On a YTD basis, two Slovenian blue chips outperformed SBITOP, while the remaining seven companies underperformed the index, at least in terms of the number of days. In this quick overview, we bring you the details of why this happened. Overall, each SBITOP constituent noted a positive share price development.

On a YTD basis, SBITOP managed to return an impressive 24%, based on the strong performance of many of its constituents. The stars of the show, however, is NLB, followed by  Krka, Petrol and Telekom Slovenije. These companies managed returns of 45.9%, 24.1%, 22.7% and 20.7%, respectively, on a YTD basis. In Q1 2024, most Slovenian blue chips recorded revenue growth. Krka’s revenue grew across all markets with continued demand, NLB’s sales grew due to higher NIM and continued loan growth, while the insurers noted steady top-line growth, mainly driven by Non-life. On the other hand, Petrol recorded a drop in revenue, due to lower prices and volumes sold. In terms of profitability, Krka recorded no FX loss in Q1 and as such results were positive, NLB continued its growth on the back of higher interest rates & volume of loans, while the insurers reported an improved profitability, further amplified by investment returns. Telekom Slovenije also recorded solid profitability, due to sales growth and stable OPEX. On the other hand, Petrol’s profits were affected by lower petrol margins & no compensation for natural gas sold in Croatia and Slovenia.

Price performance of SBITOP and its constituents in 2024 YTD (%)

Source: LJSE, InterCapital Research

How much did individual constituents outperform/underperform compared to the index (2024 YTD, p.p.)

Source: LJSE, InterCapital Research

As compared to the index, NLB outperformed it by 21.9 p.p., followed by Krka at “only” 0.1 p.p. On the other hand, Telekom Slovenije, Sava Re, Luka Koper and few other constituents underperformed the index, however, they still noted a positive share price development. But nevertheless, underperforming the index itself. So far, in 2024 we recorded 119 trading days. Of all the SBITOP constituents, two outperformed the index, while the remaining seven underperformed the index, at least in terms of the working days.

How often did SBITOP constituents outperform the index in 2024 YTD (% of working days)

Source: LJSE, InterCapital Research

Of these companies, Krka outperformed the index 54.6% of the days, followed by Luka Koper at 51.3%. On the flip side, Equinox outperformed the index on only 35.3% of the working days, while both Petrol and Triglav outperformed it on 43.7% of the working days.

As such, looking at this data by itself can be misleading. It should be taken with other indicators, such as the price performance, or any other metric that one investor might be interested in. Still, 9 companies in an index do make things relatively simple. Imagine looking at an index such as the S&P 500, in which most of the companies have such low weights, that even if they gave a 100% return, a tiny increase in the index due to other companies’ performance (usually the largest ones) would still mean that the index would outperform that individual stock.

What can be taken away from this? Two things. Firstly, day-to-day trading, as much as we would like to time it, is quite hard for many different reasons. Of course, a situation might occur when an investor scores a win, but one also has to take into account the higher inherent costs of buying and selling constantly. Secondly, a day always comes when a certain share performs extremely well. While it might happen that an investor times this correctly, without any prior knowledge (which of course, is generally unavailable publicly, or if available, wouldn’t mean much), investing for a longer period in a stable portfolio will generally yield a lot more stable result. After all, a 16.5% SBITOP return (and this is not including the dividends!), turns out a lot better than trying to time the market, both for the sake of time and for the sake of higher costs associated with this action. Not to mention, if a certain share loses a lot of its price due to some development, the risk is diversified far more when investing into an entire portfolio, than an individual stock.

In the latest report on the Croatian tourism performance for May 2024, the total arrivals into Croatia grew by 18% YoY, while total nights increased by 21% YoY. Furthermore, compared to May 2019, total arrivals grew by 23% YoY, while total nights increased by 36% YoY.

May 2024, being the most important month in Croatian tourism pre-season has demonstrated significant improvement. In fact, according to the latest report on Croatian tourism released by the Croatian Tourism Board, HTZ, the total arrivals in May 2024 increased by 18% YoY and amounted to 2m, while total nights grew even more significantly, by 21% to 7.64m. Breaking the arrivals down, total foreign arrivals amounted to 1.72m, growing by 19% YoY, while total nights increased by 12% YoY to 291k.

On the other hand, foreign tourist nights amounted to 6.9m, growing by 23% YoY, while total domestic nights amounted to 712k, increasing by 6% YoY. An increase was also recorded as compared to May 2019, with the total arrivals increasing by 23%, while total nights grew by 36%, supported by higher foreign & domestic arrivals, as well as foreign and domestic nights.

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

Source: HTZ, InterCapital Research

Due to these positive developments, the average stay per person also increased, growing by 2.8% YoY to 3.79 nights per person. In terms of where these tourists stayed, 91% of the tourist nights were recorded in commercial accommodation, 4% in non-commercial, and 5% in nautical accommodation. Inside the commercial accommodation, 38% of tourist nights were recorded in hotels, 27% in private accommodation, 26% in camps, and 9% in other types of accommodation.

The largest share of tourist nights came from Germany, at 28%, followed by Austria at 11%, Croatia (domestic) at 11%, the UK at 6%, and Slovenia as well as Poland, both at 5%, respectively. The most visited counties meanwhile, were Istra at 2.59m tourist nights, Splitsko-dalmatinska at 1.3m, Kvarner at 1.07m, Dubrovačko-neretvanska at 844k, and Zadarska at 812k.

The data demonstrated by the Croatian Tourist Board for Croatian tourism is quite positive. Double-digit growth numbers, especially in the more important pre-season, main season, and post-season months were quite rare last year (an argument could be made that similar growth was recorded in 2022, but that was more of a recovery following the reopening after COVID-19). Furthermore, growth in foreign arrivals and nights is also extremely positive, especially from Germany, Austria, and other similar Central European countries, which were expected to be hit harder by a recession this year and the last, leading to lower budgets for tourists. If a similar trend continues into the main season, 2024 could finally turn out to be a “record” year, after 2019’s strong performance, and several years of either recovery or stagnation (at least in terms of absolute number of arrivals/nights).

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

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