For today we are bringing you an overview of the share price performance of various sectors in the regional market on a YTD basis to see how sectors performed during the first quarter of 2023.
For this, we observed primarily the median YTD share price performance of companies in our wider coverage from Croatia, Slovenia, Bulgaria, Romania, and Serbia.
2022 was marked by the Russian invasion of Ukraine that spurred a flight from equity and strong volatility that continued throughout the year. Consequently, most sectors reported a negative price movement with more than half of the sectors in red reporting a double-digit decline at a few given points. However, the first quarter of 2023 was characterized by positive development in the regional equity markets overall as participants saw the risks tempering with other risks coming to the surface during the previous few weeks.
Observing the graph below, we can see that the shipping sector has by far the largest increase with a median YTD share price increase of 25.9%. Shipping was primarily driven by Uljanik Plovidba, which noted a share price increase of as much as 77%. However, both Atlantska Plovidba and Jadroplov also noted solid returns of 19.7% and 25.9% YTD. Overall, the Shipping sector in the region outperformed other ones without a doubt.
The shipping is followed by Pharma with also high median YTD share price performance of 18.1%. However, we note the sample for this category is relatively small and might not be representative on a wider scale. Nevertheless, we note that Krka drove this sector. 2022 started shaky for Krka due to the geographical exposure to Russia, but nevertheless noted a solid year for its operations. Sales picked up 22.1% in Q4 due to quantities growth and an increase in prices of OTC medicine. Krka’s bottom line was further amplified by positive net financial results coming mainly from the rouble FX gains of EUR 44m.
Insurance follows with also an attractive double-digit yield of 14.3%. The regional insurance sector was mainly driven by Slovenian insurers, Triglav and Sava Re. Both companies noted growth in GWPs and solid combined ratios, but slightly lower profitability. Nevertheless, those companies should long-term benefit from a higher interest rate due to their portfolio being invested with higher yields. Utility and Diversified follow with a median YTD share price increase of 11.5% for both categories. Romanian Transelectrica, Transgaz and Conpet mainly drove the regional utility. However, we emphasize the price movement was volatile and if a slightly different time frame was used, returns could vary significantly due to previously high energy prices on a global scale. Diversified noted a positive development due to Petrol, Podravka and Adris. Telecommunication and Tourism follow with 11.2% and 9.9% YTD returns, respectively.
Overall, each remaining sector also noted a positive YTD return, with Construction as the only exception with a slight 1.7% YTD decline.
YTD Returns by sector (%)
Source: Bloomberg, InterCapital Research
