As July is coming to an end soon, and the summer season is here & vacation time is approaching, we decided to provide you with a brief overview of the Croatian & Slovenian equity market’s performance since the start of this year.
So far, 2024 has seen positive movements in global capital markets, continuing the optimistic sentiment from 2023. Better-than-expected macroeconomic developments eased recession fears. During July, both the S&P 500 and NASDAQ had reached new ATH. Anticipation of central bank interest rate cuts bolstered this bullish sentiment. While the ECB did cut rates in June, further cuts are now less certain. The FED, however, has yet to make the anticipated cuts, with hopes now pinned on their September meeting. Despite this, market sentiment remains strong, evidenced by the S&P 500 and NASDAQ recording YTD returns of 17.7% and 22.6%, respectively. Both Croatian & Slovenian followed the same positive development on the back of the sentiment driven by strong macro data.
YTD performance of selected indices
Source: InterCapital Research, Bloomberg
The positive trends in global equities spilled over into regional markets, resulting in double-digit returns on the ZSE and LJSE. Notably, the Slovenian SBITOP index outperformed with a 31% YTD return, surpassing even NASDAQ’s performance. The CROBEX10 had a YTD return of 11.2%, slightly lower compared to DAX.
YTD performance of CROBEX10 constituents
Source: InterCapital Research, Bloomberg
Among the CROBEX10 constituents, Končar, HPB, and Valamar Riviera were the clear winners. Končar’s share price surged by 43.3% YTD, followed by HPB with a 29.4% increase. Valamar Riviera also saw a respectable 9.3% increase. Conversely, Atlantska Plovidba experienced the biggest decline at 7.5%, followed by Ericsson NT and Atlantic Grupa with 3.5% and 2.7%, respectively.
Končar’s growth was driven by a 22.5% YoY increase in sales revenue in Q1, with the distribution segment reaching record levels, earning 71% of revenue. This resulted in a record-high EBITDA margin of 16.6% and tripled net income compared to Q1 2023. HPB’s share price increase followed impressive Q1 results, with a 69% YoY increase in operating revenue, leading to a 111% increase in EBIT and a 32.7% rise in net income, marking the highest quarterly net income of EUR 32.7m.
5 most liquid stocks on ZSE during the first six months [EURm, block trades included]
Source: InterCapital Research, ZSE
In terms of equity turnover (including blocks), the top five traded companies on ZSE accounted for 37.7% of total turnover in the first six months. Valamar Riviera recorded the highest turnover at 7.8%, followed closely by Ericsson NT and Hrvatski Telekom, each capturing 7.7%. Total equity turnover increased by c. 50% compared to H1 2023.
YTD Performance of SBITOP constituents
Source: InterCapital Research, LJSE
On the LJSE, NLB, Krka, and Petrol were the top performers. NLB’s share price appreciated by 54% YTD, Krka saw a 33.6% increase, and Petrol recorded a 31.8% rise. All SBITOP constituents had positive performances in the first half of 2024, with the lowest YTD increases by Zavarovalnica Triglav and Equinox at 5.8% and 8.6%, respectively.
NLB’s strong performance was attributed to a high-interest rate environment and a 6% YoY increase in loans issued in Q1, resulting in a 23% increase in sales revenue and a 17% rise in net income compared to Q1 2023. This, along with the company’s new 2030 business strategy, supported its strong growth. Krka’s growth was driven by continued demand and revenue growth across all markets in Q1.
5 most liquid stocks on LJSE during the first six months [EURm, block trades included]
Source: InterCapital Research, LJSE
The top five traded companies on LJSE accounted for 86.7% of total turnover in the first six months. Krka led with 35.3% of total equity turnover, followed by NLB with 32.7%. Cinkarna Celje, despite not being in the top three in YTD performance, had the third-highest turnover at 6.9%, followed by Petrol at 6.5%. LJSE saw a 47% increase in total equity turnover compared to the same period in 2023, amounting to EUR 43.1m more in absolute terms than ZSE.
The 2024 YTD was marked by significant growth and strong performances across both global and regional markets. As we move into the second half of the year, the continued positive sentiment and macroeconomic conditions will be key factors to watch.
Today, we are bringing you a quick overview of the bid/ask spread of the Croatian and Slovenian blue chips in 2024 YTD.
First of all, a reminder: what is a bid/ask spread? In the context of a stock exchange, a bid/ask spread represents the difference between the highest price a buyer is willing to pay and the lowest price that a seller is willing to accept, for any share in question. In other words, the bid/ask spread represents the transaction cost for any given trade. As such, the lower the bid/ask spread, the more attractive a share could be for trading. Several things influence the bid/ask spread. Firstly, of course, the liquidity of a given share. Liquidity is tied to both the size of the share’s free float, the attractiveness of the share at any given moment, and the size of the overall stock market, among other things.
