Consolidation of Crobex Before a New Rise

Thanks to the rise in stock prices on global markets, a positive sentiment is expected today at the Zagreb Stock Exchange, although Crobex may remain in a consolidation phase after a strong increase last week, reaching its highest levels since May of last year.

Of the 8 analysts from brokerage firms who participated in the Hina survey, 6 expect stagnation today, while 2 anticipate an increase in Crobex.

The Crobex index strengthened by 0.24 percent yesterday, reaching 1,808 points, while Crobex10 rose by 0.21 percent to 1,010 points. The regular trading volume amounted to 14.3 million kuna, approximately the same as the day before.

The highest turnover, 4.3 million kuna, was achieved yesterday with HT shares, which increased by 0.9 percent to 210.70 kuna. The shares of Petrokemija recorded a turnover of 1.5 million kuna, with a price increase of 5.5 percent to 240 kuna. With a million kuna turnover, the price of AD Plastika shares rose by approximately 1, while Ericsson Nikola Tesla’s shares increased by 0.2 percent.

-There is a dose of optimism in the domestic market, as seen in prices and turnover, but it is difficult to expect a strong linear continuation of the index’s growth, as was the case last week, without a short pause. As Crobex has reached its highest levels since May of last year, I expect its consolidation at these levels before a new market rise, which is not unrealistic to expect- says Goran Vorkapić, director of the Investment Banking Division at Centar Bank.

The Crobex index jumped more than 4 percent last week, reaching its highest level since May of last year, while Crobex10 reached its highest level since March. Given the recessionary environment, the question is whether there is room for further market growth.

“Although fundamentally nothing has changed, it is not necessarily required, given that stock valuations here are set very low. Currently, we have several company acquisitions underway, pre-bankruptcy settlements, announcements of privatizations, and new acquisitions, so the period ahead will certainly be interesting,” says Vorkapić.

At the end of the month, companies will begin to publish financial results achieved in the last quarter of last year and for the entire previous year, which will show how they operate in a recessionary environment.

-Although the macroeconomic situation has not improved, a number of companies have adapted to such an environment and are performing well, and some of them do not depend too much on the domestic market as they export. On the other hand, in banks, citizens’ savings are continuously growing, and gradually, when the potential of these companies is recognized, part of those funds will also come to the market. Although we are facing a rather uncertain period, I am personally optimistic- concludes Vorkapić.

And today, positive signals are coming from global markets. Although stock prices on Wall Street slightly fell on Tuesday, indices on Asian and European exchanges rose this morning, thanks to a good start to the season of quarterly business results announcements by American companies.