With the end of March, the Q1 of 2023 has come to an end. In this brief analysis, we’ll look at how many different indices and companies performed, both in the region, Europe, and the US.
Q1 2023 proved once again to be a quarter of both ups and downs for the global equity markets. Filled with positive sentiments such as a milder winter and a reduction in oil&gas prices, the slowdown of inflation, as well as more positive GDP growth numbers. On the other hand, the continued war in Ukraine, the geopolitical and macroeconomic consequences of it, as well as the latter addition of bank collapses and Central bank interventions, have also marked this quarter.
To see how this affected the equity markets, we took a look at many indices and companies, in Europe as well as the US.
Select US indices performance (2020 – 2023 YTD, %)
Source: Bloomberg, InterCapital Research
Q1 2023 recorded somewhat of stabilization and growth in the US equity market, despite the challenging macroeconomic situation. In this environment, it almost felt that investors were tired of negative news, and were willing to be more hopeful about the future. This is reflected in the indices, with Nasdaq Composite increasing by 16.8% during Q1 2023, and 34.7% since 2020. S&P 500 increased by 7.0% during the quarter, as well as 27.1% since 2020. Finally, DJI recorded a slight increase of 0.38% during the quarter, but a more notable 17.3% increase since 2020.
Select European indices performance (Q1 2023, %)
Source: Bloomberg, InterCapital Research
The story is quite similar in Europe, with the French CAC 40 index leading the pack, with a growth of 13.6% in Q1 2023, followed by DAX with an increase of 12.3%, the pan-European STOXX 600 with an increase of 7.9%, WIG with an increase of 3.6%, and finally, FTSE 100 with an increase of 3.2%. Since 2020, double-digit growth was recorded by CAC 40 (+23%), DAX (+18%), and STOXX 600 (+10.3%).
Select regional indices performance (Q1 2023, %)
Source: Bloomberg, InterCapital Research
Moving on to the region, the largest increase in Q1 2023 was recorded by SBITOP, which increased by 14.3%. Following it we have CROBEX10, at 10.3%, BELEX15, at 7.9%, BET, at 4.8%, and finally, SOFIX at 1.5%. If we look at the data since 2020, there are some similarities and differences. SBITOP still leads the way, with 30.8% growth, followed by BET at 23.6%, and BELEX15 at 10.4%. Meanwhile, SOFIX grew by 7.6% in this period, while CROBEX10 increased by 7.1%.
SBITOP constituents’ performance (Q1 2023, %)
Source: Bloomberg, InterCapital Research
Slovenian blue chips also recorded noteworthy growth in Q1 2023. Leading the way, we have Cinkarna Celje, which grew by 26.1%, followed by Krka at 16.3%, Triglav at 15.9%, Petrol at 14.5%, and Sava Re, at 13.8%. In fact, only Luka Koper and Equinox recorded single-digit changes, at 3.6% and -3.6%, respectively. Overall, Q1 2023 proved quite good for the Slovenian equity market.
Finally, one last noteworthy mention is the performance of the banking sector, due to the recent developments we have witnessed.
Select regional, European, and global banks’ performance (Q1 2023, %)
Source: Bloomberg, InterCapital Research
If we look at the numbers, it isn’t surprising that the banks are in such focus. Credit Suisse, a bank that was operating with a loss for years, and in the last couple of weeks almost collapsed. It was saved only by the timely intervention of the Central Bank, afterward being acquired by the largest Swiss bank, UBS. Because of these developments, it lost 70.8% of its value just in this quarter. The situation isn’t better in the long term, as Credit Suisse had lost 93.5% of its value since 2020.
The story for the remaining banks is mixed. Bank of America also recorded a noteworthy decline in the quarter, at 13.7%, followed by Deutsche Bank at 9.6%, Wells Fargo at 9.5%, and BRD Group, at 7.7%. On the other hand, there are also clear holdouts & winners in this situation. ZABA, the largest bank in Croatia, recorded an increase of 39.8% in Q1 2023, followed by the majority shareholders of ZABA, Unicredit, at 34.5%, Banco Santander, at 24.1%, and Intesa Sanpaolo, at 14.8%.
Since 2020, ZABA is once again at the top, with an increase of 46.4%, followed by HPB at 45.7%, Unicredit at 40%, and Deutsche Bank at 36.7%. It should be noted that ZABA’s increase (and stable) share price in Q1 2023 can be attributed to its decision to pay out a sizable dividend, with a DY before the announcement of 16.3%. If you would like to read more about this, click here. Furthermore, we have also made a broader overview of the banking sector’s performance in the last couple of months, which is available here.
