As the market has since the beginning of 2020 experienced a lot of uncertainty (pandemic and its related effects, supply chain disruptions, inflation, conflict in Ukraine, etc.), we decided to bring you an overview of how this affected the turnover on the Zagreb Stock Exchange.

To express how certain events are affecting the companies on the stock exchanges, one of the best ways is of course to look at the stock’s performance in a certain time period. The other is looking at the average turnover, which is correlated to the volatility of the market and by extension, the share price movements.  As there has been a lot of volatility in the last two years due to the above-mentioned reasons, there has also been a lot of turnover, both in the positive and negative direction, depending on the news.

To better see how these events affected the share’s turnover, we decided to look at the times when CROBEX10 increased on a daily basis, and look at the CROBEX10 constituents’ turnover on those days, as compared to when the opposite happened, i.e. when the index decreased. This was done in order to answer the fundamental question, is more trading done when the market is growing or when the sentiment is negative?

In total, since the beginning of 2020, there were 599 trading days (as of 24 May 2022) on the Zagreb Stock Exchange. As we are using CROBEX10 for this comparison, in its case, 318 days can be considered „bullish“, i.e. the index increased compared to the day before, while 281 days can be considered „bearish“, i.e. the index decreased compared to the day before. This would mean that since the beginning of 2020, 53% of the days were bullish, and 43% were bearish. So how did this affect the turnover of the CROBEX10 constituents?

Average turnover of CROBEX10 constituents since the beginning of 2020 (HRK)

As can be seen from the graph, the story is varied. Even though the companies which are traded the most remain roughly the same, the average turnover on bullish compared to bearish days can be quite different. Ranking these companies by turnover, HT had an average daily turnover of HRK 1.03m in the period when the market was green, while in the time the market was red, it had a turnover of HRK 1.1m. On the other hand, the 2nd most traded stock, Valamar Riviera, had an average turnover of HRK 979.1k when the market was green, but experienced a reduction to an average turnover of HRK 946.7k when the market was red. A similar story can be seen by most of the other companies, with the only notable exception being Atlantic Grupa, whose average turnover amounted to HRK 344.2k during the times when the market was positive, but HRK 412.8k when the market was negative, meaning that on average, Atlantic Grupa is traded 16.6% less during the good days than during the bad days.

Increase/decrease in turnover on positive days compared to the negative days (%)