in Farabourse market. This was mainly due to 2% appreciation of IRR exchange rate over the month. The TSE s total trading volume inched up by 8% reaching 934 million US$ in December based on the unofficial exchange rate. Trading on the IFB soared by 51% on a monthly basis at 877 million US$, based on the unofficial rate. The total number of shares traded on the TSE inclined by 4% reaching 39 billion shares, and on the Farabourse market increased by 36% to 19 billion shares. Tehran Stock Exchange & Junior Market Trade by Value 1 - December 2018 Iran Farabourse (Junior Market) Trade Volume (million US$) 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. 6 Iran Investment Monthly

7 Performance & Update Tehran Stock Exchange Trade by Value Monthly Change Total: 8% Average: -14% December Total: 934 million US$ Average: 41 million US$ No. Trading Day: 23 November Total: 826 million US$ Average: 48 million US$ No. Trading Day: 18 Million US$ Tehran Stock Exchange Trade by Volume Monthly Change Total: 4% Average: 18% December Total: 39,809 million shares Average: 1,731 million shares No. Trading Day: 23 November Total: 38,275 million shares Average: 2,126 million shares No. Trading Day: 18 Million Shares Source: Tehran Stock Exchange All figures in US$ are converted from IRR at the unofficial rate 7 Iran Investment Monthly

8 Performance & Update Junior Market Trade by Value Monthly Change Total: 51% Average: 19% December Total: 877 million US$ Average: 38 million US$ No. Trading Day: 23 November Total: 580 million US$ Average: 32 million US$ No. Trading Day: 18 Million US$ Junior Market Trade by Volume Monthly Change Total: 36% Average: 8% December Total: 19 billion shares Average: 840 million shares No. Trading Day: 23 November Total: 14 billion shares Average: 781 million shares No. Trading Day: 18 Million Shares Source: Iran Farabourse Company All figures in US$ are converted from IRR at the unofficial rate 8 Iran Investment Monthly

9 Sector Insight Sector Insight - December Agriculture Coal & Lignite Mining Wood & By-products Metal Ores Mining Oil & Gas Extraction Transportation & Storage Insurance & Pension funding Except Compulsory Social Security Financial leasing Financial Intermediates Post & Telecommunication % Sector Performance x 14.0 x 14.0 x 12.0 x 11.0 x Fabricated Metal Products Food Products and Beverages Rubber & Plastic Products Electric Machinery & Apparatus Monetary Intermediation - Banks 7.0 x 6.0 x 6.0 x 6.0 x 5.0 x Insurance & Pension Chemical & By Products Diversified Industrial (Holdings) Financial Leasing Basic Metals P/E 161% 59% 47% 44% 3% Financial Intermediates Sugar and By-products Machinery & Equipment Food Products and Beverages Motor Vehicles and Auto Pars -52% -53% -53% -56% -65% Refined Petroleum Products Transportation & Storage Chemical & By Products Monetary Intermediation - Banks Metal Ores Mining %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. 9 Iran Investment Monthly

10 Sector Insight Sector Insight: Chemical The chemical sector is one of the most prominent sectors on the Tehran Stock Exchange. The sector includes petrochemicals, detergents, industrial salt and chlorine manufacturers. As explained in detail in our previous issues (December 2016 and January 2017 editions), petrochemical companies are able to increase the value of their sales in US$ terms during Rial depreciation while their operating expenses increase in Rial terms. The solid resilience of petrochemical companies to the IRR exchange rate fluctuation was tested in 2011 when the TSE witnessed a positive impact on the profitability prospects of listed exporting companies from that period up until The Efficient Frontier statistical model using the 5 year daily data of TSE sectors, confirms that the chemical sector is resilient against devaluation and sanctions and we continue to keep a close eye on chemical companies which account for a large share of the TSE (24% of total market cap). Chemical Industry Breakdown (in terms of Market Cap) Petrochemical Other Detergent Salt Other Chemical Products 85% 5% 3% 2% 5% Chemical Sector Market Cap: 13 B$ (24% of total) Share of Total Market Cap: 24% Chemical Sector P/E: 6 Number of Companies: 25 Dividend Payout Ratio (Sector): 74% 10 Iran Investment Monthly

