Morning Gains Melt Away, Market Faces Liquidity Shortage

After a strong surge in stock prices at the very beginning of today’s trading, the gains on the Zagreb Stock Exchange are increasingly melting away as the day progresses, and the market is feeling an old ailment – a lack of liquidity.

Currently, Crobex stands at 2,175 points, što is 1.05 percent higher than yesterday. The regular turnover of shares reached approximately 43 million kuna by 1 PM."After Crobex jumped by more than 6 percent at the very opening of the exchange, influenced by optimistic trading yesterday on the American and this morning on the European exchanges, the initial optimism on the domestic exchange quickly faded," says Kristian Korunić, investment advisor at the brokerage firm Šted-Kapital.

He adds that despite yesterday’s and today’s price surge, the market continues to be marked by a negative trend."Despite the positive atmosphere on global exchanges and the arrival of positive nine-month financial reports from domestic companies, a near end to the crisis on the domestic exchange is still not in sight. The reason lies in the unenviable position of open investment funds, which continue to record withdrawals of shares," assesses Korunić. He adds that open investment funds were once the largest generators of market growth.

"We are again troubled by the problem of liquidity shortage. We are recording low turnovers, volatility is high, and there are simply no large players or funds in the market at the moment," concludes Korunić. So far, 10 issues have achieved million kuna turnovers, with the most liquid being the shares of T-HT. It recorded nearly 15 million kuna in turnover, and its price fell by 1.09 percent to 222.23 kuna. Following in liquidity is the share of Končar Elektroindustrije, with a turnover above 4 million kuna and a price increase of 0.09 percent to 380 kuna. The share of Atlantska plovidba, on the other hand, increased by 4.31 percent to 803 kuna. After a long time, Magma has also entered the ranks of shares with million kuna turnover. Its price is down by 2.8 percent to 93 kuna. (H)