During 2023, the market value of all listed companies on BVB exceeded RON 300bn, total transactions of RON 38bn were recorded, and the largest IPO in Europe in 2023, that of Hidroelectrica also took place. Lastly, the BET index gave a return of 32% YoY, while the BET-TR (total return) index recorded 40% YoY growth, marking the best performance in the region in 2023.

2023 turned out to be a really strong year for the Bucharest Stock Exchange, with multiple records being set. The total trading value across all markets, and including all types of financial instruments exceeded RON 38bn, growing by 58% YoY. The total market value of all listed companies grew to over RON 300bn, supported by a 20% listing of Hidroelectrica at RON 9.3bn. This also represented the largest IPO in Europe in 2023.

The positive news and continued developments on the exchange also attracted a large number of investors. According to the latest available data, by the end of September 2023, the number of investors reached over 168k, growing by 40k YoY, and compared to the end of 2019, tripling from 54k.

In terms of the total trading equity trading activity (including ETFs), during 2023 it amounted to RON 14.9bn, growing by 15% YoY, while in December 2023, it amounted to RON 2.19bn, growing by 5% YoY. This would translate into an average daily turnover of RON 60.4m during 2023, an increase of 15.7% YoY, and RON 121.4m during December 2023, an increase of 10.9% YoY.

Moving on to the performance of the Romanian equity market, 2023 was also a good year for the main index, BET, which grew by 32% YoY, reaching 15,371.11 points. Furthermore, the BET-TR (total return index, where dividends are automatically reinvested) recorded an even larger 40% growth YoY, reaching 31,745.21 points. Also, during December 2023 alone, both indices recorded solid growth, increasing by 4.5% each, respectively.

In terms of the performance of the Romanian blue chips, out of the 20 companies, 17 recorded positive returns, while 3 recorded negative returns during 2023.

Performance of Romanian blue chips in 2023 (%, YoY)*

Source: Bloomberg, InterCapital Research

*Hidroelectrica’s price change as of listing in July 2023

One company recorded a triple-digit return and 15 companies recorded double-digit returns. Leading the way was TeraPlast at 135.6% higher price YoY, followed by BVB at 85.8%, Sphera Franchise Group at 83.6%, and Purcari, at 68.9%. On the other hand, the “worst” performance was recorded by Fondul Proprietatea, whose price decreased by 74.4% YoY. However, it should be noted that this came as a result of the listing of Hidroelectrica on the exchange by Fondul, after which the proceeds from the IPO were used to pay out dividends, thus reducing the value of the fund and subsequently, its market capitalization. Following Fondul, we have TeraPlast and Medlife, with decreases of 6.4% and 5.8%, respectively.

Performance of Romania blue chips in December 2023 (%, MoM)

Source: Bloomberg, InterCapital Research

In terms of the MoM performance in December 2023, 18 out of 20 companies recorded positive returns. Leading the way in this regard was Sphera Franchise Group, whose share price grew by over 25% MoM, followed by Electrica’s increase of 17.4%, and TeraPlast, at 10%. Most other companies recorded returns of over 2% MoM, with Hidroelectrica recording a slight decrease of 0.5%, and Medlife’s share price declining by 2.7%.

Overall, 2023 was a really good year for the Romanian equity market, supported by the strong performance of various companies in various sectors. This was despite the fact that inflation rates on average were in the double-digit range in Romania during the year and the ever-present threat of escalation of geopolitical tensions related to the war in Ukraine. Given that the inflation has largely subsided by now, and that interest rate cuts are expected in Europe, it isn’t unreasonable to expect the same in Romania, which would also have a positive impact on valuations, and investor sentiment.

According to the latest release by the Croatian Tourism Board, the number of total arrivals in Croatia during January 2024 amounted to 239.5k, representing an increase of 1% YoY, and 11% compared to the same period in 2019. Furthermore, the number of tourist nights amounted to 703.8k, decreasing by 1% YoY, and growing by 18% compared to 2019.

While January 2024 is far from the most important month for Croatian tourism, trends, and developments in the industry should be observed during the entire year. This is especially true in the context of the Croatian Tourism development strategy, which emphasizes diversification of the industry both in terms of a longer time period focus (outside the main tourism season) and geographically, increasing the prevalence of the Continental and other parts of Croatia usually not focused on.

In the latest report by the Croatian Tourism Board, we can see slight changes in this regard and some positive developments. In terms of the total number of tourist arrivals, they amounted to 239.5k, growing by 1% YoY. Of this, foreign arrivals amounted to 122.9k, growing by 3% YoY, while domestic arrivals amounted to 116.6k, declining by 1% YoY. On the other hand, total tourist nights amounted to 703.8k, decreasing by 1% YoY, mainly on the back of lower foreign tourist numbers (-1% YoY), while domestic tourist nights remained roughly the same.

However, if compared to 2019, we do see an improvement, with the total arrivals growing by 11%, supported primarily by a 28% increase in domestic arrivals, while foreign arrivals declined by 1%. On the other hand, total nights grew by 18% compared to 2019, with both foreign and domestic tourist nights increasing, by 20% and 16%, respectively.

Total tourist arrivals and tourist nights in Croatia (January 2019 – January 2024)

Source: HTZ, InterCapital Research

This would mean that the average stay per person amounted to 2.94 nights, decreasing by 2.2% YoY, but growing by 6% compared to January 2019.  Moving on, 92% of the tourist nights were recorded in commercial, while 8% was recorded in non-commercial accommodation. Inside the commercial accommodation category, 59% was made in hotels, 26% in private accommodation, and 3% in camps, while the remaining 12% was made in other types of accommodation.

In terms of tourist nights by their country of origin, 39% were domestic tourists, 8% came from Bosnia and Herzegovina, 7% from Slovenia, and 5% from Germany, Austria and Italy, respectively. The best-performing counties meanwhile, were Istra at 141.3k tourist nights, followed by Grad Zagreb at 135.7k, Kvarner at 123.4k, Splitsko-dalmatinska at 71.4k,  Dubrovačko-neretvanska at 41.6k, and Zadarska at 36.3k.  

As we can see from the data, there have been some positive developments recorded, but the number is still minuscule compared to the scale of the Croatian summer season. While some of the larger tourism companies have started diversifying in the last couple of years towards winter (skiing) tourism, this was predominantly focused on foreign European markets such as Austria. As such, Croatia isn’t seen as an attractive destination during this period, which is also evident from the largest emissive markets during this period, that being domestic, and neighboring countries.