As such, the more liquid a share is, the more investors will trade it, and subsequently, the lower the bid/ask spread will be. The opposite is also true; illiquid and small shares usually have large bid/ask spreads, which in turn makes them even less attractive to investors, which creates a self-fulfilling circle. Secondly, the influence of a market maker. In short, a market maker puts a large enough amount of shares, available for trading by all investors on both the bid and ask side of the trading on an exchange, for a certain fee. Due to this, companies with market makers, even ones that are smaller and less interesting to investors can reduce their bid/ask significantly, thus making them more attractive in turn.
Croatia
Starting with the Croatian blue chips, the Croatian blue chips retained relatively small bid/ask spreads in 2024. Oscillations on certain days did happen when major news broke out, but on average the spread was quite small.
Average bid/ask spread of Croatian blue chips in 2024 YTD (%)
Source: Bloomberg, InterCapital Research
Out of the observed companies, Atlantska Plovidba recorded the largest average bid/ask spread at 2.6%, while the maximum was 16.2%. The company’s stock price experienced significant volatility and recorded a decrease of 7.5% YTD. This large bid/ask spread implies low liquidity, which can often be attributed to poor company fundamentals and adverse market conditions.
The next highest average bid/ask spread of 1.7% is recorded in Atlantic Grupa and HPB. Atlantic Grupa was trading at higher prices per share during the year, but since the end of March, the stock has been on a downward trend and currently stands at 0% YTD. Similar to the previous year, the stock experienced significant volatility, which is reflected in the spreads ranging between -0.9% and 3.8%. Regarding HPB, its spreads ranged between -1.1% and 4.6%. Despite this volatility, HPB continued its strong performance from the previous year and has achieved a 33.7% YTD return.
The rest of the observed companies had bid/ask spreads of 1% or lower, with Valamar Riviera recording the lowest spread at 0.4%. This indicates that Valamar Riviera has the highest liquidity among the companies observed. According to the ZSE’s report, Valamar had the highest turnover in the first half of the year. The company accounted for 7.8% of total equity turnover and achieved a 13.6% YTD increase.
Slovenia
Moving on to Slovenia, out of the 9 blue chips, 3 had average bid/ask spreads higher than 1%.
Average bid/ask spread of Slovenian blue chips in 2024 YTD (%)
Source: Bloomberg, InterCapital Research
Leading the way with the largest bid/ask spread is Equinox, at 5.6%. As the newest addition to the SBITOP index, Equinox is also the smallest company in terms of market size compared to its peers. Despite an 8.6% YTD increase in share price, the stock has exhibited significant volatility.
Next up are Luka Koper and Telekom Slovenije, both of which recorded solid double-digit growth with 25.7% and 24.8% YTD increases, respectively. The solid liquidity of both companies is evident. Despite Luka Koper not having a dedicated market maker and Telekom Slovenije having one, their average bid/ask spreads were quite similar, reflecting their strong market performance and investor interest.
Of the remaining Slovenian blue chips, all had a bid/ask spread of less than 1%. Given the overall size of the Slovenian market and the limited number of available shares for trading, a significant amount of trading is concentrated in these stocks, particularly in Krka, NLB, and Petrol. The other blue chips—Triglav, Sava Re, and Cinkarna Celje—also recorded solid liquidity in 2024. The presence of market makers plays a crucial role in their trading; even with high liquidity, it is unlikely that the spreads would be as small as they are without their support.
Here you can find the dates for the upcoming events of the regional companies.
| wdt_ID | Date | Ticker | Announcement | Country |
|---|---|---|---|---|
| 17 | 26.7.2024 | WINE | Purcari ex-dividend date | Romania |
| 19 | 26.7.2024 | KOEI | Končar Q2 2024 Results | Croatia |
| 20 | 26.7.2024 | ADPL | AD Plastik Q2 2024 Results | Croatia |
| 21 | 26.7.2024 | EQNX | Equinox Q2 2024 Results | Slovenia |
| 22 | 29.7.2024 | HPB | HPB Q2 2024 Results | Croatia |
| 23 | 29.7.2024 | ARNT | Arena Hospitality Group Supervisory Board Meeting | Croatia |
| 24 | 30.7.2024 | ATPL | Atlantska Plovidba Audit Committee Meeting | Croatia |
| 25 | 30.7.2024 | ARNT | Arena Hospitality Group Q2 2024 Results | Croatia |
| 26 | 31.7.2024 | PETG | Petrol ex-dividend date | Slovenia |
| 27 | 31.7.2024 | SPAN | SPAN Q2 2024 Results | Croatia |
| 28 | 31.7.2024 | ATPL | Atlantska Plovidba General Assembly Meeting | Croatia |
| 29 | 31.7.2024 | ATPL | Atlantska Plovidba Q2 2024 Results | Croatia |
| 30 | 31.7.2024 | RIVP | Valamar Riviera Q2 2024 Results | Croatia |
| 31 | 31.7.2024 | SNP | OMV Petrom Q2 2024 Results | Romania |
| 32 | 31.7.2024 | TRP | TeraPlast Q2 2024 Results | Romania |
Due to the nature of these events, they are subject to change (might be postponed or canceled).