Regional indices TTM - InterCapital Espresso... · IC Daily Highlights ... [SLOVENIA] Telekom...

Theme of the Day:

How Have Prices Performed Since Our Last IC Market EspressoBond, Money and Currency Markets:

Croatian Eurobonds Demonstrate Resilience to Global Risk Off EventsCroatian Equity Market:

Market Activities Could Slowly Recover after the Holidays SeasonRegional Equity Market:

Serbian Companies Publishing H1 ResultsGlobal Equity Market:

Retail Wreck Caps Gains in Stocks in USTechnical Perspective - Region:

HTRA CZ – Resistance @ 184.00Technical Perspective - Global:

SX5E – Threading Water for the Last Month and a Half

IC Daily Highlights

•[CROATIA] Sberbank sues Jamnica [JMNCRA CZ] in front of court in Belgrade, demands foreclosure on its stake in Serbian and Slovenian subsidiaries based on guarantees given for Agrokor loans•[CROATIA] ZSE was closed yesterday•[SLOVENIA] Telekom Slovenije’s subsdiary received EUR 50m lawsuit in B&H•[SLOVENIA] LJSE was closed yesterday•[ROMANIA] Fondul Proprietatea published H1 results, announced competitive process aimed at potential disposal of Enel companies•[ROMANIA] Electrica cons H1 revenues down 2.8%, EBIT down 96% (RON 18m), net income down 98% (RON 8m)•[ROMANIA] BSE was closed yesterday

IC Daily Newsflash

InterCapital Contacts

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures

IC MARKET ESPRESSOInterCapital Research

16 August 2017

Quote of the Day:„The longer I go on, the more I am aware of the

power of finance.”

Justin Welby

Ivan DražetićMoney Market and Fixed Income, DealerPhone: + 385 (0)1 4825 852E-mail: [email protected]

Kristina PukšecHead of Fixed Income and Money MarketPhone: + 385 (0)1 4825 854E-mail: [email protected]

IC.traderInterCapital.hr1

Đivo PulitikaAnalystPhone: + 385 (0)1 4825 867E-mail: [email protected]

Croatia I Slovenia I Romania I Bulgaria I Serbia

Margareta MaresićJunior AnalystPhone: + 385 (0)1 4825 857E-mail: [email protected]

Irena IvankovićHead of Institutional DeskPhone: + 385 (0)1 4825 891E-mail: [email protected]

Danijel DelačBoard Member in charge of BrokeragePhone: + 385 (0)1 4825 894E-mail: [email protected]

Filip MajićBrokerPhone: + 385 (0)1 4825 896E-mail: [email protected]

Marin OnoratoMoney Market and Fixed Income, DealerPhone: + 385 (0)1 4343 180E-mail: [email protected]

Marcel DimačJunior AnalystPhone: + 385 (0)1 4825 858E-mail: [email protected]

Date Announcement

16-Aug-17 Transelectrica - H1 2017 results

18-Aug-17 Triglav Group - H1 2017 results

18-Aug-17 Luka Koper - H1 2017 results

24-Aug-17 Sava Re - H1 2017 results

25-Aug-17 Gorenje - H1 2017 results

25-Aug-17 Petrol - H1 2017 results

13-Sep-17 CICG - H1 2017 results

12-Oct-17 Luka Koper - 9M 2017 results (prelim.)

26-Oct-17 TLSG - 9M 2017 results

Upcoming Announcements

Company Investment Thesis

VALAMARRIVIERA

One of the largest hospitality groupsFavourable accommodation positioning

Strong growth potential

PETROLGROUP

Stable cash flowHigh level of debt

Strong retail player

ADRISGROUP

Strategic shiftStrong cash position

Growth potential in insurance

FONDULPROPR.

Managed by Franklin TempletonSignificant discount to NAV

Possible privatizations of portfolio companies

Top Regional Investment Stories

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CRO Index SBITOP Index BELEX15 Index

BET Index SOFIX Index

Source: Bloomberg

Regional indices TTM

http://ictrader.com.hr/

http://www.intercapital.hr/

IC MARKET ESPRESSO

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 2 IC.traderInterCapital.hr

Our daily IC Market Espresso report has been last published on July 21. Although there weren't any major corporate news or shifts on the markets we cover, we wanted togive a simple overview of what happened to the prices in Croatia, Slovenia and Romania. The table shows the YTD performance at the moment of our last MarketEspresso (July 21) and the change that followed.

Uljanik Plovidba, Zagrebacka Banka and Optima Telekom were the best performers in Croatia during those 3 weeks (growing by some 8-9% each), while Petrokemija andZagreb Stock Exchange lagged the most (-6% each). Petrokemija is currently looking for a strategic investor who would take over the company. In Slovenia there were nomajor growths in the period, but a noteworthy lag was seen in KD Group (-10%) and Intereuropa (-5%). Note that Intereuropa is still up 56% YTD, being the leadingSlovenian share this year. Most Romanian companies are strongly in green in the YTD period, but the last 3 weeks alone had the biggest positive impact onNuclearelectrica (+7%), while Electrica dropped 9%.

