IC Market Espresso 27 Jun 2023

NAV of Croatian Mutual Funds Decreased by 12% YoY in May 2023

At the end of May 2023, the total NAV of Croatian mutual funds amounted to EUR 1.99bn, a decrease of 12% YoY, but an increase of 1.1% MoM.

HANFA recently released its most recent monthly report on the changes observed in the Croatian capital markets. This summary provides the latest data concerning Croatian mutual funds. As of the end of May 2023, the net asset value (NAV) of all Croatian mutual funds reached EUR 1.99bn, increasing by 1.1% MoM, but still declining by 12% YoY. It should be noted that this marks the 1st MoM increase in the NAV since January.

Looking at the asset holdings of the funds, on a YoY basis, most of the mutual fund categories experienced a decline. The largest decrease occurred in deposits and cash, which decreased by 51.6%, or EUR 277.1m. Following them, we have bond holdings, which decreased by EUR 50.7m, or 4.1%. Even though less substantial, money market holdings as well as investment funds declined, decreasing by EUR 7.5m (or 17%), and EUR 3.5m (or 1.6%), respectively. On the other hand, shares experienced a YoY increase, growing by EUR 12.7m (or 4.3%).

Turning our attention to the MoM basis, here we can see that the largest increase was recorded by deposits and cash holdings, which grew by EUR 10m (or 4%), closely followed by bond holdings, which increased by EUR 9.9m, or 0.8%. Shares also recorded an increase, albeit a smaller one of EUR 1.2m, or 0.4%. On the flip side, money market holdings decreased by EUR 1.6m or 4.3%.

Total assets of Croatian mutual funds (2015 – May 2023, EURm)

Source: HANFA, InterCapital Research

Regarding net contributions to the funds, May 2023 witnessed an increase of EUR 11.2m. However, upon closer analysis, most fund types experienced more redemptions than contributions, with bond funds recording redemptions of EUR 44.6m, followed by balanced funds at EUR 4.4m. Conversely, equity funds demonstrated a EUR 3.1m increase, while the primary driver of overall growth was the Other funds’ category, which experienced an increase of EUR 26.7m.

In terms of securities and deposits, in total they amounted to EUR 1.9bn in May 2023, representing an MoM increase of EUR 40.7m, (or 2.2%), but a YoY decrease of EUR 53.3m (or 2.7%). Of this, domestic securities and deposits amounted to EUR 824m, an increase of EUR 12.6m (or 1.6%) MoM, but a decrease of EUR 374m (or 31.2%) YoY. On the other hand, foreign securities and deposits amounted to EUR 1.1bn, representing an increase of 2.6% (or EUR 28.1m) MoM, and EUR 320.8m (or 41%) YoY.

Lastly, taking a look at the current asset structure of the mutual funds, In May 2023, bond holdings still held the vast majority of total assets at 59.3%, a decrease of 0.1 p.p. MoM, but an increase of 6 p.p. YoY. Following them we have share holdings, which accounted for 15.3% of the total, a decrease of 0.1 p.p. MoM, but an increase of 2.7 p.p. YoY, and finally, deposits and cash, which accounted for 12.9% of the total, an increase of 0.4 p.p. MoM, but a decrease of 10 p.p. YoY.

Current AUM of Croatian mutual funds (May 2023, % of the total)

Source: HANFA, InterCapital Research

BVB Trading Activity – April 2023

By the end of May 2023, BET slightly decreased by 0.3% MoM, amounting to 12,229.51 points. Looking at the latest price developments, compared to the start of the year, the index grew by 2.7%.

The Bucharest Stock Exchange has published the latest trading activity report, for May 2023. Regarding the highlights, the Stock Exchange notes that all of the indices were in the positive territory, with BET-TR (total return) index increasing by 7.2% YTD, while the energy and utilities index, BET-NG, increased by 10.7%. In terms of the main index on the exchange, BET, it grew by 2.7% since the start of the year looking at the latest price developments. However, during May the index decreased slightly by 0.3%.

BVB also noted that after 14 consecutive quarters of growth, a new high was reached in terms of the number of investors in the capital market with more than 140,000 investors present on BVB. Also, the total trading value with all types of instruments of RON 7.5bn fell on a YoY level as investors are waiting for the listing of Hidroelectrica!

BVB CEO states that the IPO of Hidroelectrica will be the most imporant event in the coming period for Romania from an economic point of view. With the successful completion of the largest IPO ever made in Romania, important implications should be achieved with Romania gaining Emerging Market status by MSCI.

During the extraordinary Index Committee meeting within the Bucharest Stock Exchange, which took place on May 12, 2023, decisions were approved regarding the inclusion of Hidroelectrica’s shares in the BVB’s indices starting with the first trading day of the company’s shares.

In terms of equity turnover, it recorded a significant MoM growth of 53.3%, amounting to RON 697m. Meanwhile, on a YoY basis, it just slightly increased. Finally, during May 2023, 22 working days were recorded, which would mean that the average daily turnover amounted to RON 31.7m.

Performance of BET constituents in April 2023 (MoM, %)

Source: Bloomberg, InterCapital Research

In terms of the performance of the BET constituents, the largest increase on an MoM basis was recorded by One United Properties, whose share grew by as much 15.9%, followed by Nuclearelectrica also with double-digit growth of 12.3%. Sphera Franchise Group is to follow at 7.6% growth, Romgaz at 4.6%, Transport Trade Services at 3.8%, Aquila at 1.7%, and Transelectrica at 0.4%. On the flip side, the largest decrease was recorded by Transgaz, which lost 26.8% of its value, followed by Conpet at 8.4%, and Teraplast at 4.5%. In total, 8 index constituents recorded positive returns in May, while the rest of them noted negative price development.

YTD performance of BET constituents in 2023 (%)

Source: Bloomberg, InterCapital Research

On a YTD basis, the story is more positive. A good few number of BET constituents noted a strong double-digit growth. The largest increase was recorded by BVB, whose share increased by 35.4%, followed by Sphera Franchise Group at 26.4%, Transport Trade Services at 25.7%, Aquila at 23.2% and Purcari at 20.8%. In total, almost half of the index constituents recorded >10% returns in this period, while the biggest recorded decline was recorded for Teraplast with 8.4% share price decline.

Upcoming Events – June 2023

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

wdt_ID Date Ticker Announcement Country
23 28.6.2023 TLSG Telekom Slovenije ex-date Slovenia
24 30.6.2023 TTS Transport Trade Services 2022 ESG Report Romania

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

*Ex-dates present here also include companies that haven’t yet held the GSM meeting, and thus the approvals haven’t been made yet.