ZSE: Končar Elektroindustrija on the Wings of Speculation

Today, cautious trading is expected on the Zagreb Stock Exchange, ahead of the more intense release of semi-annual financial reports from domestic companies, which will likely trigger greater price fluctuations and trading volumes in certain stocks.

All 6 analysts from brokerage firms who participated in the Hina survey expect stagnation of the Crobex today. The Crobex index strengthened by 0.58 percent yesterday, to 1,850 points, while Crobex10 rose by 0.53 percent, to 1,043 points. The regular trading volume amounted to 6.8 million kuna, which is about two million less than the day before.

The most liquid stock was HT, with a trading volume of 1.7 million kuna. Its price stagnated at 180 kuna. Among the more liquid issues, the stock of Končar Elektroindustrija stands out in terms of gains. It increased by 3.65 percent, with a trading volume of 260,000 kuna, due to media speculation that the company will be the supplier of 44 trains for Croatian Railways. The value of the deal is estimated at 1.6 billion kuna.

“Yesterday, the indices on the domestic market slightly strengthened, with somewhat lower trading volumes than in previous days. The most liquid issues remain in focus, particularly the HT stock, which began specialist trading, thus affecting the stability of its price and liquidity,” says Tamas Nagy, a broker at Erste&Steiermaerkische Bank. He adds that investors are eagerly awaiting the business results of companies.

Among the ‘more prominent’ names, the business results of Končar Elektroindustrija are expected today, while HT and Ericsson Nikola Tesla will report tomorrow.

– Therefore, I expect increased price volatility in the coming days. The financial report of HT will be particularly in focus, especially the management’s estimates for the future period, due to adjustments to new tariffs and entry into the EU – notes Nagy.

On Wall Street, the S&P 500 index fell for the second consecutive day on Wednesday due to weaker-than-expected quarterly business results from several companies, while the Nasdaq index slightly rose thanks to a strong jump in Apple’s stock price. The Dow Jones fell by 0.16, and the S&P 500 by 0.38 percent. The Nasdaq index strengthened by 0.01 percent.

On European exchanges, however, stock prices rose yesterday. The London FTSE index strengthened by 0.35 percent, while the Frankfurt DAX rose by 0.78, and the Paris CAC by 1.01 percent.

“On European exchanges, the indices strengthened yesterday, while on Wall Street they slightly weakened, influenced by the business results of companies for the second quarter,” emphasizes Nagy. The instability of stock prices will carry over into next week when most companies will announce their business results.

– I do not expect major upheavals in the market due to business results, although some companies in the technology sectors, such as Google, have unpleasantly surprised. New guidelines for investors will be provided today by the Ifo index of German business climate, as well as data on British GDP and orders for durable goods in the US for June – concludes Nagy.