11 Sector Insight Top TSE Sector Market Capitalization (%) - December % Refined Petroleum 3% Computer & Related Activities 15% Basic Metals 6% Diversified Industrials 24% 15% 10% 9% 7% 6% 5% 3% 20% 24% Chemicals 10% Metal Ores Mining 7% Monetary Intermediation 5% Telecommunications 20% Other TSE & Chemical Chemical TSE Overall Index Normalised in US$ Source: TSE Calculated based on unofficial IRR per US$ exchange rates from April Iran Investment Monthly

12 Company Overview Company Overview Iran Mineral Salts. Co Activity : Chemical & By Products Price (Cents) 52wk range (Cents) Ticker Industry Market AMLH1 Chemical & By Products TSE Date: 31 Dec Dec 2018 Unofficial US$-IRR 1 114,000 Source: Tehran Stock Exchange, 1 This exchange rate has been used in this table to convert figures from IRR to US$. It should be noted that this exchange rate is subject to fluctuation Performance TSE Overall Index & Iran Mineral Salts. Co Iran Mineral Salts. Co Overall Index Stock Data ( as of 31 December 18) Market cap billion US$ 0.04 Shares outstanding billion 210 Free float 20% Financial year end 20-Mar Ave daily value traded ($) 31,228 Ave daily volume traded million shares 167,152 P/E 10.2 x Normalised Index in US$ Normalised Index, adjusted for dividends and share capital increases Highlights Iran Mineral Salts was founded in 1984 Listed on the Tehran Stock Exchange in 1996 The largest listed producer of Sodium Sulfate in the country Sodium Sulfate is used in a variety of locally manufactured products, including washing consumables and detergents Profitability increased during last bout of devaluation Costs are in local currency terms with potential revenue growth of 131% to match global pricing. No government intervention in pricing policy Company Information Founded in 1984, Iran Mineral Salts Company is one of the largest listed producers of Sodium Sulfate in the country. Address: No. 29, Street 64, Jamal al-din al-abadi Street, Tehran, Iran. Telephone: +98 (21) Website: Key Data (Million US$) March 2018 March 2017 March 2016 Revenue Net Profit EPS (Cents) Exchange Rate March 2018 March 2017 March 2016 IRR 47,730 37, Key Ratios March 2018 March 2017 March 2016 P/B P/Sales ROA ROE 67% 60% 61% Source of data: Company Financial Reports Major Shareholders Tamin Sadr Investment 76% Iran China Clay 3% Source: Firouzeh Asia Brokerage, Turquoise Partners 12 Iran Investment Monthly

13 Market Snapshot Normalised in US$ (%) Market Snapshot - December 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 18.8 Kuwait 14.6 Qatar 14.6 MSCI Arabian Markets 13.5 MSCI GCC Countries 13.6 MSCI Egypt 9.2 Saudi Arabia 14.8 UAE 9.7 Iran 7.8 Turquoise Iran Fund 7.4 Sub Fund B/C, as of ending December 2018 Iran & International Markets Tehran Stock Exchange MSCI Emerging Markets 3 4 MSCI Frontier Markets Average P/E 7.8 x 1-Year Performance in $ -36.8% Annualized 10 Year in $ 2.9% 2 1 Average P/E 12.0 x 1-Year Performance in $ -14.6% Annualized 10 Year in $ 8.0% Average P/E 12.5 x 1-Year Performance in $ -16.2% Annualized 10 Year in $ 5.1% Sector Breakdown (%) Chemicals Basic Metals Metal Ores Mining Refined Petroleum Monetary intermediation Others Sector Breakdown (%) Financials Information Technology Communication Services Consumer Discretionary Energy Others Sector Breakdown (%) Financials Telecommunication Consumer Staples Real Estate Materials Others 1.TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index) performance calculated in US$ for the Period of December 2017 to December TEDPIX Tehran Exchange Dividend Price Index (Dividend & Price Index)10 year annualized performance calculated in US$ 3.MSCI Emerging Markets Index (US$) - December MSCI Frontier Markets Index (US$) - December 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. 13 Iran Investment Monthly

