ZSE: Investors’ Eyes on Petrokemija

Today, cautious trading is expected on the Zagreb Stock Exchange, as well as on global markets, with investors potentially focusing on Petrokemija’s stock due to the management’s proposal to first reduce and then increase the share capital.

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

The Crobex index rose by 0.91 percent yesterday, to 1,858 points, while Crobex10 increased by 1.13 percent, to 1,062 points, moving away from the lowest levels in five months. Regular trading in shares reached 10.6 million kuna, which is approximately two million less than the previous day.

The highest turnover, 2.7 million kuna, was achieved by HT’s stock, with a price increase of 0.24 percent, to 209.50 kuna. Following was Dioki’s stock, with nearly 2 million kuna in turnover, and with a price jump of 12 percent, to 30.69 kuna, it was also the biggest winner.

Investors were also focused on AD Plastik’s stock, which increased by 2.74 percent after the proposal was made yesterday to pay the remaining dividend of 4 kuna per share, considering that an advance of 4 kuna has already been paid.

– This week, there has been more negative than positive sentiment in the domestic market. Although the Crobex indices finally perked up a bit yesterday, I expect their stagnation today, partly because it is the end of the week, but also because there are no encouraging business news – emphasizes Maja Bešević Vlajo, portfolio manager at Podravska banka.

Today, investors could focus on Petrokemija’s stock, as management proposed to the General Assembly a reduction of the share capital from 902.1 million kuna to 567.9 million kuna to cover losses from previous years.

The capital reduction would be implemented by lowering the nominal price of the share from 270 to 170 kuna, and all costs of this reduction will be borne by the company itself.

After that, the Management proposes an increase in share capital through cash contributions, with partial exclusion of the preemptive rights of existing shareholders, for a maximum of 187.44 million kuna up to a maximum of 755.43 million kuna. This would be carried out by issuing at least 551,285 to a maximum of 1,102,569 new ordinary shares in the name. There is a lot of uncertainty on foreign exchanges ahead of the release of the key employment report in the US.

– The focus of investors on foreign exchanges will be on the employment data in the US for May, due to the importance of this data for the further direction of the Fed’s monetary policy – concludes Bešević.

On Wall Street, stock prices rose on Thursday, after very volatile trading during which the Dow Jones index oscillated in a range of nearly 200 points. By the end of the day, the Dow Jones was up 0.53 percent, while the S&P 500 rose 0.85, and the Nasdaq index 0.66 percent.

Investor uncertainty is a result of fears that the Fed will soon tighten monetary policy, and that decision will depend on the state of the economy, primarily in the labor market, as the central bank has set the reduction of the unemployment rate to 6.5 percent as the main goal of its accommodative monetary policy.

For this reason, the employment report in the US, which will be released today, is eagerly awaited. In a Reuters survey, analysts estimate that in May the number of employed increased by 170,000, slightly more than in April. Meanwhile, the unemployment rate could remain unchanged at 7.5 percent.

In Asian markets, stock prices sharply fell this morning, with the Japanese Nikkei index diving into ‘bear territory’ as investors fear that the employment data in the US will be weaker than analysts expect. Meanwhile, European markets are stagnating this morning as investors do not want to take risks ahead of the US data.