The Direction of Crobex Will Primarily Depend on Movements in Foreign Markets

Calm trading is expected today on the Zagreb Stock Exchange, with modest liquidity, while the direction of Crobex could primarily depend on movements in foreign markets.

Of the 6 analysts from brokerage firms who participated in Hina’s survey, 5 expect stagnation of Crobex today, while 1 expects an increase.

The Crobex index fell by 0.44 percent last week, to 1,841 points, while Crobex10 decreased by 0.60 percent, to 1,038 points.

As a result, the indices ended August in the negative. Throughout the past month, Crobex weakened by 0.36 percent, while Crobex10 decreased by 0.1 percent.

Regular trading in shares amounted to 43.6 million kuna last week, which is about 20 million kuna less than the week before.

“Last week, price declines prevailed in the domestic market, with modest liquidity, which averaged only 7.5 million kuna per day,” says Davor Špoljar, senior capital market analyst at Erste&Steiermaerkische Bank.

The most traded stock last week was HT, which achieved a turnover of 9.6 million kuna, and its price rose by 3.25 percent, to 183.48 kuna.

Following in turnover are the shares of Ingra and Dalekovod, whose prices significantly increased after new news regarding pre-bankruptcy settlements.

Thus, the share of Ingra, with a turnover of 3.2 million kuna, saw its price rise by 19.44 percent, to 3.87 kuna.

A pre-bankruptcy settlement procedure was initiated for the company at the beginning of the week, and by the end of the week, its business accounts, which had been blocked since May 2012, were unblocked.

The share of Dalekovod, on the other hand, increased by 25.95 percent, to 33.25 kuna, with a turnover of 1.98 million kuna.

At the beginning of the week, the Constitutional Court annulled the decision of the Zagreb Commercial Court to halt the pre-bankruptcy settlement for Dalekovod due to the assessment of the constitutionality of certain provisions of the Financial Operations and Pre-Bankruptcy Settlement Act. The Constitutional Court also ordered that the pre-bankruptcy settlement procedure for Dalekovod continue without delay.

In terms of price growth, shares of Badel 1862 increased by 14.23 percent, as well as Francka and Varteks, by more than 8 percent.

On the other hand, among more liquid issues, a significant price drop was recorded for the shares of Slavonski ZIF, by 4.4 percent, followed by Đuro Đaković Holding, by 3.3 percent, and Ina, by 3.29 percent.

“Trading is likely to be calm today as well, with modest liquidity, while the direction of Crobex could primarily depend on movements in foreign markets,” assesses Špoljar.

Last week, stock prices on global markets sharply fell. On Wall Street, the Dow Jones weakened by 1.3 percent last week, while the S&P 500 slid by 1.8 percent, and the Nasdaq index by 1.9 percent.

On European markets, the London FTSE fell by 1.2 percent, while the Frankfurt DAX plummeted by 3.7 percent, and the Paris CAC by 3.3 percent.

“Most European and global stock markets ended the week in negative territory, primarily due to concerns about military intervention in Syria and the potential reduction of monetary stimulus to the U.S. economy. Most investors are likely to closely monitor developments regarding Syria and the Fed this week, as well as macroeconomic announcements,” notes Špoljar.

Among macroeconomic announcements, investors will today monitor the release of the PMI index of industrial activity in Germany, the UK, and the Eurozone, and tomorrow the ISM index of industrial activity and construction spending in the U.S.

“Investors are also awaiting the second estimate of Eurozone GDP for the second quarter. However, the key announcement will be the employment report in the U.S. for August at the end of the week. This is the last significant macroeconomic announcement before the Fed meeting, and it will signal whether there will be a reduction in monetary stimulus to the U.S. economy as early as September,” concludes Špoljar.