Crobex needs a stronger incentive

With reduced liquidity, stagnation of Crobex is expected today on the Zagreb Stock Exchange, as investors are cautious ahead of the upcoming financial report announcements from domestic companies following their strong growth since the beginning of the year.

All 7 analysts from brokerage firms who participated in the Hina survey expect stagnation of Crobex today. Crobex also stagnated yesterday, with low turnover. Thus, Crobex strengthened by 0.06 percent to 1,903 points, while Crobex10 increased by 0.01 percent to 1,067 points.

Regular trading in shares amounted to 11.33 million kuna, which is about 4 million less than on Friday.

“Stagnation in the domestic market is likely to continue today, with reduced liquidity, as investors are cautious ahead of the upcoming financial report announcements from domestic companies. The focus of investors will be on the usually most liquid shares,” says Ana Franin, financial analyst at Raiffeisenbank Austria.

The least liquid share yesterday was HT, with a turnover of 3.22 million kuna. Its price strengthened by 0.4 percent to 219.9 kuna, marking its highest level since March 13, 2012. HT announced the release of its financial reports for February 14.

“Given the rise of Crobex since the beginning of the year, we will need somewhat stronger incentives for its continued ascent,” Franin believes. Since the beginning of the year, Crobex is up 9.3 percent, while Crobex10 is up 9.9 percent.

From macroeconomic indicators, the State Bureau of Statistics will release a report today on industrial production for December of last year.

Five macroeconomists who participated in the Hina survey estimate that industrial production in December fell by an average of 5.5 percent compared to the same month of the previous year. All expect a decline, ranging from 4 to 6.9 percent.

If the estimates prove accurate, it would be a larger production decline than in November, when it fell by 4.3 percent.

Trading on foreign exchanges is cautious. On Wall Street on Monday, the S&P 500 index slightly fell after eight consecutive days of growth, while the Nasdaq index rose, thanks to the recovery of Apple shares.

The Dow Jones weakened by 14 points, or 0.10 percent, to 13,881 points, while the S&P 500 index fell by 0.18 percent to 1,500 points. The Nasdaq index, on the other hand, strengthened by 0.15 percent to 3,154 points.

On Asian exchanges, stock prices rose this morning after four days of decline, but investors are cautious ahead of new macroeconomic data and decisions from the U.S. Fed leaders.

Indeed, the recovery of the U.S. economy has fueled speculation that the central bank may begin to consider gradually abandoning its aggressively loose monetary policy.

Therefore, the Fed’s announcement on Wednesday, following a two-day meeting of its leaders, is eagerly awaited. On the same day, the first estimate of U.S. gross domestic product for the last quarter of last year will be released, while a report on employment in the U.S. will follow on Friday.

“On foreign exchanges, we expect the continuation of positive sentiment due to a good season of financial report announcements. However, investors are increasingly cautious, fearing that the Fed may soon decide to tighten monetary policy,” concludes Franin.