Analysts are still ‘digesting’ business results

At the Zagreb Stock Exchange, there are currently no significant corporate news, so trading today could be cautious, with modest liquidity.

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 fell by 1.22 percent last week, to 1,921 points, while the Crobex10 dropped by 1.53 percent, to 1,076 points, not far from their lowest levels since the end of February. The regular turnover amounted to around 46 million kuna, which is approximately 2 million less than a week earlier.

– The negative mini-trend in the domestic market continued last week. In the past 6 trading weeks, the Crobex recorded a decline in five of them. Last week’s drop of 1.2 percent is the largest in the last five weeks – emphasizes Davor Špoljar, senior capital market analyst at Erste & Steiermaerkische Bank. Last week, trading was also marked by modest liquidity.

– The average daily turnover in shares was 8.2 million kuna, which is the weakest in the last month. Investors were mainly ‘digesting’ previously published business results of companies for the first quarter of this year – notes Špoljar. The highest turnover, 6.7 million kuna, was achieved by the HT share, whose price fell by 0.7 percent, to 208.10 kuna.

With a turnover of around 4 million kuna, the share of Ericsson Nikola Tesla followed, which decreased by 1.1 percent, to 1,532 kuna. Most other shares that had million kuna turnover last week also lost value. The price of the preferred share of the Adris group slipped by 0.3 percent, while the share of Petrokemija fell by 2.9 percent.

– The Petrokemija share is in somewhat greater focus for investors in anticipation of the company’s recapitalization. Investors are interested in the details of the recapitalization, primarily at what price it will be conducted – notes Špoljar.

Among the biggest losers was the share of the IGH Institute, with a price drop of 11.4 percent, after the Tax Administration blocked the business accounts of this construction company due to a tax debt of 9.4 million kuna. Other significant losers include Siemens shares, down nearly 10 percent, Podravka, 6.5 percent, and Badel 1862, 6.4 percent.

On the other hand, the share of Hidroelektra niskogradnje made it to the list of biggest gainers, with a price increase of 16.4 percent, followed by Auto Hrvatske shares, 10.17 percent, and Atlantska plovidba, 6.85 percent.

On Wall Street last week, the S&P 500 index strengthened by 1.2 percent, to 1,633 points, a new record level, while the Dow Jones, with a 1 percent increase, broke above the psychologically important threshold of 15,000 points for the first time in history.

European stock prices also rose last week. The London FTSE index strengthened by 1.6 percent, to 6,624 points, while the Frankfurt DAX jumped by 1.9 percent, to 8,278 points, the highest level in history.

On the Tokyo Stock Exchange, the Nikkei index rose by 6.7 percent last week, marking its largest weekly jump since December 2009. It reached 14,607 points, the highest level in five and a half years.

“Last week on foreign exchanges was quite positive, primarily as a result of stimulative monetary policy worldwide, but also due to business results of companies and macroeconomic indicators that mostly exceeded analysts’ expectations,” assesses Špoljar.

On European exchanges today, cautious trading is expected, and the week will be marked by new macroeconomic announcements.

“Along with today’s data from China on industrial production and retail sales, numerous other economic announcements will be monitored. Tomorrow, data on industrial production in the eurozone will be published, and the day after tomorrow on the eurozone’s gross domestic product, industrial production in the USA, and unemployment in the UK,” notes Špoljar.

As he adds, there are currently no significant corporate news in the domestic market, just media speculation about the possible involvement of the state in the recapitalization of Petrokemija and that the government will start negotiations with MOL in June regarding the management of INA and investments, but this does not have the strength to significantly move the market.

“Therefore, trading in the domestic market will likely be cautious, with modest liquidity,” concludes Špoljar.