Investors Await Company Results and Consumption Data

After a slight increase in stock prices last week, cautious trading is expected today on the Zagreb Stock Exchange as investors continue to assess the quarterly business results of domestic companies, and new guidance could also come from the data on domestic retail sales.

Of the 7 analysts from brokerage firms who participated in the Hina survey, 5 expect stagnation of the Crobex today, while 2 expect an increase.

The Crobex index strengthened by 0.18 percent last week, reaching 1,945 points, breaking a 4-week negative streak. The Crobex10, on the other hand, strengthened for the second consecutive week, by 0.24 percent, to 1,093 points.

Regular trading amounted to 48.2 million kuna, which is approximately 23 million less than a week earlier. However, the Zagreb Stock Exchange operated for only three days as it was closed on Wednesday for Labor Day, and on Tuesday it was closed due to technical difficulties.

– In the domestic market last week, the Crobex indices were slightly up, but there were only three trading days, so the average daily turnover reached 11.7 million kuna. The focus of investors was on the financial reports of companies, which had the most significant impact on price movements on Thursday and Friday – says Davor Špoljar, senior capital market analyst at Erste&Steiermaerkische Bank.

The highest turnover was achieved by HT shares, amounting to 13.7 million kuna, with a price drop of 2.13 percent to 209.50 kuna due to weak quarterly results.

There was also significant trading in the shares of Ericsson Nikola Tesla, which recorded a turnover of 2.8 million kuna, and its price strengthened by 3.28 percent to 1,549.20 kuna due to good quarterly business results.

The biggest winner was the share of Varteks, whose price jumped by 35 percent, and shares of shipping companies also saw strong increases. The share of Uljanik Plovidba rose by 9 percent, Jadroplov and Tankerska Plovidba by about 4 percent, and Atlantska Plovidba by nearly 3 percent.

On Wall Street, the Dow Jones strengthened by 1.8 percent last week to 14,973 points, while the S&P 500 index rose by 2 percent to 1,614 points, marking their highest levels in history.

– Partially due to news of the continuation of stimulative monetary measures by the European Central Bank and the Fed, as well as better-than-expected business results from companies, the most important indices on foreign exchanges significantly rose last week. At the end of the week, the data on the decline in the unemployment rate in the U.S. to the lowest level in the last four years at 7.5 percent also resonated well in the markets – notes Špoljar.

This morning, stock prices rose on Asian exchanges, as investors were encouraged by the record highs of the S&P 500 and Dow Jones indices on Friday. However, trading on European exchanges is cautious this morning, following last week’s strong growth.

– Trading on foreign exchanges this week will be influenced by new macroeconomic and business announcements. In the domestic market, the movement of the Crobex will likely be influenced today by the business results of domestic companies, as last week was a shortened trading week. New guidance for investors could also come from data on domestic consumption – concludes Špoljar.

The State Bureau of Statistics will today publish the first estimate of retail trade turnover for March, which, according to macroeconomists, could decline for the 13th consecutive month, but less than a month earlier.

Four macroeconomists who participated in the Hina survey expect an average decline in consumption in March compared to the same month last year of 2.7 percent. All surveyed expect a decline, ranging from 1.0 to 4.0 percent.

This would mark the 13th consecutive month of declining consumption, but at a slower pace than in February, when retail trade turnover, according to seasonally adjusted data, fell by 3.3 percent.

In stock market news, trading in Riviera shares begins today. Trading in this stock was suspended on Friday following news that the hotel company would announce a voluntary public offer for the remaining free shares of the company Dubrovnik – Babin Kuk. Riviera already holds a 94.14 percent ownership stake in that company.