Document Type : Research Paper
Authors
University of Mazandaran
Abstract
Ferrous companies in Iran have export ability due to the advantage of low energy prices and because there is arbitrage in the steel market, the value of ferrous companies stock in Iran is related to the LME steel price. But the LME prices affects the value of stocks through the exchange rate in the informal market. Therefore, in research, the effect of LME prices and exchange rate should be distinguished from each other. The information used in this article includes monthly data for the 69 months to July 2021. The results indicate that for every 10% increase in the LME price of steel, the stock value of steel manufactures increases by 8/8% and the value of iron ore mining companies increases by 5/8%. Also, the increase in the exchange rate in the informal market will increase the value of the stocks of these two groups of companies by 3 and 5/7 percent, respectively. The speed of adjustment to the long-run relationship is 3 months in steel manufactures and 1 month in iron mines
Ferrous companies in Iran have export ability due to the advantage of low energy prices and because there is arbitrage in the steel market, the value of ferrous companies stock in Iran is related to the LME steel price. But the LME prices affects the value of stocks through the exchange rate in the informal market. Therefore, in research, the effect of LME prices and exchange rate should be distinguished from each other. The information used in this article includes monthly data for the 69 months to July 2021. The results indicate that for every 10% increase in the LME price of steel, the stock value of steel manufactures increases by 8/8% and the value of iron ore mining companies increases by 5/8%. Also, the increase in the exchange rate in the informal market will increase the value of the stocks of these two groups of companies by 3 and 5/7 percent, respectively. The speed of adjustment to the long-run relationship is 3 months in steel manufactures and 1 month in iron mines
Keywords
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