In March 2023, total equity turnover increased 20% MoM, while CROBEX grew slightly by 0.4% during the month, ending at 2,237.43 points.

In March, we have seen more or less a flat movement of CROBEX, noting just a slight increase of 0.4% MoM. The total equity turnover on the exchange, however, is telling its own story. In March 2023, it amounted to a total of EUR 28.1m, which is a decrease of 40% YoY and an increase of 20% MoM. The decrease on a yearly level is evident and further amplified due to exceptionally strong trading in March last year. This month’s block turnover amounted to only EUR 663k, which would mean that the block turnover accounted for only 2.5% of the total equity turnover. In total, only 2 block trades were made during the month, Atlantic Grupa contributing with EUR 349k and Luka Rijeka with EUR 314k. Furthermore, this would also imply an average daily equity turnover of EUR 1.1m.

Turning our attention to the top 10 most traded stocks, in total, they recorded a turnover of EUR 17.8m, accounting for 68.5% of the equity turnover (excl. blocks) during the month. The highest turnover was recorded by SPAN, at EUR 3.4m, or 13.2% of the total, followed by Valamar Riviera, at EUR 2.3m, or 9.2% of the total. ZABA and HT are following the list with 8.7% and 7.3% of total equity turnover, respectively. This would also mean that the top 5 most traded stocks accounted for 45.5% of the total turnover. Overall, we note that Span was the most traded share for two months in a row currently.

Looking at the largest index on ZSE, CROBEX, we note that it recorded just a slight increase of 0.4% during the month, and ended at 2,237.43 points. CROBEX10 also experienced a 0.4% increase and ended at 1,274.87 points.

Performance of CROBEX10 constituents in March 2023 (MoM, %)

Source: ZSE, InterCapital Research

Looking at the CROBEX10, the largest increases were recorded by the most traded share, Span, with its share price double-digit growth amounting to 11.5%. Span is followed by Atlantska Plovidba with 9.3% and Arena Hospitality Group with 8.5%. The positive sentiment continued throughout the whole quarter. The sentiment was driven by warmer-than-expected winter, inflation stabilization, as well as the general macroeconomic outlook being less bleak than it seemed a couple of months ago. However, the recent bank uncertainties with the balance sheets of banks have appeared and shaken the sentiment recovery. You can read it in more detail here. Coming back to the CROBEX however, due to the weights that stocks have in the index, the real drivers of the growth are somewhat different than the top companies by individual performance. CROBEX10, similar to CROBEX, has a relatively similar composition, except it has 10 instead of 15 stocks. As such, its price movements were also under the influence of similar stocks. Consequently, it should not surprise with similar performance.  

At the share price before the announcement, this would amount to a DY of 3.45%, for both the regular and preferred shares. The ex-date is yet to be announced.

Yesterday, the Supervisory Board meeting of Končar D&ST, a subsidiary of Končar was held. Together with the Management Board, the Supervisory Board made the proposal for the distribution of the financial year 2022 profit. Out of the net profit of EUR 22.3m (HRK 167.9m), EUR 2.23m will be transferred into the statutory reserves, EUR 13m will be transferred into the retained earnings, while the remaining amount, EUR 7.03m will be paid out in the form of dividends. This would amount to a payout ratio of 31.5%, and imply a DY of 3.45%, for both the regular and preferred shares.

Končar D&ST further notes that this represents an increase of 50% over the last year’s dividend (EUR 9.19 DPS, HRK 69.2). Neither the ex-date nor the payment date was announced. Below we provide you with the historical dividends per share and dividend yields of the Company.

Končar D&ST dividends per share (EUR) and dividend yield (2015 – 2023, %)

Source: Končar D&ST, InterCapital Research

By the end of February 2023, the NAV of Croatian mutual funds amounted to EUR 2.09bn, representing a decrease of 3.6% MoM, and 17% YoY. This would also mean that compared to its pre-COVID-19 maximum, the NAV is 32.5% lower.

The latest monthly report on the developments recorded by the Croatian capital markets has recently been released by HANFA. In this article, we’ll review Croatian mutual funds, one of the several key players in the Croatian capital market. In February 2023, the NAV of the Croatian mutual funds amounted to EUR 2.09bn, recording a noteworthy decrease of 3.6% MoM, and 17% YoY.

Taking a deeper dive at the changes recorded by the asset holdings of the funds, on a monthly basis, all but 1 of the asset holdings recorded a decrease. The largest absolute decrease was recorded by deposits & cash, which declined by EUR 57.8m, or 16.1%. Following them, we have bond holdings, which decreased by EUR 28.5m, or 2.2%, receivables, which declined by EUR 5.9m, or 56%, and finally, the money market holdings, which declined by 5.2%, or EUR 3.2m. On the other hand, shareholdings increased by EUR 4.4m or 1.5% MoM.

Moving on to the YoY changes, we see a similar story again, with almost all but one asset holdings recording a decrease. The largest absolute decrease was recorded by deposits and cash, whose value declined by EUR 304.1m, or 50.3%, followed by bonds, which lost EUR 171.8m, or 12.1% of their value, and receivables, which lost EUR 46.3m, or 90.9% of its value. Inv. funds and shares also lost some value, at EUR -6.4m, and EUR 1.4m, respectively. On the other hand, the money market holdings increased by EUR 11.4m or 23.9% YoY.

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

Source: HANFA, InterCapital Research

It should be noted that the change in the value of the asset holdings can come from one of several sources: firstly of course, the increase/decrease in value of the underlying assets. Secondly, the decision of the fund managers to reduce their exposure to certain assets and increase it in others. Finally, the net contributions to the funds, which can also be positive or negative. Breaking the last point further, the net contributions into the Croatian mutual funds amounted to EUR -76.6m in February 2023, meaning that more people were redeeming their stakes in the funds than there were investing in them. Breaking this even further, the most significant absolute decrease was recorded by net contributions into the bond funds, which recorded a noteworthy decrease of EUR 72.6m, meaning the majority of people pulling their stakes out of the funds was in the bond holdings.

However, looking at the overall bond holdings change MoM, it declined by “only” EUR 28.5m, meaning that the fund managers did increase their position in bonds during the month, hence the difference.

Moving on to securities and deposits, in total, they amounted to EUR 261.6m in February 2023, representing a decrease of 1.8% (or EUR 4.7m) MoM, and 7.8% (or EUR 22.2m) YoY. Of this, domestic securities and deposits amounted to EUR 129.1m, representing 49.35% of the total, and decreasing by 4.4% MoM, and 25% YoY. On the other hand, foreign securities and deposits accounted for the remaining 50.65% and recorded an increase of 0.89% MoM, and 18.8% YoY.

Finally, taking a look at the current asset structure of the funds, we can see that bond holdings still hold the vast majority, at 59.2% of the total, representing an increase of 1.2 p.p. MoM, and 5.2 p.p. YoY. Following them we have shares, which accounted for 14.6% of the total, an increase of 0.8 p.p. MoM, and 2.9 p.p. YoY, and deposits and cash, which accounted for 14.2% of the total, representing a decrease of 2 p.p. MoM, and 8.7 p.p. YoY.

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

Source: HANFA, InterCapital Research