IC Market Espresso 20 Jul 2022

NAV of Croatian Mutual Funds – June 2022

At the end of June 2022, the NAV of Croatian mutual funds decreased by 2.6% MoM, dropping to its lowest level in two years and amounting to HRK 16.7bn. On a YoY basis, this would amount to a decline of 17.5%.

The Croatian Agency for the Supervision of Financial Institutions (HANFA) has published its monthly report on the changes recorded in the financial markets in June 2022. As the Croatian mutual funds have a key role in the Croatian financial market, looking at how they perform over a period of time can give us a glimpse into how well the market is doing as well. The trend, however, is currently not positive. In June 2022, the NAV of Croatian mutual funds decreased to its lowest point since June 2020, and now is equal to HRK 16.7bn, representing a decrease of 2.6% MoM, and 17.5% YoY. If we were to compare it to its pre-COVID-19 maximum, the NAV is even lower, i.e. 27.6% lower than that maximum.

The MoM decrease can be seen across a variety of asset classes with share holdings decreasing the most in absolute terms at HRK 201.8m (or -9.1%), followed by investment funds, which decreased by HRK 100.4m (or -6.3%), bonds, which decreased by HRK 82.8m (or -0.9%) and money market, which decreased by HRK 50.2m (or -15.1%). The only asset class to see an increase on an MoM basis were receivables, which grew by HRK 22.8m (or 52.1%).

Looking at the YoY basis, the NAV decreased significantly, by 17.5%. Broken down into asset classes, bonds are the main decliners, losing HRK 2.1bn (or -18.7%) of their value followed by deposits and cash which lost HRK 1.4bn (or -25.7%) in value. Next on the list of declining assets, we have shares which decreased by HRK 186.1m (or -8.4%), and the money market which decreased by HRK 181.4m (or -39.1%). Unlike the MoM data, the only asset class to rise in value in June on a YoY basis is investment fund holdings with an increase of HRK 369.6m (or 32.9%).

As Russia’s aggression towards Ukraine continues to weigh on the European economies (and beyond), and the list of subsequent sanctions on Russia growing ever larger, the current sentiment on the market is not so positive. Considering this is only one of the variables, as inflation is spreading through all the sectors of the economy, there is an expectation of the ECB raising key interest rates like the Fed did (although not so aggressive or as high), which again, has negative consequences on the equity markets. Considering these trends are unlikely to change in the coming months (and most probably, going to get worse as there is a potential of a complete gas export stoppage from Russia), the current sentiment on the markets is expected.

Meanwhile, looking over to securities and deposits, both domestic and foreign securities and deposits decreased in June. Domestic securities and deposits decreased by 1.08% (or HRK -97.1m in absolute terms), while foreign decreased by 5.89% (or HRK -346.3m). We can see a greater drop on a YoY basis with domestic securities decreasing by 14.5% (or HRK -1.5bn) and foreign losing 14.6% (or HRK -942m).

If we were to go over the data on the asset structure of Croatian mutual funds, bonds still make up the largest proportion of the total assets with 54.1% share (or HRK 9.31bn) in the total assets. This represents a slight increase on an MoM basis (0.9 p.p.), but a slight decrease on a YoY basis (-0.7 p.p.). Following them, we have deposits and cash with 23.4%, an increase of 0.5 p.p. MoM, and a decrease of 2.5 p.p. YoY. The third largest asset holding, shares have an 11.8% of the total assets, representing a decrease of 0.9 p.p. MoM, but 1.2 p.p. increase YoY.

Croatian mutual funds AUM structure (June 2022, %)

If we looked at investments into equity in these funds by themselves, 29% of the amount is invested into domestic equity. This represents a 1.08% MoM decrease and a 14% YoY decrease. The other 71% is invested in foreign equity which represents a decrease of 3% MoM and 28% YoY. Finally, net contributions to mutual funds in June 2022 decreased by HRK 74.4m, meaning the decrease in the NAV of Croatian mutual funds can be attributed to both the loss of value of assets due to current uncertainty and volatility in the world and to redemptions of fund shares.

Total assets of all Croatian UCITS funds (2015 – June 2022, EURm)

Krka Went Ex-date

Yesterday, Krka’s shares went ex-date. After the market’s closing, the stock decreased by 5.24%, which is slightly lower than the 5.85% DY.

This refers to the previously approved dividend of EUR 5.63 per share or a dividend yield of 5.85%. When the market closed, the stock declined by 5.24%, a similar level to the dividend yield.

As a reminder, Krka recently published their Q2 2022 result estimates, according to which, they expect a sales revenue of EUR 853.4m, an increase of 6% YoY. At the same time, their estimated EBITDA decreased by 25%, while the net profit amounted to EUR 236.2m, an increase of 33% YoY. If you would like to read more about this news, click here.

In general, Krka has app. 33% of their total sales in Region East Europe, of which Russia is the largest market, thus the Company has been directly affected by the current Russia-Ukraine conflict. To put things into perspective, since the beginning of the year, the stock declined by 20.34%, of which the decline after the ex-date amounted to 5.24%.

Krka is going to publish their Q2 2022 results on 21 July 2022, in which more information will be provided. Below we provide you with a historical overview of the Company’s dividends per share and dividend yields.

Krka dividend per share (EUR) & dividend yield (%) (2009 – 2022)

Upcoming Events – July 2022

Here you can find the dates for the upcoming events of the regional companies.

wdt_ID Date Ticker Announcement Country
10 22.7.2022 ERNT Ericsson NT Q2 2022 Results Croatia
11 22.7.2022 PODR Podravka Q2 2022 Results Croatia
12 25.7.2022 TRP Teraplast Q2 2022 Results Romania
13 25.7.2022 ATPL Atlantska Plovidba Audit Committee Meeting Croatia
14 26.7.2022 TRP Teraplast Q2 2022 Results Conference call Romania
15 26.7.2022 ATPL Atlantska Plovidba Board of Directors Meeting Croatia
16 27.7.2022 ADPL AD Plastik Q2 2022 Results Croatia
17 27.7.2022 ARNT Arena Hospitality Group Supervisory Board Meeting Croatia
18 28.7.2022 KOEI Končar Q2 2022 Results Croatia
19 28.7.2022 HT HT Q2 2022 Results, Investor & Analyst Conference Call Croatia
20 28.7.2022 ATGR Atlantic Grupa Q2 2022 Results Croatia
21 28.7.2022 SNP OMV Petrom Q2 2022 Results Romania
22 28.7.2022 SNP OMV Petrom conference Call - Q2 2022 Results Romania
23 28.7.2022 ARNT Arena Hospitality Group Q2 2022 Results Croatia
24 28.7.2022 DIGI Digi update of the 2021 Annual report Romania
25 29.7.2022 TLSG Telekom Slovenije Ex-dividend date Slovenia
26 29.7.2022 ATPL Atlantska Plovidba Q2 2022 Results Croatia
27 29.7.2022 RIVP Valamar Riviera Q2 2022 Results Croatia

Due to the nature of these events, they are subject to change (might be postponed or canceled).