SEE equities

Equities in SEE mixed as tensions don’t abate



The trading week at the bourses of South East Europe ended with mixed results amid lingering concerns over the situation in Ukraine. Investors appeared reserved about what the weekend may bring after a series of cease-fire violations in the eastern part of the country. Stocks in Zagreb led the losses in the region.

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Greek stocks as measured by the Athens Exchange (ATHEX) general index returned -1.56% this week. The Greek state budget deficit shrank to €1.196 billion euros last month from a budget target for a shortfall of €2.243 billion and a deficit of €1.561 billion in the same month last year, the Finance Ministry said on Tuesday.


Serbian equities rose. The BELEX15 index was up 0.39%. On the macro front, inflation in Serbia seen at 3.5%-4% at the end of 2022, central bank governor Jorgovanka Tabakovic said on Friday.
Agricultural products prices in the country jumped 29.1% y-o-y in December 2021. For the full year 2021, prices increased by 20.8%, according to the Statistical Office. Inflation will largely depend on the outcome of the next agricultural season, the central bank also said. In politics, Serbia will hold early general elections on April 3.


Romania’s stock market returns were negative for the week. The blue-chip BET index fell 1.39%. Romania’s GDP grew 5.6% in 2021 compared to 2020, official data showed. ING has lowered its economic growth projection for Romania to 3.2% in 2022 from 4.5% previously, while Banca Comerciala Romana has also revised its forecast down to 3.2% in 2022 from a previous forecast of 4%. The country’s inflation rate keeps going up, climbing to 8.4% in January. Meanwhile, Romania’s current account balance posted a deficit of EUR16.95 billion in 2021, 55% higher than in 2020, central bank data showed.


Slovenian markets lost for the week. On the bright side, consumer confidence in the country improved in February, as the relevant indicator was three percentage points up on a monthly basis, and one point above the long-term average, the Statistics Office reported on Friday. On the banking front, Slovenia’s banking system generated an after-tax profit of EUR 527.3 million in 2021, an increase of 17.1% compared to 2020. Pre-tax profit rose by about a fifth to stand at EUR 564.7 million, central bank data showed.


Stocks in Cyprus posted gains. On a weekly basis the CSE General Index advanced 0.99%. The Cypriot economy grew by 6% GDP seasonally adjusted in the last quarter of 2021 and by 5.7% year on year, according to a flash estimate by the Statistical Service (Cystat). However, over 80% of SMEs in the island were impacted during the Covid crisis, with almost half of businesses forced to lay off staff, a survey carried out by the small shopkeepers’ association POVEK, collaborating with the Bank of Cyprus and data analytics firm Retail Zoom revealed.


The main equity index of Podgorica’s bourse returned 0.38%.Montenegro was the only South East European country among the “mostly unfree” members of the Heritage Foundation’s Index of Economic Freedom. The country lost 23 spots to the 103rd position. The Index of Economic Freedom is an annual index and ranking created in 1995 by conservative think-tank The Heritage Foundation and The Wall Street Journal to measure the degree of economic freedom in the world’s nations.


Equities in Bosnia ended the week 0.40% lower. Bosnia and Herzegovina’s  public debt rose to 62.8 million marka at the end of December 2021. The Balkan country’s foreign debt totaled BAM 9.698 billion (EUR 5 billion) at the end of 2021, up from BAM 8.663 billion a year. Earlier. Meanwhile, the average gross monthly salary rose 4.5% y-o-y to 1,542 marka in 2021, the statistical office said.


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Stocks in Bulgaria climbed. The SOFIX added 0.25% over the week.
Of note, the Bulgarian stock exchange started the trading in crypto instruments based on and following Bitcoin and Ethereum prices, as the asset class grows in popularity. By launching the new instruments, the BSE joined leading European exchanges such as Deutsche Borse and Euronext. On the macro front, the annual inflation rate in Bulgaria accelerated to 9.1% in January from 7.8% in the previous month. It was the highest inflation rate since November of 2008, according to the National Statistical Institute. Meanwhile, net foreign direct investment inflow into the country dropped 54% in 2021 central bank data showed on Friday.

(Zagreb’s CROBEX index led the losses in the region)


Croatia’s stock market generated a negative return for the week with the CROBEX index down 2.01%. On the banking front, in response to the continued accumulation of cyclical systemic risks, in particular the rise in residential property prices and more dynamic lending in the segment of housing loans, the central bank announced that the countercyclical buffer rate will be raised from 0% to 0.5% as of 31 March 2023. In other economic news, Croatia’s GDP growth seen at 10.9% in 2021, according to the Institute of Economics Zagreb (EIZ). Croatia also on Wednesday unveiled a 4.8 bln kuna (637 mln euro) set of measures to offset rise in energy prices.

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Kyriaki Balkoudi is a markets editor for World Markets Daily. She has a bachelor’s degree in Balkans Studies from Aristotle University of Thessaloniki, Greece and a master’s degree in International Politics from City University London, UK.

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