The S&P 500 dropped 3.51%, pulling away from record highs, which came on the back of yesterday’s poor share price performance of Tech companies.

Yesterday, US equities have observed a solid drop, which is the most in almost three months. The S&P 500 dropped 3.51%, pulling away from record highs, which came on the back of yesterday’s poor share price performance of Tech companies. To be specific, Apple dropped by 8.01%, Microsoft by 6.19%, Amazon by 4.63% and Facebook by 3.76%. Despite yesterday’s decrease S&P 500 is still up by 6.94% YTD.

Meanwhile Nasdaq 100 sank 5%, its largest decline since March. It also worth noting that Tesla, whose share price skyrocketed this year, dropped by 9.02% yesterday.

As a result of the above-mentioned VIX soared to 33.6, representing a daily increase of 26.5%. The “fear” index was last time seen at such figure in mid July.

Yesterday’s decrease could arguably be attributed to investors questioning the sustainability of such elevated tech valuations, as the pandemic continues. It seems too soon to conclude whether this could be seen as a the beginning of a more significant decline for big tech companies. We will be monitoring the markets closely, to see whether yesterday’s trading will have any spillover effect on today’s trading of the regional markets.

For today we decided to look at EBITDA and net profit margins of Slovenian blue chips.

For this we used H1 2020 results. Note that financials (NLB, Triglav and Sava Re) were excluded from the analysis.

It is important to note once again that comparing the margins across the selected companies is not necessarily the best way to do the comparison as many companies operate in different industries. Since both EBITDA and profit margin reflect to a great extent the industry in which the company operates in, we advise to compare it to the peer average or median. Nevertheless, it is still worth seeing which Slovenian companies are more profitable and therefore have more “room” to potentially reduce the prices of their goods or services if needed, while still remaining a higher level of profitability.

As visible from the graph, 4 out of 5 observed companies have a double-digit EBITDA margin, with Krka leading the list (34%). Next comes Telekom Slovenije with 32.1%. Such results are expected given that Pharma companies and Telecoms tend to have a relatively high EBITDA margin. On the flip side, Petrol operates with a H1 EBITDA margin of 5.1%.

When looking at the profit margins, Krka operates with the highest margin (19.9%), while Petrol has the lowest profit margin of 2.4%.

For today we decided to present you with a YTD share price peformance of listed European football clubs.

Football enthusiasts have recently witnessed Bayern München lift the Champions League trophy for the 6^th time in the club’s history. There is no doubt that this year’s Champions League will go down in history books as one of the most unique tournaments played, as the ending of the tournament was played with no supporters on sight and only one game being played in the knock-off round. It is obvious that Covid-19 pandemic has taken a toll on football clubs as well, so for today we decided to look at the YTD share price performance of listed European football clubs.

Back in the 1990s when competition prizes, sponsorship and TV rights were not as lucrative as today, many clubs decided to raise capital through an IPO in order to secure the funds need to purchase the best players and finance future results. European football clubs that decided to offer their shares to investors can be found in the STOXX FCTP index.

The ongoing situation has already negatively affected football clubs in many ways, such as the ticket sales and broadcasting revenues as well as compensations received from UEFA. As a result, just like many global indices, FTCP observed a double-digit decrease on a YTD basis, -14% to be exact.

In the graph below, you can see the performance of certain FTCP index constituents with the addition of Manchester United, which show mixed results. As visible from the graph, on the gainers side one can notice that 4 out of top 5 are Turkish clubs, with Trabzonspor leading the list (+144.19% YTD). On the flip side, 10 clubs have witnessed a double-digit decrease, with Roma leading the losers (-54.6%).

YTD Share Price Performance of Selected European Football Clubs (%)