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, with only Equinox being an exception with flat return during this year, so far.

On a YTD basis, SBITOP managed to return an already impressive 16.5%, based on the strong performance of many of its constituents. The stars of the show, however, are NLB, Krka and Petrol. These companies managed returns of 29.4%, 16.8% and 16.7%, respectively, on a YTD basis. Recently, Slovenian blue chips published 2023 Q4 results (and FY overall). During 2023, most of the Slovenian blue chips recorded revenue growth, with NLB recording growth due to higher NIM and loan production, while Krka also recorded growth across all markets. Triglav and Sava Re recorded higher business volume (new indicator for top-line). On the other hand, Petrol recorded a 26% decline in sales due to lower prices and lower volumes sold, albeit record sales were recorded in 2022 due to the price caps. However, the market is pricing a steady recovery of Petrol.

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 12.7 p.p., followed by Krka at “only” 0.3 p.p. and Petrol at 0.2 p.p. On the other hand, Telekom Slovenije, Sava Re, Luka Koper and few other underperformed the index, however, still noting a positive share price development. But nevertheless, underperforming the index itself. So far, in 2024 we recorded 59 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 54.2% of the days, followed by Telekom Slovenije at 50.2%. On the flip side, Equinox outperformed the index on only 33.9% of the working days, while both Sava Re and Triglav outperformed it on 40.7% 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 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.

At the share price before the announcement, this would imply a DY of 11.8%. The ex-date is set for 16 May 2024, while the payment date is set for 7 June 2024.

Fondul Proprietatea published the OGSM call recently, which will be held on 30 April 2024. In the call, the proposal for the distribution of profit was made in the form of dividends. Accordingly, a gross dividend of RON 0.06 DPS was proposed, to be paid out from retained earnings. At the share price before the announcement, this would imply a DY of 11.8%.

Of course, the dividend proposal is subject to approval at the aforementioned OGSM, to be held on 30 April 2024. The ex-date for the dividend is set for 16 May 2024, while the payment date is set for 7 June 2024. Below, we provide you with the historical dividends per share and dividend yields of the Fund.

Fondul Proprietatea dividends per share (RON, left), dividend yields (%, right) (2018 – 2024)

Source: Fondul Proprietatea, InterCapital Research

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).