It is Crucial to Calm Investor Tensions

On the Zagreb Stock Exchange today, most analysts expect a continuation of the positive trend, given the good signals from global exchanges, after which a longer-term market stabilization could follow.

Of the 9 analysts from brokerage firms who participated in Hina’s survey, 7 expect an increase in Crobex today, while 2 anticipate stagnation. The Crobex index rose by 1.91 percent yesterday, reaching 2,580 points. The regular turnover in shares was slightly above 54 million kuna. "We expect a continuation of the positive trend today, given the good signals from global exchanges. The domestic capital market remains very nervous, so it is now crucial to calm investor tensions and work on increasing the sense of security through measures such as the recent establishment of an ‘intervention fund’," say Argus Securities.

They add that there is currently no noticeable return to the market of part of the money from the sale of INA shares. "If today’s trend on the stock exchange is similar to yesterday’s, a phase of market stabilization will follow, during which there will no longer be such large fluctuations in stock prices, which we witnessed last week. From next year, we expect a longer-term stabilization, during which the fundamentals of companies will again be more in focus for investors," emphasize Argus Securities. Stock prices on Wall Street rose by more than four percent on Monday, thanks to a decline in interbank money market rates, as well as support from the Fed Chairman for a possible new package of tax measures to stimulate the economy.

Hina’s survey shows that the greatest focus of investors today is expected to be on T-HT shares, which are among the most liquid, as well as in the construction and shipping sectors. The Baltic Dry Index (BDI) continued to decline yesterday, closing the day at 1,355 points, 83 points lower than on Friday. Some analysts believe that the shares of Končar Elektroindustrija could also attract greater investor interest after the company announced the establishment of a new company, Končar-Renewable Sources, with the primary task of investing in a 16 MW wind farm at the Pometeno Brdo location, and then selling the produced electricity. A prototype of a 1 MW unit has already been built at that location, which is in the final testing phase.

Končar’s prospects in the wind farm segment lie in the production and installation of wind turbines, especially in light of the projected increase in domestic capacity for wind energy utilization from 400 to 1,300 MW in the period from 2007 to 2020, analysts from the Hypo Alpe Adria Group’s Economic Research Department emphasize. They also point out that the implementation of Croatia’s energy strategy should positively impact domestic companies, especially in the construction sector.

Yesterday, at the meeting of the Economic-Social Council (GSV), it was concluded that the planned investment in the domestic energy sector by 2020, totaling 10 billion euros, will be a significant opportunity for the Croatian economy, and social partners will actively participate in the public discussion on Croatia’s energy strategy for the period from 2008 to 2020, which will soon begin. Croatia currently has an electricity system with a total capacity of 4,000 MW, and by 2020, it should build facilities for an additional 3,500 MW, in which it will invest more than 4.5 billion euros, announced Deputy Prime Minister Damir Polančec. Of those 3,500 MW, more than 1,500 MW should come from renewable energy sources, Polančec said, announcing the construction of a 400 MW thermal power plant in eastern Slavonia. The announced investments open up space for private capital. (H)