Investors Await Decisions on HPB and CO

Today, trading on the Zagreb Stock Exchange is expected to be similar to yesterday’s, when the Crobex indices stagnated with slightly higher turnover, and the focus of investors may be on the decisions from the Government’s session regarding the selection of potential investors who will participate in the sale process of CO HPB.

Of the 8 analysts from brokerage firms who participated in Hina’s survey, 7 expect stagnation of the Crobex today, while 1 expects a decline.

The Crobex index strengthened by 0.03 percent yesterday, reaching 1,795 points, while Crobex10 increased by 0.49 percent to 1,008 points.

The regular turnover of shares amounted to 11.3 million kuna, which is approximately 6 million more than the previous trading day.

Additionally, in block trading, shares of Leda achieved a turnover of 16.5 million kuna, at a price of 8,000 kuna.

In regular trading, the highest turnover, 4.7 million kuna, was achieved by HT shares. Its price weakened by 0.54 percent to 169.22 kuna, and during trading, it touched a historically low level of 168.41 kuna.

Million kuna turnovers were also achieved by the preferred shares of Adrisa, whose price weakened by 0.37 percent to 265 kuna, and AD Plastika, whose price dropped by 0.76 percent to 124.73 kuna.

 - Following an unexpected surge in turnover, the indices stagnated yesterday, with Crobex lacking the strength to surpass the psychologically important barrier of 1,800 points again. I expect similar trading today as in previous days, namely stagnation of the Crobex – says Tamas Nagy, a broker at Erste&Steiermaerkische Bank.

He adds that there was slightly more trading in the shares of Croatia Insurance (CO) and Croatian Postal Bank (HPB) yesterday, after media announced that Adris, which offered 234 million euros, and Polish PZU, with a total offer of 171.5 million euros, could enter the second round of privatization and recapitalization of CO.

In the second round for the privatization of HPB, Erste Bank, which made the highest offer of 130 million euros for 99 percent of the shares, and Hungarian OTP Bank could enter.

The price of the regular CO share weakened by 0.75 percent to 6,450 kuna, with a turnover of 516,000 kuna.

At the same time, the price of HPB shares stagnated at 1,561 kuna, with a turnover of nearly 114,000 kuna.

 - From today’s Government session, we are awaiting a decision on the selection of potential investors who will participate in the sale and recapitalization process of CO and the sale of HPB – notes Nagy.

Meanwhile, on Wall Street, the Dow Jones and S&P 500 indices slightly rose on Wednesday after two days of sharp declines, as U.S. President Barack Obama called representatives of both Republicans and Democrats for talks to try to find a solution for uninterrupted state financing.

The Dow Jones strengthened by 0.18 percent, while the S&P 500 rose by 0.06 percent. The Nasdaq index, on the other hand, weakened by 0.46 percent.

Investors were somewhat encouraged by President Obama’s decision to nominate Janet Yellen as the chair of the U.S. Federal Reserve. If she is supported by the Senate, Yellen will succeed Ben Bernanke in January as the first woman to head the Fed, which is positive for stock markets as Yellen advocates for loose monetary policy, similar to what Bernanke has pursued so far.

This morning, the main indices on European exchanges are also recording slight gains.

 - On foreign exchanges, sales have calmed down, but uncertainty remains, as there is still no political agreement in the U.S. regarding the budget, and an even bigger problem is looming – the U.S. government’s debt ceiling. Any delay in their solutions will have a significant impact on the global economy – concludes Nagy.