Regular trading in shares amounted to 37.6 million kuna last week

The Crobex index weakened for the fourth consecutive week, and with low liquidity due to a lack of encouraging news, the biggest loser was the Dioki share as the financial restructuring plan for the company was not accepted.

The Crobex index fell by 0.60 percent last week, to 1,794 points, dipping below the psychologically important level of 1,800 points for the first time since June. The Crobex10, on the other hand, strengthened by 0.62 percent, to 1,011 points.

In the past four weeks, the Crobex has lost 1.71 percent, while the Crobex10, despite last week’s growth, fell by 2.28 percent.

Regular trading in shares amounted to 37.6 million kuna last week, which is about 8 million less than the week before. In a block transaction, an additional 16.54 million kuna was achieved in trading the Leda share, at a price of 8,000 kuna.

In regular trading, this share was also at the top of liquidity, with weekly trading of 2.34 million kuna. Its price fell by 0.19 percent, to 7,925 kuna.

The most liquid was the HT share, with a turnover of 11.66 million kuna. Its price weakened by 0.14 percent, to 172.5 kuna. During the week, it also touched a record low of 168.41 kuna.

“The domestic market continues to be characterized by low liquidity due to a lack of encouraging news. Meanwhile, the Crobex has fallen below the psychologically important boundary of 1,800 points. Last week, attention was drawn to the news about the selection of potential investors for Croatia osiguranje and Hrvatska poštanska banka. Now, a deep dive into their business begins, and binding offers are expected in a month,” emphasizes Boris Mažurin, an analyst in the Economic Research Department of Hypo Alpe Adria Bank.

The price of the regular share of Croatia osiguranje fell by 4.6 percent last week, to 6,200 kuna, with a turnover of 591,000 kuna, while the preferred shares fell by 2.9 percent, to 6,700 kuna, with turnover below 100,000 kuna.

The HPB share decreased by more than 10 percent, to 1,398 kuna, with a turnover of 129,000 kuna.

On Thursday, the government selected two bidders who will participate in the further privatization process of these companies. In the race for HPB are OTP and Erste&Steiermaerkische Bank, while for Croatia osiguranje are Adris grupa and Polish PZU.

Prime Minister Zoran Milanović stated that for HPB, the sale criterion is the best price, while for Croatia osiguranje, the government wants to retain a controlling stake and bring in a partner who will ensure regional expansion and recapitalization, while keeping the name and headquarters.

“This could be positive for the capital market if, after all, a public offer for the purchase of the remaining shares in CO is conducted. At the same time, the Croatian state is sending a positive message to the investment public with these privatizations,” notes Mažurin.

Last week, trading was also marked by the Dioki share, which was the biggest loser, as on Thursday, most creditors at the hearing within the pre-bankruptcy settlement did not accept the financial restructuring plan for the company.

The pre-bankruptcy settlement procedure will now be suspended, which means that Dioki is going into bankruptcy.

The Dioki share plummeted last week by 81.61 percent, to 5.15 kuna, with a turnover of 1.53 million kuna.

Under selling pressure were also shipping shares, primarily due to a sharp drop in the BDI freight index. On Thursday alone, the BDI fell by more than 5 percent, and on Friday by more than 4 percent, ending the week at 1,985 points.

The prices of the shares of Atlantska plovidba and Tankerska plovidba fell by more than 9 percent last week, while Jadroplov and Uljanik plovidba fell by about 2 percent.

“Next week, I do not expect major changes in the domestic market. Investors will monitor developments on foreign exchanges, especially the resolution of the crisis regarding U.S. financing,” believes Mažurin.

And on global exchanges, stock prices rose last week, after two weeks of decline, as investors hope that an agreement on state financing will soon be reached in Washington to allow government employees to return to work and enable the government to regularly meet its financial obligations.

On Wall Street last week, the Dow Jones rose by 1.1, and the S&P 500 index by 0.7 percent.

On European exchanges, the London FTSE strengthened by 0.5 percent, while the Frankfurt DAX rose by 1.2, and the Paris CAC by 1.3 percent.

“Investor hopes have strengthened in the markets that Republicans and Democrats will manage to reach an agreement on further state financing. The nomination of Janet Yellen as the new chair of the Fed has also positively influenced the markets, given her reputation as an advocate of loose monetary policy,” says Mažurin.

In the coming days, political negotiations in the U.S. will be in focus for investors, as well as the announcement of business results and a series of macroeconomic indicators from the U.S., if government institutions start working again, concludes Mažurin.