During 2023, two Slovenian blue chips outperformed SBITOP, two matched the index, while the remaining five companies underperformed the index, at least in terms of the number of days. Today we bring you a detailed overview of why this happened, but also why looking at this data by itself does not tell the entire picture.
2023 turned out to be a solid year for the SBITOP index overall, with an overall increase of 19.8% during the year. Of all the constituents, seven recorded solid growth, one remained roughly unchanged, while one recorded a decrease.
Price performance of SBITOP and its constituents in 2023 (%)
Source: LJSE, InterCapital Research
Leading the way in this regard was NLB at 36%, followed by Luka Koper at 30%, Telekom Slovenije at 28%, Sava Re, at 25%, and Krka, at 20%. On the other hand, Cinkarna Celje declined by 11%, while Triglav remained roughly unchanged.
How much did individual constituents outperform/underperform compared to the index (2023, p.p.)
Source: LJSE, InterCapital Research
As compared to the index, NLB outperformed it by 16.4 p.p., followed by Luka Koper at 10.4 p.p., Telekom Slovenije at 8.4 p.p., and Sava Re at 5.2 p.p. On the other hand, Cinkarna Celje, Triglav, and Equinox underperformed the index, by 30.7 p.p., 19.2 p.p., and 14.8 p.p., respectively. In total, 2023 recorded 249 trading days in 2023. Of all the SBITOP constituents, two outperformed the index, two matched it, while five underperformed the index, at least in terms of the working days.
How often did SBITOP constituents outperform the index in 2023 (% of working days)
Source: LJSE, InterCapital Research
Of these companies, NLB outperformed the index 52% of the days, followed by Telekom Slovenije at 51%, while Cinkarna Celje and Krka matched it 50% of the time. On the flip side, Equinox outperformed the index on only 46% of the working days, while Luka Koper and Triglav outperformed in on 47% of the working days.
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 20% 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.
Throughout 2023, passenger car registration in the EU increased by 13.9% YoY, totaling 10.5m units. All EU markets grew during 2023, with Hungary being the only exception. The largest markets, Italy, Spain, and France all noted a solid double-digit growth. Germany was influenced by weak year-end resulting in single-digit growth. In Croatia, Slovenia & Romania, in the mentioned period, passenger car registration reported an increase of 31%, 5.3% and 11.8% YoY, respectively.
New total car registration per month
Source: ACEA, InterCapital Research
In 2023, new passenger car registration in the EU increased by solid double-digit increase of 13.9% compared to 2022, totaling 10.5m units. All large markets reported a positive development. Italy, Spain, and France noted a double-digit growth, while Germany reported a single-digit development of 7.3% due to a weaker November & December, pacing down the growth. The largest increase reported in the EU in 2023 was in Italy, where the absolute increase amounted to 248km units, representing an increase of as much as an 18.9% YoY increase. Italy is closely followed by France at 246k units (16.1% YoY). Next up is Germany where the increase was 193k (7.3% YoY), which, as aforementioned, reported much lower growth during November & December. Finally, the last remaining major region within the EU, Spain, reported a strong increase of 136k (+ 16.7% YoY). The growth trend in Spain also paced down by the end of the year. Looking at the development in the region in 2023, Croatia reported a strong recovery with a growth of 31.3% YoY, while Slovenia remained relatively flat with 5.3% YoY growth during 2023. Romania noted a solid 11.8% growth during 2023. The last thing to emphasize is that Hungary is the only country to report a negative development in passenger car registration in 2023 with a 3.4% decline.
New car registration by power source (January – December 2023)
Source: ACEA, InterCapital Research
Categorization by power course
Petrol car market share still represents the biggest part of the pia with 35.3% (market share only down 1.1 p.p.), while the Diesel market share shrank slightly more pronounced by 2.8 p.p. to 13.6%. The decline continued its downward trajectory in the last month of 2023 in several key markets, including the biggest three: Spain (-26.5%), France (-22.2%) and Italy (-19.7%). In December 2023, new battery-electric car sales declined for the first time since April 2020 (when was the pandemic peak). The decrease can mainly be attributed to a significant downturn in Germany (down 47.6%), represents the largest market for this power source. The battery-electric car market share increased by 2.5 p.p. and reached 14.6% in 2023. Hybrid-electric cars surged during the year, resulting in over 2.7m units sold in 2023, and achieved more than a quarter of the whole EU market share with 25.8% market share (++3.1 p.p.). In contrast, sales of plug-in hybrid electric cars ended the year on a downward trend. As a result, the EU plug-in hybrid electric car market decreased by 7% compared to 2022 and now represents a 7.7% market share.