With the first quarter of the year behind us, today we look at the price movement of regional shares to see how they performed and what drove their rise and fall.
Croatia
Optima Telekom recorded the strongest share price performance this year with the company’s share price soaring 70%. The growth did not only come due to improved results but also due to expectations that HT will have to sell the company by 2021, with the process required to start in 2020. In the second places comes Koncar whose shares have also shown a stellar performance by increasing 21% YTD. It is worth noting that despite an attractive dividend of HRK 5.79 per share (DY 10%), ZABA’s share price is up just 5% since the beginning of the year. The ex-date is set on April 16th. Leading the laggards was Duro Dakovic whose bottom line showed a net loss once again (albeit 21% YoY lower), which was enough for the share price to decrease 21% since the beginning of the year.
CROBEX Components Share Price Performance (%)
Source: Bloomberg, InterCapital Research
Slovenia
Share prices of Slovenian companies showed a strong performance in the first quarter as almost all companies posted strong FY 2018 results which brought additional investors interest. Leading the list is the KD Group whose share price went up 64% since the beginning of the year. As a reminder, KD Group sold their stake in Adriatic Slovenica to the Generali Group last year for EUR 245m. Upon the receiving all necessary approvals the deal was finalized in mid-February 2019. In second places comes Cinkarna Celje who posted a record high bottom line in FY 2018. As a result, the company’s share price is now traded 15% higher than at the beginning of the year. At the same time Krka and NLB posted a flattish performance in 2019, while Intereuropa is currently the only company in the red with share price down by 5.4% YTD.
SBITOP Components Share Price Performance (%)
Source: Bloomberg, InterCapital Research
Serbia
Sojaprotein leads the list in Serbia when it comes to share price performance in 2019, with the price up 27.7% YTD. However, note that this increase was due to a takeover bid posted by the Victoria Group for the remaining 31.82% of the company. In the end, the Group acquired a mere 2.6% of shares as result of the offer, thereby increasing their share in the company to 70.8%. In the second place comes Komercijalna Banka which has recently filled headlines as a candidate for privatization. According to the media, a tender for the bank’s privatization can be expected in May or June of 2019. On the flip side, the share price of the Belgrade Airport has decreased 53% as the ex-date for the company’s lucrative dividend has passed.
BELEX15 Components Share Price Performance
Source: Bloomberg, InterCapital Research
Bulgaria
In Bulgaria, Doverie United Holding’s share price went up 74.7% since the beginning of the year after the company acquired the second largest bank in Moldova for BGN 76m (roughly EUR 39m). In the second places comes Eurohold Bulgaria whose share price went up 15% YTD. Note that the company recently submitted a binding offer to acquire assets of the Czech energy group CEZ in Bulgaria.
This move is part of the company’s long-term strategy to enter new business segments with high growth potential. On the flip side, the Sirma Group’s share price decreased by 15% despite improved results posted by the company.
SOFIX Components Share Price Performance
Source: Bloomberg, InterCapital Research
Romania
Following the rough ending of 2018, it seems that investors are regaining their confidence as most index components are currently trading in the green. Note that this can also be attributed to recently approved amendments to the tax legislation, which lessen the initially expected tax burden. The best performing companies in the observed period were Nuclearelectrica and OMV Petrom. After recording improved results on all lines, both companies went on to propose attractive dividends which provide their investors with yields of 7% and 13%, respectively. Note that other strong divided players have also recorded share price improvements, e.g. Romgaz (+18%, DY 13%), Electrica (+16%, DY 6%) and BRD (+16%, DY 12%). On the flip side, Alro led the laggards as the company recorded a significant drop in profitability with net profit decreasing by 40% YoY.