14 TSE & Junior Market Performance TSE & Junior Market Performance Tehran Stock Exchange: TEDPIX*, December 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*, December 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. 14 Iran Investment Monthly

15 Top Ranked Companies Top Ranked Companies - December 2018 Khuzestan Steel Company is one of the major crude iron producers in Iran with capacity of 3.2 million tons per year. Khuzestan Steel Co. is established in 1973 as the first producer of iron and steel in the country, based on Direct Reduction and Electric Arc Furnaces Technology (EAF) methods. Khouzestan Steel Turnover Value* (million US$) 9.2 % Total Turnover 1.0% Top 5 Traded by Value SAIPA is the second largest Iranian vehicle manufacturer. The company was established in 1966, with 75% Iranian ownership, to assemble Citroëns under license for the Iranian market. Currently, it builds mainly Korean cars, but also has developed its own engine and range of cars. Tejarat Bank was founded in 1979 after the implementation of the Banks Nationalization Act and the subsequent integration of five domestic commercial banks and six multi-national banks. In 2009, the bank was partially privatized, with the Iranian state remaining as a minority shareholder. Mellat Bank was established in 1979 with the merger of ten pre-revolution private banks in Iran. From the outset, the operations of the bank have included various commercial banking services. Mellat Bank Saipa Tejarat Bank % 0.3% 0.2% Founded in 2003 and privatized in 2009, the company is active in telecommunications and provides internet services across the country. It has a government contract to provide high speed internet services to 25,000 villages across Iran over 10 years. In 2017, HiWeb was listed on the Tehran Stock Exchange. Hi Web PGPIC was established in the first phase of the privatization of Iran s petrochemical sector when the National Petrochemical Company (NPC) transferred its shares in a number of petrochemical companies to PGPIC, paving the way for the formation of Iran s first private petrochemical holding company. NPC has continued in its role as a policy making body. Persian Gulf Petrochemical Industry 1.0 Market Cap (million US$) 3, % % Total Market Cap. 6.9% 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. National Iranian Copper Ind. Co. Pars Petrochemical Company Mobarakeh Steel Manufacturing Golgohar Mining & Industrial Company 3,216 2,118 1,984 1, % 3.9% 3.7% 3.2% 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 31 December Iran Investment Monthly

16 TSE Statistics TSE Statistics - Day Ending 31 December 2018 Highest Daily Traded Company Volume (m Shares) 31-Dec-18 Value (m$) SAIPA Group Tejarat Bank Mellat Bank Hi Web Co Sectors with Highest Daily Change Company Index Value 31-Dec-18 % Change 30-Dec-18 Paper Products Sugar 15,656 3 Automotive 21,158 3 Rubber & Plastics 28,232 2 Index Information Index Info Value 31-Dec-18 %Change from 30-Dec-18 TSE All-Share Index 161, TSE30 Index 7,918 3 Traded Value (USD million) Volume (million shares) 1, Top Influencers Average Daily Trade Volume Close ($Cents) 31-Dec-18 %Change from 20-Nov-18 Pars Petrochemical Co Esfahan Mobarakeh Steel Co Chadormalu Mining & Ind. Co SAIPA Group FX Movements - December 2018 Unofficial Rate -0.9%* IRR per US$ Source: Firouzeh Asia Brokerage, Bonbast All figures in US$ are converted from IRR at unofficial rate, unless otherwise indicated. * 1 December 2018 Vs. 31 December Iran Investment Monthly

17 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-december, total issuance on the fixed income market reached 3.5 billion US$ based on the unofficial exchange rate. Yield to maturity (YTM) remained stable at 21.3% at the end of December. Iran s Debt Securities Market - December Tehran Stock Exchange Iran Farabourse (Junior Market) Market Value of Traded Bonds (billion US$)* Tehran Stock Exchange Iran Farabourse (Junior Market) Average Daily Trading Value (million US$) 1,360,056 2,097,883 Tehran Stock Exchange Iran Farabourse (Junior Market) Average Daily Trading Volume (bonds) * As of 31 December 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

