Abstract
The purpose of this report is to review and analyze Mines and Industry sector developments in stock exchange. Based on data, industry index had a 30 percent rise in 1394 where most changes took place in the final quarter of the year and after Iran nuclear agreement. The results indicate that despite higher level of equity financing, there has been fewer financing opportunities for economic activities giving rise to a 10 percent fall in profitability of projects in Mines and Industry sector. The EPS trend for industries in stock exchange in 1393-94 reveals that the majority of industries faced a drop in their profitability. Furthermore, a major portion of profits were allocated to shareholders leading to a disengagement of financial resources in the sector. However, the stock index of some major industries such as metals, chemical products and automobile increased in the fourth quarter of 1394. The stagnation in domestic economy, falling oil and commodity prices and lifting of economic sanctions had a dominant impact on the industries. While being crippled by low sales and profitability as well as a rise  in financial costs, financial performance of the selected industrial firms shows that they are struggling to pay off short term debts and at the same time are facing low stock return and thus reduced dividends yields for shareholders.
Key words: Mines and Industry sector, Stock Exchange Market and Selected Industries

Executive summary
Many attribute the economic climate of Iran in 1394 to the developments taking place in Mines and Industry sector and its negative economic growth as declared by Iran’s Statistical Center. Given the significant role played by financial markets, this report aims to highlight some of the major developments of Mines and Industry sector in regard to stock exchange market.
Based on data, despite a 22 percent fall in 1393, industry index had a 30 percent rise in 1394 which was higher than the average rate. Most of the positive changes taken place in the final quarter of the year were attributed to lifting of sanctions and Iran nuclear agreement. Economic policies adopted by government and the Central Bank to control inflation rate and decisions concerning interest rate and bank credit as well as falling oil and commodity prices in global markets were believed to be the driving force behind the dynamics of the industry index.
The results indicate that despite a 20 percent annual surge in equity financing in 1394, there has been fewer financing opportunities for economic activities especially in Mines and Industry sector. Given the constant profit and limited risk, the rise in debt market share of total financing in stock exchange market during 1393-94 can have negative implications for industrial firms seeking to finance their businesses in stock market.
Our findings reveal that the 206 companies involved in mining industry totally made 277 billion Rials profit, a 10 percent annual decrease over the previous year. More than 85 percent of the profit in 1394 was made by chemical industry, Metals, multidisciplinary companies and oil products among which chemical industry accounted for nearly 50 percent of the profit while the others share ranged from 8 to 17.7 percent. This signifies the high level of profit concentration among just a few companies.
The EPS trend for industries in stock exchange in 1393-94 reveals that the majority of industries suffered a drop in their profitability with the figure falling from 826.77 Rials in 1393 to 516.22 Rials in 1394. Many believe the lingering stagnation to be the cause of this descending trend. Furthermore, an overview of DPS/EPS suggests that in spite of lower profitability of these companies, a major portion of profits (62 percent on average) were allocated to shareholders leading to a disengagement of financial resources in the sector. Lack of an upper limit for dividends in article 90 of trade law has given rise to a high level of dividend payout among industrial companies in bourse. In addition, P/E has risen from 7.34 in 1393 to 11.32 in 1394 due to a decline in earnings per share in Mines and Industry sector as well as a jump in share prices in the final quarter of 1394.
Furthermore, selected industries including chemical products, automobile and auto parts experienced a surge in their share price in the fourth quarter of 1394. The stagnation in housing sector, falling oil and commodity prices as well as a reduction in steel prices in domestic market and scarcity of raw materials for Aluminum production were the main driving forces behind the dynamics of metals industry index. In case of chemical products, industry index dynamics were attributed to the determination of the growing pattern of discounts for raw materials (gas and liquid feedstock) used in petrochemical plants, growing export revenues, a fall in final price and higher profitability due to the nuclear agreement, 10 to 15 percent of export growth to European markets and lower profit  margin  for  petrochemical  companies  with  gas  feedstock  while  for  the  case of
automobile industry, car producers and Competition Committee dispute over increasing car prices, resumption of Saipa’s car export to Egypt, recommencement of Benz activities in Iran and its agreement to pay 42 million Euros in compensation to Iran Khodro,  Central Bank decision to supply credit to Iran Khodro and Saipa, Iran Khodro and Peugeot company negotiations for a joint venture contract and establishment of Vanet production line in Bagdad were the major factors determining the index dynamics. While being crippled by low sales and profitability as well as a rise in financial costs, financial performance of the selected industrial firms shows that they are struggling to pay off  short term debts and at the same time are facing low stock return and thus reduced dividends yields for shareholders.