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Agrokor in Focus of Investors

On the Zagreb Stock Exchange, a continuation of the Crobex growth is expected today, for the third consecutive day, due to a somewhat improved sentiment among investors, as well as positive signals from global stock markets.

Of the 10 analysts from brokerage firms who participated in Hina’s survey, eight expect a continuation of Crobex growth today, while two expect stagnation. The Crobex index rose by 2.33 percent yesterday, reaching 2,115 points. The Crobex10 strengthened by 2.3 percent, reaching 1,112 points. Regular trading in shares amounted to 31.4 million kuna, which is approximately eight million more than the previous day. "Today could see the continuation of the positive trend in the domestic market, which has been ongoing since the beginning of the week. It is supported by a somewhat better investor sentiment, primarily due to Hanfa’s amendment to the regulations on pension fund investments that ease restrictions on investments in shares, but also positive signals from global stock markets," says Matko Bošković, broker and investment advisor at the brokerage firm To One.

Amendments to the Regulations on Additional Investment Criteria and Investment Restrictions for Pension Funds positively affect the market, primarily in terms of increased liquidity, which could stimulate greater interest among small investors in developments on the domestic stock exchange, adds Bošković. Encouraging signals are also coming from global stock markets. On Wall Street, the Dow Jones index jumped more than 1 percent on Tuesday, reaching its highest level in 14 months, as the weakening dollar boosted stock prices in the mining sector, and investors were encouraged by data indicating a stable economic recovery, primarily the sale of existing homes, which rose more than expected in October, reaching its highest level in three and a half years. This morning, stock prices on Asian markets also rose for the third consecutive day.

"Positive signals are coming from global stock markets. Bulls continue to dominate, and in such a mood, investors ignore bad news and ‘inflate’ the significance of good news. New guidelines will be provided today by the ADP agency’s employment data in the American private sector. This data is a traditional barometer of the situation in the American labor market ahead of the release of official employment indicators for November, which is expected on Friday," notes Bošković. Among business news, it stands out that Agrokor has successfully placed a bond issue worth 400 million euros, with an interest rate of 10 percent and a maturity of seven years. The majority of the funds will be used for debt refinancing, while about 150 million euros will be allocated for investments. However, analysts are somewhat concerned about the high cost of borrowing. "The successful bond issuance by the Agrokor group is a kind of relief for the domestic market; however, borrowing at an interest rate of 10 percent seems very expensive. It will be interesting to see how investors react to this news today," concludes Bošković. (H)