Investors Listen to External Developments

Today, cautious trading is expected on the Zagreb Stock Exchange, with somewhat lower liquidity typical for the beginning of the week, as investors listen to developments on foreign exchanges, while waiting for news from the domestic business sector for new directions.

Of the 7 analysts from brokerage firms who participated in the Hina survey, 4 expect stagnation of the Crobex today, while 3 anticipate an increase. The Crobex index strengthened by 0.90 percent last week, reaching 1,902 points, the highest level since September 21, 2011.

The Crobex10, on the other hand, jumped by 1.49 percent to 1,067 points, and on Thursday it reached 1,070 points, the highest level since September 9, 2011.

Regular trading in shares amounted to 77.6 million kuna, which is about 30 million less than the previous week.

Continuously rising since the beginning of the year, the Crobex has jumped 9.3 percent in the last four weeks, while the Crobex10 has increased by 9.9 percent.

– The positive trend of the Crobex continued last week, with a satisfactory level of trading considering the recessionary period, averaging 15 million kuna daily – says Davor Špoljar, senior capital market analyst at Erste&Steiermaerkische Bank.

The highest turnover, 17.8 million kuna, was achieved last week by HT shares, whose price rose by 2.57 percent to 219.02 kuna.

Following is the share of Petrokemija, with a turnover of 4.5 million kuna, and its price strengthened by 0.21 percent to 239 kuna.

The privileged share of Adris was also in greater focus for investors. With nearly four million kuna in turnover, its price jumped by 3.82 percent to 290.70 kuna.

Among the more liquid issues, price increases prevailed, with the biggest gainers being shares of the Termes group, which rose by nearly 15 percent, and Hidroelektra niskogradnje, which increased by 11 percent.

Among the losers, shares of Dalekovod stand out, with a price drop of 5.5 percent, as well as Jadroplov, Atlantic Group, and IGH, with price declines between 3 and 4 percent.

Last week, optimistic sentiment prevailed on global exchanges, thanks to signs of strengthening economies in developing countries and better-than-expected business results from companies.

On Wall Street, the Dow Jones rose by 1.8 percent last week to 13,895 points, the highest level since October 2007. The S&P 500 increased by 1.1 percent to 1,502 points, the highest level since December 2007, while the Nasdaq index rose by 0.5 percent. This marks the fourth consecutive week of gains for these indices.

European stock prices also rose last week. The London FTSE index strengthened by 2.1 percent, while the Frankfurt DAX rose by 2 percent and the Paris CAC by 1 percent.

– Last week was quite successful on foreign exchanges. For example, the Frankfurt DAX reached its highest levels in the last five years. At the end of the week, investors were encouraged by data on business confidence in Germany, and better-than-expected financial reports from companies also provided a boost to the market – notes Špoljar.

Of the reports released so far from companies whose shares are included in the S&P 500 index, as many as 68 percent exceeded expectations on Wall Street.

On Asian exchanges at the beginning of this week, uncertainty prevails as technology and automotive companies did not impress with their business results. Cautious trading is taking place on European exchanges this morning.

– Along with new financial reports, macroeconomic announcements will also provide guidance to investors this week – data on durable goods orders in the U.S. and consumer confidence – emphasizes Špoljar.

On the domestic market, cautious trading is expected at the beginning of the week.

– The beginning of the week usually passes in cautious trading and with modest liquidity, while investors listen to developments from abroad. During the week, we expect macroeconomic announcements regarding industrial production, employment, and the foreign trade balance – concludes Špoljar.