Encouraged by the improved turnover recorded on the ZSE in 2019, we decided to analyse the activity of the most traded share in the region over the period from 2008 until today.
Low liquidity has been a long-term problem for regional markets and has discouraged many investors from investing in some of the local companies. However, certain market favourites have always existed and have been able to maintain a rather fair amount of turnover through good corporate governance and solid performance which sparked investors interest. Therefore, we decided to analyse the activity of the most traded shares in the region since 2008. To streamline the process we narrowed the analysis to only six companies from the Croatian, Slovenian and Romanian market.
Croatia
Overall, in May 2019, the ZSE recorded an average daily turnover of roughly EUR 1.48m, which represents a 46.6% YoY increase, indicating that investors’ confidence has risen. Of the total value traded in the period (excluding block transactions), Valamar generated 22.5%, followed by HT with 13.4%, Adris (preferred shares) with 12.8%, Končar and Podravka with 9.8%. These 5 shares generated more than two-thirds of the turnover recorded by the entire market.
HT Average Daily Turnover (EUR 000)
Valamar Average Daily Turnover (EUR 000)
Source InterCapital Research
Despite the recent high numbers, we see that for most of the observed companies trading volumes were far more pronounced in the beginning of the shown period. Later, volumes decreased significantly with only occasional significant aberrations. For example, a significant upsurge was seen in the case of Koncar when the state sold its stake in 2016.
Koncar Average Daily Turnover (EUR 000)
Adris (preferred) Average Daily Turnover (EUR 000)
Source InterCapital Research
However, both Atlantic Grupa and Podravka can serve as an example how strong results can have a positive influence on the company’s turnover. As once can notice on the chart, in 2018, when both companies posted record results the average daily turnover jumped above previous levels.
Atlantic Grupa Average Daily Turnover (EUR 000)
Podravka Average Daily Turnover (EUR 000)
Source InterCapital Research
Slovenia
In Slovenia the trend is similar to the one in Croatia with almost all major companies recording a decrease in average turnover over the past decade.
Krka Average Daily Turnover (EUR 000)
Petrol Average Daily Turnover (EUR 000)
Source InterCapital Research
However, standing as an outlier among decreasing turnovers, we have Cinkarna Celje. The company’s strong results and accompanying dividends managed to attract investors interest, thus significantly increasing the company’s average turnover in the observed period. Still one should note that the average daily turnover is still below EUR 100k.
Telekom Slovenije Average Daily Turnover (EUR 000)
Cinkarna Celje Average Daily Turnover (EUR 000)
Source InterCapital Research
Meanwhile, the insurance sector which provides some of Slovenia’s best performing companies has seen mixed results. Although Sava Re was initially recording improved liquidity, during the last couple of years liquidity has been decreasing and has now fallen below its initial level. On the flip side, Triglav has been successful in improving their liquidity with their current average daily turnover standing at three times the amount recorded in 2008.
Sava Re Average Daily Turnover (EUR 000)
Triglav Average Daily Turnover (EUR 000)
Source InterCapital Research
Romania
Romania has always been the most liquid market in the region, and unlike Croatia and Slovenia investors had less problems with investing large sums. However, this does not mean that the market was spared of the overall decline in liquidity.
BRD Bank Average Daily Turnover (EUR 000)
Banca Transilvania Average Daily Turnover (EUR 000)
Source InterCapital Research
When observing the two Romaian banks it is interesting to see how the average daily turnover in 2019 recorded a significant jump in the aftermath of the new tax legislation introduced at the end of 2018. It seems that the large drop in value was enough to attract investor who believe in the recovery of the local banking shares.
OMV Petrom Average Daily Turnover (EUR 000)
Romgaz Average Daily Turnover (EUR 000)
Source InterCapital Research
Among Romanian shares one should also highlight Fondul Propiretatea whose average daily turnover has been significantly decreasing, despite the fact that the company often holds large share buy-back programs.
Fondul Proprietatea Average Daily Turnover (EUR 000)
Electrica Average Daily Turnover (EUR 000)
Source InterCapital Research
In Q1, slightly less than HRK 320m was invested in the mobile network, recording an almost 100% increase.
As HAKOM published an announcement regarding mobile network trends in Q1 2019, here are its key takes.
In Q1, slightly less than HRK 320m was invested in the mobile network, recording an almost 100% increase. Such an increase came after the fee reduction and allocation of new 2,100 MHz and 2,600 MHz frequency bands.
The number of broadband internet access connections in the fixed network increased by more than 3% YoY. The number of connectors through copper pairs is constantly decreasing, the number of connectors being increased through fiber optic and high-speed cable networks. FttH fittings observed the highest increase of about 40% YoY. Fixed-voice services are traditionally declining and are less beneficial.
In the mobile networks, revenues from telephone services increased by almost 3% with a simultaneous increase in the number of users. The number of received SMS and MMS recorded a decrease of 13% of the use of alternative Internet applications.
Further, when observing total Internet traffic, it recorded a 23% increase. The growth of data traffic in fixed networks is less due to the growth in traffic in mobile networks.
The users still prefer the fixed and mobile network service, and the total number of such users has increased by 8.5%. The market distribution of TV programs with the payment of fees recorded an increase of around 4%. IPTV continues to be the leading technology with a market share of around 29%, which is a significant development of this part of the market, and it is still significant since 44% of households are watching TV exclusively via DVB-T signals from the transmitter.
Infond is an asset management company which has around 12% market share in Slovenia, in terms of the number of funds and assets under management.
Sava Re published a document stating that they acquired a 77% stake in the share capital of Infond d.o.o. and an additional 7% stake under the sales agreement of 15 January 2019, totaling an 84% stake in the share capital. With the subsidiary Zavarovalnica Sava, already holding a 15% stake in the company, the members of the Sava Insurance Group now hold 100% of the voting rights in Infond.
Infond is an asset management company which serves over 80,000 investors and manages assets in excess of EUR 300m in the Infond Umbrella Fund, which is made up of 22 sub-funds offering diverse investment. The company ranks as a major asset manager in Slovenia with a market share of around 12% in terms of the number of funds and assets under management.
Sava Re notes that this acquisition is a further step in the strategy of the Sava Insurance Group of acquisitions-based growth in asset management, which alongside insurance business is a major pillar of the Group’s operations.
As a reminder, earlier this year, MedLife acquired 51% of the Rozsakert Medical Center Group of companies (RMC) in Hungary.
Med Life published a document in which they state that the company aims to raise the credit limit by EUR 15m. According to the company’s representatives, the company’s other own funds will be added to this increase up to a total of EUR 20m, the main objective of which is the development of the acquisition program and the national and international expansion.
As a reminder, earlier this year, MedLife acquired 51% of the Rozsakert Medical Center Group of companies (RMC) in Hungary which is one of the top ten providers of private medical services in Hungary.
To read more about Med Life’s Q1 2019 results click here.