Since the beginning of 2022, 4 out of 10 CROBEX10 constituents outperformed the index more than 50% of the time.

Today, we decided to bring you an overview of how well the CROBEX10 constituents as well as the index itself perform thus far in 2022, as well as how often the constituents outperformed or underperformed compared to the index. It should be noted that looking at just the percentage of days that individual companies outperformed the index might not tell a full story, as on some days they might underperform/outperform by a larger percentage than others. Still, this can be used to gauge the general trend of the performance.

How often did CROBEX10 constituents outperform the index (%)

Since the beginning of 2022, 4 out of 10 CROBEX10 constituents performed better than the index more than 50% of the time. These include the following companies: Adris (pref.), which outperformed the index 55.6% of the days, Atlantska Plovidba and Valamar Riviera, which both outperformed the index 52.8% of the days, and Atlantic Grupa, which outperformed the index 51.4% of the days. On the flip side, Podravka outperformed the index only 37.5% of the days, followed by Ericsson NT with 40.3%, and HT and Arena Hospitality Group, with 45.8% each, respectively.

Now the question is, how does this correlate to CROBEX10, as well as the performance of the individual constituents in the period? As we mentioned, just because some companies outperformed/underperformed compared to the index, as a percentage of days, does not mean that they did worse in terms of returns to investors. Take several examples: AD Plastik, which outperformed the index only 47.2% of the days, had a decline of -39.8% over the period. On the flip side, Atlantska Plovidba, which outperformed the index 52.8% of the time, gave a return of 20%. So far, makes sense. But if we were to take some other companies, we can see that the correlation between outperformance/underperformance is not that strong, but more of a general „direction“ (be it negative or positive) that the company might go to. Ericsson NT, which outperformed the index by only 40.3% of the days, gave a return of 1.3%. HT, which outperformed the index 45.8% of the time, gave a return of 2.7%. Even ADRS (pref.), which outperformed the most in terms of days, gave a return of only 2.6%. Podravka, which performed the worst in terms of days, declined by -7.3%. Meanwhile, the index itself gave a return of -1.4% in this period.

Performance of CROBEX10 and its constituents, YTD (%)

What can be taken from this is that factors outside trading amount or day-to-day performance play a significant role in the performance of individual companies. AD Plastik, which declined the most can attribute that decline to the fact that the company has significant operations in Russia, a country that was severely affected by the sanctions after the invasion of Ukraine. On the other hand, Atlantska Plovidba, which posted solid results, gave a good return in this period.

The growth in CPI was driven by transport prices, which grew by 14.4%, and Food and non-alcoholic beverages, which grew by 10.8%.

The Croatian Bureau of Statistics has released its monthly report on the developments of the CPI (Consumer price indices) in March 2022. On an MoM basis, the prices of goods and services for personal consumption, measured by the consumer price index, increased by 2.1% on average. Compared to March 2021, that is, at the annual level, they increased by 7.3% on average, while on the annual average they increased by 4.1%. The 7.3% increase marks the highest inflation recorded in Croatia since August 2008 and the Global Financial Crisis.

CPI (January 2013 – March 2022, %)

Furthermore, when we take a look at the annual level, the highest increase on average was recorded in the following divisions: Transport, which grew by 14.4%, Food and non-alcoholic beverages, which grew by 10.8%, Furnishings, household equipment and routine household maintenance, which grew by 8.4%, Restaurants and hotels, which increased by 7.9%, Clothing and footwear, which grew by 5.2%. The remaining categories all grew by less than 5% but more than 3%, marking a significant turn compared to previous months when CPI was driven by mainly increases in transport and food prices.

CPI change by categories – March 2022 (%)

Looking over to select groups, Goods increased by 8.9% YoY, Services grew by 2.6% YoY. The total increase without energy was 6.1%, while without energy and food it was 4.1%. Energy by itself grew by 13.3% YoY, Food, beverages and tobacco grew by 9.2%, Good without food, beverages and tobacco grew by 8.7%, and Unprocessed food increased by 9.5%, while Processed food increased by 9% YoY.

What is quite evident in this month’s CPI movements is just how impactful the energy and food prices are to the increase. This can be attributed to two factors: The Russian invasion of Ukraine, and the subsequent sanctions on Russia which increased energy and food prices, but also the inflation rate that was already present in the last couple of months, which was exacerbated by the invasion.