Next year, even greater market stratification can be expected

At the Zagreb Stock Exchange, most analysts today expect stagnation of the Crobex, as after three days the price of shares could strengthen caution among investors.

Of the 10 analysts from brokerage firms who participated in Hina’s survey, eight expect stagnation of the Crobex today, one expects a decline, and one expects growth. The Crobex index rose by 0.67 percent yesterday, to 1,744 points. Regular trading in shares reached almost 50 million kuna."After two days of stronger growth on low trading volumes, and yesterday’s slight increase on higher volumes, stagnation of the Crobex is possible today," says Zvonimir Marić, a member of the Management Board of K.D. Asset Management. As he points out, there is no other explanation for the jump in the domestic stock index from the beginning of the month from 1,500 to 1,700 points except that investors concluded that shares are too cheap and that it is worthwhile to invest in them at these price levels.

"It seems that investors are ‘looking for’ those price levels of shares that would correspond more accurately to expectations of a somewhat worse business environment for domestic companies in 2009," says Marić. Analysts in Hina’s survey expect investor focus mainly on the most liquid issues such as construction and shipping, as well as shares that have suffered the greatest losses in the past year."It will take a long time before investor focus returns to less liquid shares. Next year, it can be expected that the market will stratify even more, meaning that liquid shares will become even more liquid, while illiquid shares will become even less liquid," assesses Marić.

By the way, the bulk freight freight index rose by 8 points yesterday, amounting to 836 points. According to Večernji list, the Rovinj-based Adris Group, one of the most liquid domestic companies, is interested in purchasing the Slovenian retail chain Mercator, citing sources from banking circles. Mercator is also of interest to the French retail chain Carrefour, the British Tesco, and Agrokor. "Due to the large amount of money that Adris has at its disposal, they often ‘court’ all major companies that are being considered for sale. Due to business diversification, or finding the next ‘core business’, it is possible that they are interested. The question remains whether they have sufficient know-how about such a specialized business as retail," says Marić.

On Wall Street, stock prices fell about one percent on Wednesday as enthusiasm waned after the sharp Fed rate cut, and investors are beginning to worry about the surge in public debt due to efforts by U.S. authorities to prevent a deeper recession. In Asian markets, stock prices rose moderately this morning as there were no news to stimulate the market. The Nikkei index on the Tokyo Stock Exchange rose 0.6 percent this morning. "Investor focus is mainly on global movements and it could remain that way until the end of the year. There is still relatively little money in the market. However, there should no longer be waves of selling, as it seems that the withdrawal of shares from investment funds has stopped," concludes Marić for Hina’s financial service.