The Will to Invest in Stocks Has Returned

On the Zagreb Stock Exchange today, most analysts expect an increase in the Crobex index and a calming of the intense passions that prevailed last week. A survey by Hina shows that the greatest interest among investors today could be in the shares of T-HT, the construction, and shipping sectors.

Of the 8 analysts from brokerage firms who participated in Hina’s survey, 5 expect an increase in the Crobex index today, while 3 expect its stagnation. Last week, due to unpredictable and rapid changes between manic and depressive phases in the market, which caused more than 40 stocks to sometimes be in positive and sometimes in negative blockades daily, the Crobex index rose by 14.59 percent to 2,531 points. The regular turnover in shares was 568.41 million kuna, almost 100 million kuna higher than in the previous week.

“I expect a positive trend in the domestic market today, along with a calming of the passions that prevailed last week. The focus will be, as in previous days, on movements in global stock markets,” says Kristina Džakula, a broker and analyst at the brokerage firm EA Sistem. She adds that there was significant liquidity in the market last week, but also excessive volatility. “Trading last week practically took place for four, not six hours, as days usually began with stock blockades, either positive or negative. There was room for all investors, both speculative and cautious; simply, the majority have regained the will to invest in stocks,” Džakula assesses.

Meanwhile, efforts by financial and monetary authorities around the world to stabilize financial markets have continued. European Central Bank President Jean-Claude Trichet promised on Sunday to do whatever it takes to restore confidence in the shaken financial markets. The German government has defined strict conditions under which it will assist banks with 500 billion euros, including strict limits on salaries, bonuses, and severance packages for top bank executives, while South Korea has promised to assist the financial system with 130 billion. The Dutch government, on the other hand, has decided to help the largest local bank ING with 10 billion euros in fresh capital.

“Banks around the world are being supported, but with certain restrictive measures, particularly highlighted by the German government. I hope that the decisions of the Croatian National Bank and other players in the financial market will help calm volatility, and that trading in stocks will proceed without drastic price jumps and drops,” Džakula assesses. She believes that from now on, positive news from companies, such as announcements of new jobs and investments, could significantly influence stock prices. Hina’s survey shows that the greatest interest among investors today could be in the shares of T-HT, the construction, and shipping sectors.

“Despite the decline in the BDI spot freight index, it should be noted that domestic shipping companies indeed have well-thought-out business plans, and their freight rates are generally not subject to fluctuations in the spot market, but are mostly fixed by contracts. Some shipowners also have large sums of money in their accounts that they keep in case of a crisis to always be able to pay for ships under construction. The business policy of our shipowners is strict, but therefore they do not succumb to the upheavals in the global credit and shipping transport market that are currently occurring,” Džakula assesses.

And after MOL’s payout to the shareholders of INA, which saw 6.2 billion kuna deposited into the accounts of funds and small investors on Friday, liquidity in the market should also be somewhat better than before. “If passions calm down, there could be somewhat less turnover this week. However, I do not expect it to decrease to the levels we recorded during the dry summer months, as part of the money from the sale of INA shares could return to the stock market, especially if the trend remains positive,” concludes Džakula for Hina’s financial service.