Crobex Rising Due to Influx of New Capital on ZSE

With positive sentiment among investors on foreign exchanges, today the Zagreb Stock Exchange expects a continuation of Crobex’s growth, especially if the influx of new capital into the market continues as it has in the previous two days.

Of the 11 analysts from brokerage firms who participated in Hina’s survey, nine expect Crobex to continue rising today, one expects stagnation, and one expects a decline. Resisting the negative sentiment on foreign exchanges, the Crobex index rose by 1.29 percent yesterday, to 2,198 points. It reached its highest level since October 23, when it was at 2,232 points. Crobex10, on the other hand, strengthened by 1.5 percent, to 1,162 points. Regular trading in shares amounted to nearly 40 million kuna, which was about 10 million kuna higher than the previous day. “The positive sentiment from global exchanges is likely to spill over into the domestic market today, so I expect Crobex to continue rising. In the last two days, stock prices have risen mainly due to the influx of new capital into the exchange,” says Kristijan Cvjetović, a member of the Management Board of the brokerage firm K.D. Asset Management.

And considering that Crobex lagged behind the growth of foreign stock indices in the last quarter of last year, especially compared to the Frankfurt DAX, there is room for its growth even when negative sentiment prevails on global exchanges, as happened yesterday, adds Cvjetović. “As long as we record increased liquidity in the domestic market, we can expect the continuation of the positive trend,” concludes Cvjetović. On Wall Street, stock prices rose on Wednesday, after uncertain trading, thanks to a message from the central American bank that the economy is recovering and that interest rates will remain at record low levels. And as American futures indices significantly strengthened after Wall Street closed, this suggests that stock prices could rise today as well. Stock prices also rose this morning on Asian exchanges, after seven days of decline, as investors were encouraged by the cautiously optimistic outlook of the American central bank on the economy and the measured report of U.S. President Barack Obama on the state of the nation. For the domestic market, technical indicators are also positive, indicating that the trend of Crobex’s growth could continue.

“The 100-day moving average has proven to be a good support for Crobex this week, and we have seen its rebound from the tested support at 2,120 points. Thus, the short-term positive trend has not been disrupted, and the breakout of 2,170 points has created conditions for further growth. The indicators are positive, and we could see the continuation of positive sentiment. The first resistance for Crobex is nearly reached at 2,200 points, and the second has been tested multiple times at 2,300 points. By breaking that level, we can set a target for Crobex at 2,400 points. In the case of a reversal, breaking below 2,170 points could lead to lower levels for Crobex. Its first support is at 2,120 points, the second support is at 2,070, while the key level is at 2,020 points,” says Srećko Fodrek, head of the Securities Trading Department at the brokerage firm Finesa Capital.

Among the important events, today the government session will address the conditions for starting a new tender for the second phase of the privatization of shipyards, which should be announced by mid-February. Additionally, the government will propose the renewal of the model under which the state subsidized non-working Fridays for companies that found themselves in a difficult situation due to the economic crisis. At the same time, it will propose a change to the model of this measure so that companies that encountered problems after July 30, 2009, when this measure was introduced, will also have the right to subsidies. For today’s session, the definition of clear criteria has also been announced, under which only companies with economic future and perspective can count on state subsidies. (H)