Today, we are bringing you an overview of the impact that the positive and negative periods during 2024 had on the trading of the LJSE, as well as a quick analysis of the SBITOP and its constituents in this regard.
In this overview, we’ll look at the average turnover during the bearish (positive) and bullish (negative) periods in the LJSE. The measurement of positive/negative returns is the overall performance of the largest Slovenian blue-chip index, SBITOP. In other words, when SBITOP increases on a daily basis, it could be considered a positive period, and vice versa.
Of course, looking at the turnover itself does not tell the entire story, as this should be combined with the overall performance of the stocks which are analyzed. 2024 thus far has been an extremely strong year for Slovenia, with most of the SBITOP constituents recording double-digit growth rates as can be seen in the graph below:
Performance of SBITOP constituents in 2024 YTD (%)
Source: Bloomberg, InterCapital Research
This performance is also evident if we look at the turnover. In fact, out of the 135 trading days thus far in 2024, 67% could be considered “bullish”, while only 37% could be considered “bearish”. This means that for the majority of the year thus far, SBITOP constituents and by extension, the index itself, recorded positive returns. Cumulatively, this led to the strong performance described above.
There are many reasons for this strong performance by the SBITOP constituents, ranging from more macroeconomic conditions such as the downward trend in inflation to the recent rate cut by the ECB, but the main reason in this category is for sure the more positive sentiment in equity overall, which has been present for much of this year as compared to the previous years. And there are reasons to be positive, besides lower inflation & expectations of lower interest rates, economic growth is also returning, as opposed to the expected recession forecasts from last year for 2024. The geopolitical situation, like the War in Ukraine or the conflict in Gaza, and by extension the trouble with shipping in the Red Sea has also remained relatively stable after the initial shocks seen in 2022 and 2023.
Of course, it isn’t set in stone that any of these things will remain this way, but the current market sentiment expects it to be so. Besides this, individual stocks performed really well in their respective sectors. NLB, which recorded the largest growth on a YTD basis, has been recording extremely positive results in the banking sector, and with news related to its new 2030 business strategy (more on that here), and the Addiko acquisition (more on that here, and here), the outlook for the bank’s future is also positive. A similar situation is present with Krka, who continued to record sales growth across all regions, despite the ever-increasing sanctions on Russia which might affect Krka’s business more severely in the future.
Sava Re also recorded good results, while Petrol’s business outlook improved as the strain from the imposed margins lessened, as did energy prices which severely limited the Group’s profitability in 2022 and 2023. In general, 2024 proved to be a good year both on the macro and operational levels of these companies.
Average turnover of SBITOP constituents in 2024 YTD (EUR ‘000)
Source: Bloomberg, InterCapital Research
Turning our attention to turnover, 2 names stand out once more: Krka at an average of EUR 612k, and NLB at an average of 571k. Only loosely following them we have Cinkarna Celje at EUR 123.4k, Petrol at EUR 102k, Sava Re at EUR 100k, and Triglav at EUR 88k. However, if we look at how much did their turnover changed on the positive and negative days, Krka’s average turnover increased to EUR 620k during the positive and decreased to EUR 581k during the negative days. Following them, there is NLB, whose turnover grows to an average of EUR 581k during the bullish periods, and drops to EUR 550k during the bearish periods.
Increase/decrease in the turnover on positive days as compared to the negative days (%)
Source: Bloomberg, InterCapital Research
The difference in the turnover is most evident when we compare the raw averages on the positive and negative days. The largest difference is recorded by Sava Re, with 53% higher turnover during the positive days, followed by Cinkarna Celje at 17%, Triglav at 8%, and NLB at 6%. On the other hand, Luka Koper, Petrol, and Telekom Slovenije recorded 12%, 11%, and 11% higher turnover during the negative days.
What this data can tell us is that some of these stocks, which are usually less traded do get more spotlight and attention when some news related to them appears. If the news is positive, higher turnover is recorded, and vice versa. Of course, in relative terms, some of these changes might seem large, but in absolute, even the largest difference recorded by Sava Re is only app. EUR 40k.
