As July is coming to an end soon, and the summer season is here & vacation time is approaching, we decided to provide you with a brief overview of the Croatian & Slovenian equity market’s performance since the start of this year.
So far, 2024 has seen positive movements in global capital markets, continuing the optimistic sentiment from 2023. Better-than-expected macroeconomic developments eased recession fears. During July, both the S&P 500 and NASDAQ had reached new ATH. Anticipation of central bank interest rate cuts bolstered this bullish sentiment. While the ECB did cut rates in June, further cuts are now less certain. The FED, however, has yet to make the anticipated cuts, with hopes now pinned on their September meeting. Despite this, market sentiment remains strong, evidenced by the S&P 500 and NASDAQ recording YTD returns of 17.7% and 22.6%, respectively. Both Croatian & Slovenian followed the same positive development on the back of the sentiment driven by strong macro data.
YTD performance of selected indices
Source: InterCapital Research, Bloomberg
The positive trends in global equities spilled over into regional markets, resulting in double-digit returns on the ZSE and LJSE. Notably, the Slovenian SBITOP index outperformed with a 31% YTD return, surpassing even NASDAQ’s performance. The CROBEX10 had a YTD return of 11.2%, slightly lower compared to DAX.
YTD performance of CROBEX10 constituents
Source: InterCapital Research, Bloomberg
Among the CROBEX10 constituents, Končar, HPB, and Valamar Riviera were the clear winners. Končar’s share price surged by 43.3% YTD, followed by HPB with a 29.4% increase. Valamar Riviera also saw a respectable 9.3% increase. Conversely, Atlantska Plovidba experienced the biggest decline at 7.5%, followed by Ericsson NT and Atlantic Grupa with 3.5% and 2.7%, respectively.
Končar’s growth was driven by a 22.5% YoY increase in sales revenue in Q1, with the distribution segment reaching record levels, earning 71% of revenue. This resulted in a record-high EBITDA margin of 16.6% and tripled net income compared to Q1 2023. HPB’s share price increase followed impressive Q1 results, with a 69% YoY increase in operating revenue, leading to a 111% increase in EBIT and a 32.7% rise in net income, marking the highest quarterly net income of EUR 32.7m.
5 most liquid stocks on ZSE during the first six months [EURm, block trades included]
Source: InterCapital Research, ZSE
In terms of equity turnover (including blocks), the top five traded companies on ZSE accounted for 37.7% of total turnover in the first six months. Valamar Riviera recorded the highest turnover at 7.8%, followed closely by Ericsson NT and Hrvatski Telekom, each capturing 7.7%. Total equity turnover increased by c. 50% compared to H1 2023.
YTD Performance of SBITOP constituents
Source: InterCapital Research, LJSE
On the LJSE, NLB, Krka, and Petrol were the top performers. NLB’s share price appreciated by 54% YTD, Krka saw a 33.6% increase, and Petrol recorded a 31.8% rise. All SBITOP constituents had positive performances in the first half of 2024, with the lowest YTD increases by Zavarovalnica Triglav and Equinox at 5.8% and 8.6%, respectively.
NLB’s strong performance was attributed to a high-interest rate environment and a 6% YoY increase in loans issued in Q1, resulting in a 23% increase in sales revenue and a 17% rise in net income compared to Q1 2023. This, along with the company’s new 2030 business strategy, supported its strong growth. Krka’s growth was driven by continued demand and revenue growth across all markets in Q1.
5 most liquid stocks on LJSE during the first six months [EURm, block trades included]
Source: InterCapital Research, LJSE
The top five traded companies on LJSE accounted for 86.7% of total turnover in the first six months. Krka led with 35.3% of total equity turnover, followed by NLB with 32.7%. Cinkarna Celje, despite not being in the top three in YTD performance, had the third-highest turnover at 6.9%, followed by Petrol at 6.5%. LJSE saw a 47% increase in total equity turnover compared to the same period in 2023, amounting to EUR 43.1m more in absolute terms than ZSE.
The 2024 YTD was marked by significant growth and strong performances across both global and regional markets. As we move into the second half of the year, the continued positive sentiment and macroeconomic conditions will be key factors to watch.
