The Domestic Market Will Monitor External Developments

After three weeks of continuous growth of the Crobex, during which it reached its highest levels in 15 months, cautious trading is expected at the Zagreb Stock Exchange at the beginning of the week as investors await new news from the domestic business sector.

All 8 analysts from brokerage firms who participated in the Hina survey expect stagnation of the Crobex today.

The Crobex index jumped 2.23 percent last week to 1,885 points, while the Crobex10 rose 2.07 percent to 1,051 points. These are the highest levels of these indices since September 2011.

Regular trading in shares reached 102.7 million kuna, which is about 32 million more than the previous week. Continuously rising since the beginning of the year, the Crobex indices have jumped about 8.3 percent in the last three weeks.

“Activity in the domestic market is lively. The average daily turnover last week was 20 million kuna, and the stock of Petrokemija was the most in focus for investors,” says Davor Špoljar, senior capital market analyst at Erste&Steiermaerkische Bank.

With a turnover of 12.9 million kuna, the price of Petrokemija shares fell by 1.12 percent to 238.50 kuna.

At the beginning of the week, the price of that stock jumped more than 8 percent, thanks to speculation about a possible privatization of the Kutina company.

However, when Economy Minister Ivan Vrdoljak stated on Tuesday that there are currently no plans for the privatization of Petrokemija, the price of its shares sharply fell.

Investor attention was also drawn to the news that Petrokemija signed a contract for the supply of 130 million cubic meters of natural gas with Prvo plinarsko društvo from Vukovar, with Gazprom Schweiz guaranteeing the security and conditions of delivery.

“In general, the mood on the domestic stock exchange is positive, so the prices of most shares rose last week,” emphasizes Špoljar.

The HT stock achieved more than 9 million kuna in turnover last week, and its price rose by 1.19 percent to 213.5 kuna.

Next is the Valamar Adriatic stock, with a turnover of 5.7 million kuna and a price increase of 2.65 percent to 122.15 kuna.

Among the gainers are the shares of Ingra, whose price jumped nearly 20 percent, Viaduct by 15.5 percent, Badel 1862 by nearly 11 percent, Atlantic Group by 7 percent, and Podravka by 5.5 percent.

Last week, optimism in global markets positively influenced domestic investors, thanks to signs of strengthening in the American and Chinese economies, as well as somewhat better business results from companies than expected.

On Wall Street, the Dow Jones rose by 1.2 percent to 13,649 points, and the S&P 500 index by 0.9 percent to 1,485 points, marking the highest levels of these indices since December 2007. The Nasdaq index, on the other hand, strengthened by 0.3 percent.

This morning, the rise in stock prices continued on European exchanges. The Paris CAC, London FTSE, and Frankfurt DAX strengthened between 0.2 and 0.4 percent, as investors hope that budget issues will soon be resolved in Washington.

“With encouraging data on Chinese economic growth, the main news in the American market last week was that Washington is considering the possibility of postponing the issue of raising the allowed level of government borrowing for three months. Additionally, the financial reporting season provides reasons for optimism for investors, as of the 67 companies that have reported results so far, 43 exceeded analysts’ earnings expectations,” notes Špoljar.

However, he adds, concerns about economic growth still prevail in European markets.

“As the financial reporting season continues, news from companies will be the main focus for investors in foreign markets in the coming days. In the domestic market, external developments and news from the domestic business scene will be monitored. In the last two to three weeks, the domestic market has performed quite well. It remains to be seen whether positive trends will continue this week,” concludes Špoljar.