Mitigating instability in the domestic political scene today could provoke a positive reaction from investors on the Zagreb Stock Exchange, with an additional boost coming from the rise of leading global stock indices to their highest levels in 15 months.
Of the nine analysts from brokerage firms who participated in Hina’s survey, seven expect an increase in Crobex today, while two anticipate a decline. After spending most of yesterday’s trading in negative territory, domestic stock indices reversed direction in the late afternoon, recording gains. The Crobex index closed the day at 2,023 points, which is 0.96 percent higher than the previous trading day, while Crobex10 strengthened by 1.34 percent to 1,068 points. "I believe that the investment community will ‘reward’ the decision of the HDZ presidency to remove former Prime Minister Ivo Sanader from membership today, as this reduces uncertainty in the domestic political scene. Just yesterday, as soon as rumors began to circulate about such a decision, the market reacted positively. Additionally, investors will likely want to make up for yesterday’s lag in growth on global stock markets," says Nada Ružić, a member of the Management Board of the brokerage firm Ilirika Securities.
Prime Minister and HDZ President Jadranka Kosor stated yesterday that the honorary president of the party, Ivo Sanader, was removed from membership because his statement the day before harmed the party’s reputation, and the HDZ leadership assessed that Sanader’s statement could lead to the collapse of the Government. Partially due to instability in the domestic political scene, trading on the domestic stock exchange was very cautious yesterday, so positive winds from global markets did not affect investor sentiment. The regular turnover of shares was a modest 12 million kuna, influenced by the absence of a larger number of investors who extended their annual vacations into this shortened work week due to tomorrow’s holiday, Epiphany. "With yesterday’s breakthrough above 2,000 points, the Crobex index continues towards its first target of 2,040 points, which we believe it will achieve today. Despite tomorrow’s non-working day, we believe that by the end of the week, Crobex will reach 2,060 points, which is a level we consider crucial for Crobex to conquer higher levels," emphasizes Ružić.
