Kian launches fixed income index

  • February 5, 2018
  • News

Kian launches a new index to track the return of fixed income securities

Tehran – Kian is quoting a family of indices on a daily basis, tracking the return of fixed income securities.

The Kian Fixed Income (KFI) Index is a weighted return index of a basket of tradeable fixed income instruments comprised of three sub-indices each with their individual risk profile.

Despite the fact that over 95% of the economy is financed by banks and credit institutions, the Iranian debt market is still in development.

The administration has confirmed issuance of IRR 794 tr worth of Islamic debt instruments for the local market in the current fiscal year ending march 2018. Of this amount IRR 347 tr has been issued since the beginning of the year up to the time of writing. In line with the sixth 5-year development plan, total debt financing is targeted to reach IRR 3,000 tr by 2022.

The index has been created as a benchmark for evaluating risk adjusted return of investments in fixed income securities.

“In the past, Investors had only the overall market yield to maturity to look at as an indicator of return. KFI index provides a better view of the market by selecting a more realistic portfolio of tradeable securities that accurately represent the investable market” added Payam Afzali, managing partner and head of investment banking at Kian.

The index encompasses three sub-indices each covering a group of fixed income instrument based on the issuer, namely the government, municipalities and corporations. “There is a separate sub-index for each type of issuers. The basket of securities considered to construct the index includes securities with maturities of 1 to 3 years that pass a minimum traded volume in the previous 30 days of trading” adds Mr. Afzali.

The indices are updated daily and available on the company website and LinkedIn page.