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Podravka Again in the Spotlight of Croatian Investors

It is uncertain how the Crobex index will move today on the Zagreb Stock Exchange as analysts say there is a clear lack of enthusiasm among investors since the economic recovery is not yet in sight, unclear signals are coming from the world, and the technical picture of the market does not exude optimism.

Of the 12 analysts from brokerage firms who participated in Hina’s survey, six expect a continuation of the Crobex growth today, three expect stagnation, and the same number expect a decline. The Crobex index gained 0.72 percent yesterday after three days of decline, closing trading at 2,085 points. At the same time, Crobex10 rose by 0.74 percent to 1,083 points. Regular trading in shares amounted to 27.5 million kuna, which is about one million kuna more than the previous day. “Bad news from the domestic economy creates negative sentiment in the domestic capital market, so it is hard to expect that it will soon emerge from the negative trend that has lasted since mid-October. Therefore, I expect stagnation in stock prices today,” says Zvonimir Marić, a member of the Management Board of the brokerage firm K.D. Asset Management.

Hina’s survey shows that, in addition to the most liquid issues, greater focus from investors is also possible on Podravka shares, as the media continues to report that this company could be a target for acquisition. “Acquisitions should generally not be undertaken at the peaks of economic cycles, but when problems arise caused by economic crises, scandals, bankruptcies, and restructuring needs, as that is when there is an opportunity for a cheap purchase. Speculations about acquisitions always fuel investor interest in the shares of companies that could be targets. In the longer term, the continuation of the privatization process is also possible, given the state of the state treasury, so there could also be opportunities for investors,” concludes Marić.

Technical analysis also shows that a continuation of the negative trend is possible. “After last week’s rejection to the 38.2 percent Fibonacci retracement and a minor positive correction, this week started on a negative note, so the positive shift from last week was nullified on Monday and Tuesday,” says Srećko Fodrek, head of the Securities Trading Department at Finesa Capital. Fodrek points out that the medium-term positive trend line, which started in March, has been broken, indicating that further negative trading is possible. Since the beginning of the correction in mid-October, Crobex has lost about 10 percent of its value. “The previously mentioned support is at 2,062 points. Breaking that support opens the way to the target resulting from the double top formation at 1,940 points, which is also at a significant support level from July-August of this year. If the first support is not broken, we could see a test of the positive trend line, which is now resistance, with the first resistance at 2,151 points, and the next target at the 20-day moving average. The 20-day moving average is approaching the 50-day moving average, and their crossing will confirm the continuation of negative trading,” concludes Fodrek.(H)