Will the share of Hotel Cavtat continue to rise?

The Zagreb Stock Exchange is expected to see slow trading today, just like yesterday, as there are no encouraging news that would significantly move the Crobex in either direction, and foreign markets are trading nervously while awaiting the decision from the U.S. Fed.

All 7 analysts from brokerage firms who participated in Hina’s survey expect stagnation of the Crobex today.

The Crobex index weakened by 0.14 percent yesterday, to 1,825 points, while Crobex10 fell by 0.35 percent, to 1,031 points. Regular trading in shares amounted to 6.8 million kuna, which is about 1.4 million more than on Friday.

The highest turnover, 1.6 million kuna, was achieved by HT shares, whose price strengthened by 0.38 percent, to 174.48 kuna. This was followed by the regular shares of Adrisa, with a turnover of 1.1 million kuna and a price drop of 1 percent, to 295 kuna.

From the lethargic trading, the share of Hotel Cavtat stood out with a price jump of nearly 20 percent, to 300 kuna, with a turnover of 102,000 kuna.

This share was in focus for investors as Liburnia Riviera Holding was approved to announce a takeover offer for the company at a price of 308.89 kuna per share.

 - The domestic market did not have the strength to follow foreign markets yesterday, which were mostly buoyed by positive news regarding the successor to Ben Bernanke as the Fed chairman. The trading volume remained low, and as many as 9 shares from the Crobex composition had no or very little price change compared to Friday – says Nada Harambašić Nereau, a financial analyst at Raiffeisenbank Austria.

On Wall Street, stock prices rose on Monday after former U.S. Treasury Secretary Lawrence Summers withdrew his candidacy for Fed chairman.

The Dow Jones strengthened by 0.77, and the S&P 500 index by 0.57 percent. The Nasdaq index, on the other hand, weakened by 0.12 percent.

Summers, who is considered unfavorable to loose monetary policy, withdrew from the race for the head of the U.S. central bank. Investors would prefer to see Janet Yellen at the helm of the Fed, who is believed to continue the loose monetary policy similar to Ben Bernanke, whose term at the head of the central bank expires in January next year.

Asian and European markets are trading cautiously this morning as investors do not want to significantly change positions ahead of the start of the two-day meeting of the U.S. Fed.

In a Reuters survey, analysts estimate that the Fed will reduce its bond-buying programs, worth $85 billion a month, by $10 billion.

 - Trading could be nervous in the financial markets until the decision of the Fed’s Open Market Committee regarding the bond-buying program is known – assesses Harambašić Nereau.

On the domestic market, however, restrained trading is expected as there are no news that would significantly move the market in either direction.