The Crobex index continued to slide downwards last week under conditions of very low liquidity and a lack of investor interest in strengthening positions in stocks, and the entire month of January ended with a loss.
The Crobex index fell by 3.73 percent last week, to 1,682 points. The regular turnover in stocks amounted to a meager 88.95 million kuna.
Due to uncertainty regarding the economic situation in the world and the country, investors are reluctant to strengthen their positions in the stock market, analysts point out. Furthermore, high interest rates are drawing some capital from funds to the Zagreb Money Market, where the average interest rate reached a record 23 percent last week.
"Although stock prices in the domestic market appear very attractive at current levels, market illiquidity and the still-present uncertainty regarding the spillover of the financial crisis into the real sector are risk factors that could negatively reflect on the valuations of domestic stocks, at least in the first half of this year," emphasizes Goran Nimac, an analyst in the Economic Research Department of Hypo Alpe Adria Bank.
In light of the expected significantly lower inflow of foreign capital to emerging markets in 2009, and very weak visibility regarding earnings in the domestic real sector this year, Nimac says that the possibility of a decline in net profits of Crobex constituents in 2009 cannot be ruled out, perhaps even at double-digit rates.
During the past week the focus of investors was mainly on traditionally the most liquid issues such as T-HT and Atlantska Plovidba.
During the past week, the focus of investors was mainly on traditionally the most liquid issues such as T-HT and Atlantska Plovidba. The T-HT stock achieved a turnover of 23.4 million kuna, and its price rose by 0.45 percent, to 221 kuna. The Atlantska Plovidba stock recorded a turnover of 14.5 million kuna. Its price weakened by 2.53 percent, to 769 kuna. The management of Atlantska Plovidba proposed last week the payment of an advance dividend for 2008 of 50 kuna per share, which at current price levels gives a dividend yield of 6.5 percent.
"With this percentage, the company’s management sends a positive signal to investors at a time when leaders in the global shipping market are suspending their dividend payments," explains Nimac. However, he also notes that, considering the expectations of the Atlantska Plovidba management for approximately three times higher profits in 2008 and the fact that a dividend of 50 kuna was paid for 2007, this move by management can also be interpreted as a precautionary measure.
