With a chronic shortage of positive economic news, a continuation of stagnation is likely at the Zagreb Stock Exchange today, while new directions are expected from the data on American retail sales and General Electric’s business results.
Of the 11 analysts from brokerage firms who participated in Hina’s survey, 7 expect stagnation of the Crobex today, 2 expect an increase, and 2 expect a decline. The Crobex index weakened by 0.34 percent yesterday, to 1,891 points, while Crobex10 fell by 0.61 percent, to 995 points. Regular trading amounted to 33.6 million kuna, što is approximately 20 million more than the previous day. This is mainly due to trading in Exportdrvo shares amounting to 20.8 million kuna. As reported by the company, 35,000 of its own shares were repurchased yesterday, which constitutes 24.3 percent of the share in the capital, so Exportdrvo now has 45,790 of its own shares in its treasury, which constitutes 31.8 percent of the capital. „There are still no positive news in the domestic capital market, so stagnation of the Crobex is also likely today, along with low trading volumes. On global exchanges, however, new directions are expected from the data on American retail sales and General Electric’s business report, and we will see if the domestic market has the strength to follow external movements“, says Maja Bešević, portfolio manager at Podravska banka. From domestic macroeconomic indicators, the State Bureau of Statistics will publish a report today on retail price movements in September, which is expected to show that inflation has exceeded the level of 1 percent. Five macroeconomists who participated in Hina’s survey estimate that consumer prices in September were between 1 and 1.6 percent higher compared to the same month last year.
On average, they expect inflation of 1.3 percent, što would be its highest level this year. And on Wall Street, for the first time in many years, during the peak of the financial reporting season, the focus of investors is not on business results or macroeconomic indicators, but on the scandal in American banks, adds Bešević. Namely, on Thursday, leading American indices fell due to strong pressure on bank stocks, a consequence of the opening of an investigation into possible illegalities in foreclosures on homes, which could cost banks dearly. Bank stock prices sharply fell as investors fear that banks will pay dearly for possible illegalities in conducting foreclosures on homes. An investigation will be conducted in all 50 states of the U.S. as some employees in the largest banks admitted to approving thousands of foreclosures monthly. Although they claim that all data in court records are accurate, they also admitted that they did not verify them carefully. On Asian exchanges this morning, stock prices slightly fell, while trading on European exchanges started with slight price gains. „Although somewhat worse American indicators have been coming in over the past week, starting last Friday with a disappointing employment report in the U.S. for September, a positive trend has continued on Wall Street during that period, primarily due to expectations of monetary policy easing. However, due to these expectations, the dollar’s exchange rate is weakening, and consequently, the prices of raw materials and precious metals continue to rise“, notes Bešević.