18 Iran s Fixed Income Market Snapshot of the Highest Yielding Debt Securtites 1 - December 2018 Issuer Type YTM (p.a.) Maturity Government Ijara Feb-21 Saipa Yadak Commercial Ijara Jul-21 Saipa Group Murabeha Nov-20 Government Ijara Mar-20 Saipa Group Ijara May-21 Government Mosharekat Jan-22 Corporate Ijara Jan-20 Shargh Cement Murabeha Mar-20 Oil Industry Pension Investment Fund Ijara Jan-20 Government Ijara Nov-20 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 Source: Tehran Stock Exchange, Iran Farabourse, Central Bank of Iran, Bourseview 18 Iran Investment Monthly

19 Economic Review Latest Updates Industrial Production & Exports According to a report by the Ministry of Industry, Mine, and Trade, the total production of automobiles in the first seven months of the current Iranian year (between March 2018 October 2018) amounted to 661,524, a 20% decrease compared to the same period the previous year. Out of 40 groups of goods that are included in the report, home and bathroom appliance production has declined the most (28% on average) over the past 7 months. One possible explanation could be the fact that many factories have stopped producing more than the market demand or preferred to use their stocked goods to supply existing demand. On the other hand, metal and mineral production has been on the rise over the same period while petrochemical and cement production remained flat with a slight decline of 3% over the past seven months. During this period, the export volume of carpets, agriculture and industrial goods increased by 70%, 23% and 9% respectively (7m 1397 versus 7m 1396). In terms of value in IRR term, agriculture and industrial goods increased by 30% and 20% respectively (7m 1397 versus 7m 1396). However, the value of carpet exports declined by 12% during the same period. Export Value & Export Volume (March 2018-October 2018 vs. March 2017-October2017) Value Volume Non-Oil Trade -11.1% Import Growth (March 2017 October 2017) vs. (March 2018 October 2018) 13.2% Export Growth (March 2017 October 2017) vs. (March 2018 October 2018) 26.3 b$ Total Import (March 2017 October 2017) vs. (March 2018 October 2018) 24.0 b$ Non-oil Export* (March 2017 October 2017) vs. (March 2018 October 2018) *Including oil condensate 19 Iran Investment Monthly

20 Economic Review Latest Updates 87.7% Industry 55.1% Transportation & Strong 52.4% Agriculture & Farming PPI (November 2018 Vs. November 2017) 31.7% Hotel & Restaurant Producer Price Index (PPI) With the Rial depreciation against US$, the cost of manufacturing has been on an upward trend over the 12 months ending November The rise in PPI signals higher inflation in the consumer market. 23.6% Education 0.7% Telecommunication 17.7% Health & Social Services 20 Iran Investment Monthly

21 Economic Review Macroeconomic Data Macroeconomic Data Iran Economic & Market Data Calendar SEO: Iran Capital Market Insight (January 2019) Released: January 2019 SCI: CPI by Provinces in the Month of Azar of the Year 1397 Released: January 2019 SCI: Average Price of Selected Food Items in Urban Areas in the Month of Azar of the Year 1397 Released: January 2019 SCI: Total Country Consumer Price Index by the Expenditure Deciles: in the Month of Azar of the year 1397 Released: January 2019 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% SCI: The Economic Growth Rate for the First Half of the Year 1397 (Base Year: 1390) Released: December 2018 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

22 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. 22 Iran Investment Monthly

23 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 23 Iran Investment Monthly

24 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 24 Iran Investment Monthly

25 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 25 Iran Investment Monthly

26 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 26 Iran Investment Monthly

27 Turquoise Partners News & Views News & Views Recent Research Iran Daily Market Update December 2018 January 30, 2019 January 29, 2019 January 28, Iran Investment Monthly

28 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. 28 Iran Investment Monthly