Financial Reports Did Not Awaken Domestic Investors

The weak reaction to the financial reports of domestic companies and low trading volumes indicate that investors on the Zagreb Stock Exchange are not inclined to make significant position changes, so trading is expected to continue today without major excitement.

Of the 8 analysts from brokerage firms who participated in Hina’s survey, 6 expect stagnation of the Crobex today, while 2 expect an increase. The Crobex index strengthened by 0.42 percent yesterday, reaching 1,828 points, while the Crobex10 rose by 0.7 percent to 973 points. The regular trading volume amounted to 12.7 million kuna, što is on par with the previous day. "I expect an increase in the Crobex today, due to the positive sentiment prevailing on global stock markets following better-than-expected financial reports from American and European companies," says Matko Bošković, a broker and investment advisor at Centar banka. Although the domestic market has not had the strength to follow the positive trend on global markets in recent months, it has managed to track strong price jumps in the last hours of trading after što trading begins on Wall Street, says Bošković. "Financial reports from companies for the second quarter have started to arrive on the domestic economic scene, but the reaction from investors has been minimal," notes Bošković. This morning, positive signals are again coming from global markets. Thanks to the weakening of the yen and good quarterly business results from Japanese companies, the Nikkei index on the Tokyo Stock Exchange jumped sharply this morning, while other Asian markets are trading cautiously, similar to yesterday on Wall Street.

After three days of strong growth, the S&P 500 index on Wall Street weakened on Tuesday as investors were shaken by data showing a decline in consumer confidence and weak quarterly business results from several companies. European stock markets are recording slight gains this morning for the seventh consecutive day. "Investors on global markets will focus on the release of American macroeconomic indicators for the remainder of the week, particularly regarding GDP for the second quarter. After što most leading American companies reported convincingly better business results than expected and did not lower their business expectations for the upcoming period, investors expect good macroeconomic indicators for the continuation of the positive trend on global markets," emphasizes Vjeran Jureša, an analyst at the investment company To One.

On the domestic capital market, however, the season for the release of financial reports from domestic companies, coupled with chronically low liquidity, has not had a significant impact on stock prices, Jureša notes. At yesterday’s public auction on the stock exchange, minority equity stakes from the portfolio of the Croatian Privatization Fund (HFP) and the Croatian Health Insurance Institute (HZZO) were sold in four of the six offered companies, totaling 667.2 thousand kuna. In two days of public electronic auctions on the stock exchange, a turnover of 3.8 million kuna was achieved. "After the partial success of two public auctions by the HFP, where stakes in 10 of the 20 offered companies were sold, it can be concluded that investors are currently not inclined to make large transactions, što can be explained by the lack of available capital or dissatisfaction with the requested prices," concludes Jureša.  (H)