ZSE: Zaba and Istraturist Will Be Today’s Stars

Investors’ focus on the Zagreb Stock Exchange today will be on the shares of Istraturist and Zagrebačka banka, after the bank announced an offer to acquire shares of Istraturist at a price of 156 kuna, while Crobex indices may continue to stagnate as there are currently no other encouraging news.

All 8 analysts from brokerage firms who participated in Hina’s survey today expect stagnation of the Crobex. The Crobex index strengthened by 0.31 percent yesterday, to 1,773 points, while Crobex10 rose by 0.26 percent, to 992 points. Regular trading amounted to 7.7 million kuna, which is approximately four times less than the day before.

– Trading on the domestic market was exciting yesterday due to the announced withdrawal of Istraturist shares from stock exchange listing. This caused the price of that share to drop by more than 30 percent, but towards the end of trading, the situation changed as Zagrebačka banka made an offer for a voluntary takeover of that company at a price of 156 kuna per share – says Tamas Nagy, a broker at Erste & Steiermaerkische bank.

Istraturist announced yesterday that at the assembly on December 7, the Management and Supervisory Board will propose to shareholders the withdrawal of the company’s shares from listing on the regulated market of the Zagreb Stock Exchange. At the same time, it would commit to pay fair compensation to all shareholders in the amount of 116.50 kuna per share.

However, towards the end of trading, Zagrebačka banka reported that it intends to announce a voluntary offer to acquire shares of Istraturist at a price of 156 kuna per share, which is about 33 percent higher than the weighted average of all prices achieved in trading regular shares of Istraturist in the last three months. Zagrebačka banka is the majority, 71.8 percent owner of Istraturist.

The Zagreb Stock Exchange immediately suspended trading in the shares of Zagrebačka banka and Istraturist until the end of the day. By that time, the price of Zagrebačka banka’s shares was up 2.01 percent, at 38 kuna, while Istraturist was down nearly 37 percent, at 116 kuna.

Nagy expects similar trading today as yesterday, with stagnation of Crobex, but also increased investor interest in the shares of Istraturist and Zagrebačka banka.

– Also, price volatility will continue, and with the intensification of the financial reporting season, it will become more pronounced – believes Nagy. He adds that in foreign markets, price volatility is more pronounced, given that a large number of companies have reduced their business forecasts for the upcoming period.
On Wall Street, stock prices fell for the second consecutive day on Wednesday, as investors are not inclined towards riskier investments, given that quarterly business results of companies are not impressive.
The Dow Jones index weakened by 0.19 percent, while the S&P 500 fell by 0.31, and the Nasdaq index by 0.29 percent. Asian and European markets are trading cautiously this morning, as investors are not impressed by the business results of companies.

– Of the companies in the S&P 500 index that have so far reported results for the third quarter, 69 percent achieved better results than expected, but many have reduced their forecasts for the upcoming period. Investors were also disappointed by yesterday’s Fed assessment that the US economy is only growing moderately and that the number of unemployed continues to rise – notes Nagy.

New guidelines are expected today from the release of data on the movement of the British economy, which, according to economists’ estimates, should emerge from recession in the third quarter. Data on durable goods orders for the US industry is also expected, as well as tomorrow’s data on US gross domestic product for the third quarter, concludes Nagy.