SEE equities

Stocks in SEE lose ground on weak global cues

From 02-06/05/2022


Most of the major benchmarks in South East Europe endured a week of losses as interest rate and inflation worries continued to weigh on sentiment. The Ukraine conflict added to the uncertainty. And the countries of the Western Balkans region are facing a new range of economic challenges, despite a better-than-expected rebound from the recession caused by the COVID-19, says the latest Western Balkans Regular Economic Report . Performance in 2022 is expected to vary considerably across the Western Balkans from 3.6% in Montenegro to 2.7% in Bosnia & Herzegovina and North Macedonia. The bank also projects Albania’s and Serbia’s growth at 3.2%.

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The Athens Exchange (ATHEX) general index sank 6.04% this week with the banks index sliding for the eighth session in a row. In commodities, Greece and Bulgaria agreed on Thursday to seek joint gas deliveries for southeastern Europe and decrease reliance on Russian gas amid the war in Ukraine. Greece also pledged new state aid to counter rising power bills.


On a weekly basis, Belgrade’s Belex 15 benchmark index declined 6.04%. Serbia’s GDP grew 4.3% y-o-y in the first quarter of 2022, a flash estimate showed. The World Bank warned that global crises threaten Serbia’s robust economic recovery. Meanwhile, Serbia’s public debt-to-GDP ratio slightly rose to 51.9% at the end of March, while Serbia’s budget was in a deficit of 72.1 billion dinars ($647.5 million/612.9 million euro) in the first quarter of 2022 compared to a surplus of 24.4 billion dinars in the same period a year ago, according to official figures.


The blue-chip BET index plunged 2.18% this week. The country’s unemployment rate stood at 5.7% m-o-m in March while industrial producer prices jumped 52% y-o-y. In currencies, Romanian central bank foreign exchange reserves rose to 40.5 billion euro last month, National Bank of Romania (BNR) data showed. According to Austrian banking group Erste, the BNR is likely to hike its key rate to 4%, to keep up with CEE peers. In commodities, Romania’s Romgaz signed a $1.06 billion takeover contract for US energy giant Exxon’s stake in Neptun Deep in the Black Sea.


Slovenian stocks as measured by the SBITOP index returned -0.42%. Slovenia’s trade balance turned to deficit in the first quarter of 2022, as exports went up 23.7% on the year to 4.354 billion euro in March, while imports grew 45.5% to 4.993 billion euro. On the banking front, Slovenia’s Central Bank will ease restrictions on mortgage lending from July, giving banks more discretion over who they lend money to, while requiring that they increase their capital buffer.


The general index of the Cyprus Stock Exchange decreased. On the macro front, Cyprus’ annual inflation rate rose to 8.8% in April from 7.1% in the previous month, the highest rate since February of 1982. Meanwhile, the annual household electricity bills shot up by 36% in the second half of 2021, the third-biggest increase in the EU27, according to Eurostat. On the banking front, the rate of non-performing loans in the island increased to 11.7% in January from 11.1% at the end of 2021, data released by the Central Bank of Cyprus showed.


Stocks as measured by the MNSE10 index dropped 1.52% on Friday. While Montenegro’s economy bounced back strongly last year with a growth rate of 12.4%, the highest rate among the six Western Balkan countries, the World Bank now sees its GDP growth to slow to 3.6% in 2022 due to the war in Ukraine.


Equities in Bosnia were The economy of Bosnia and Herzegovina bounced back strongly in 2021 from the pandemic-induced economic crisis, with growth estimated at 7.1%. Real GDP growth was driven by a surge in exports, and robust growth in private consumption. However, output growth in 2022 is expected to slow to 2.7 percent, as the war in Ukraine disrupts trade and exacerbates energy and food price increases.


Bulgarian stocks were lower with the SOFIX index plunging 2.20% over the week. Bulgaria will seek an exemption from the European Union’s proposed Russian oil embargo if such opt-outs are allowed, Bulgaria’s deputy prime minister Assen Vassilev said on Wednesday in an interview with financial newspaper Capital. Slovakia, Hungary and the Czech Republic have already sought such exemptions, as those countries depend heavily on energy imports. Last week, Russia cut gas supplies to Bulgaria,  over its refusal to pay for the gas in roubles, sticking to an EU position.

No data available. To be added in due course.


Croatian stock markets returns were negative for the week. The European Bank for Reconstruction and Development announced it will provide EUR 50 million loan for infrastructure projects (water, sanitation and public transport) in Zagreb.

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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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