How Have Prices Performed Since Our Last IC Market Espresso

Theme of the Day

Croatian companies

Slovenian companies

Romanian companies

Name Ticker Until 21 July After 21 July Year-to-date

-6.2% 1.4% -4.9%

Dalekovod DLKVRA CZ EQUITY 68.9% -2.3% 65.1%

Atlantska Plovidba ATPLRA CZ EQUITY 50.2% 0.4% 50.7%

Ingra INGRRA CZ EQUITY 40.6% 2.6% 44.3%

Valamar Riviera RIVPRA CZ EQUITY 26.2% 1.4% 27.9%

Maistra MAISRA CZ EQUITY 16.7% 7.1% 24.9%

AD Plastik ADPLRA CZ EQUITY 23.0% -1.4% 21.3%

Optima Telekom OPTERA CZ EQUITY 6.9% 8.8% 16.3%

Hrvatski Telekom HTRA CZ EQUITY 7.6% -0.8% 6.7%

Koncar Group KOEIRA CZ EQUITY 5.8% 0.2% 6.0%

Ericsson Nikola Tesla ERNTRA CZ EQUITY 4.4% 0.7% 5.1%

Arena Hospitality ARNTRA CZ EQUITY 2.4% 1.7% 4.2%

Zagrebacka Banka ZABARA CZ EQUITY -6.7% 7.5% 0.3%

Adris (pref) ADRSPA CZ EQUITY 0.1% -0.8% -0.7%

Uljanik Plovidba ULPLRA CZ EQUITY -13.4% 9.6% -5.1%

Atlantic Grupa ATGRRA CZ EQUITY -13.3% 7.7% -6.6%

Zagreb Stock Exchange ZBRA CZ EQUITY -1.2% -6.2% -7.2%

Luka Ploce LKPCRA CZ EQUITY -5.4% -3.7% -8.9%

Kras KRASRA CZ EQUITY -14.4% -0.1% -14.5%

Petrokemija PTKMRA CZ EQUITY -10.1% -6.2% -15.7%

Podravka PODRRA CZ EQUITY -15.9% -0.7% -16.5%

Duro Dakovic DDJHRA CZ EQUITY -28.1% -5.2% -31.9%

12.3% -0.1% 12.3%

Intereuropa IEKG SV EQUITY 64.3% -4.9% 56.2%

Luka Koper LKPG SV EQUITY 27.6% 1.5% 29.5%

Sava Re POSR SV EQUITY 18.1% 0.3% 18.5%

Telekom Slovenije TLSG SV EQUITY 14.5% 1.9% 16.7%

Petrol PETG SV EQUITY 17.4% -0.9% 16.4%

Triglav Group ZVTG SV EQUITY 14.4% 1.3% 15.9%

Gorenje GRVG SV EQUITY 8.0% -1.4% 6.5%

Krka KRKG SV EQUITY 3.9% -0.3% 3.6%

Cinkarna Celje CICG SV EQUITY 4.9% -3.0% 1.8%

Unior UKIG SV EQUITY -8.1% 0.0% -8.1%

KD Group KDHR SV EQUITY -12.0% -10.4% -21.2%

18.2% -0.5% 17.6%

Nuclearelectrica SNN RO EQUITY 44.6% 7.4% 55.4%

MedLife M RO EQUITY 38.9% 4.9% 45.6%

Transgaz TGN RO EQUITY 33.3% -0.4% 32.7%

Banca Transilvania TLV RO EQUITY 25.0% -1.1% 23.6%

Conpet COTE RO EQUITY 28.2% -4.0% 23.1%

OMV Petrom SNP RO EQUITY 21.9% 0.7% 22.7%

Romgaz SNG RO EQUITY 14.8% 3.8% 19.1%

BRD Bank BRD RO EQUITY 20.3% -2.4% 17.4%

Bucharest Stock Exchange BVB RO EQUITY 17.0% 0.2% 17.2%

Fondul Proprietatea FP RO EQUITY 10.0% -0.3% 9.7%

Electrica EL RO EQUITY 10.3% -9.2% 0.2%

Transelectrica TEL RO EQUITY -0.6% -2.8% -3.4%

Digi Communications DIGI RO EQUITY -2.7% -2.0% -4.7%

Croatia (CROBEX index)

Slovenia (SBI TOP Index)

Romania (BET Index)



Croatian Eurobonds Demonstrate Resilience to Global Risk Off Events

Bond, money and currency markets

IC MARKET ESPRESSO

InterCapital domestic bond quotes Bloomberg: INKA5 <GO>BBG User: INTERCAPITAL FI


bond curr. coupon price mid ytm

CROATIA

CROATI 18 EUR 5,875% 105,27 -0,04%CROATI 22 EUR 3,875% 112,06 1,26%CROATI 25 EUR 3,000% 106,16 2,11%CROATI 27 EUR 3,000% 103,98 2,53%CROATI 19 USD 6,750% 109,10 2,50%CROATI 20 USD 5,625% 110,74 2,75%CROATI 21 USD 6,375% 111,67 2,94%CROATI 23 USD 5,500% 111,19 3,30%CROATI 24 USD 6,000% 114,26 3,51%

SLOVENIA

SLOVEN 18 EUR 4,000% 102,68 -0,50%SLOVEN 18 USD 4,750% 102,32 1,53%SLOVEN 22 USD 5,500% 114,75 2,45%SLOVEN 23 USD 5,850% 117,38 2,57%SLOVEN 24 USD 5,250% 115,44 2,65%

SERBIA

SERBIA 17 USD 5,250% 100,98 1,41%SERBIA 18 USD 5,825% 104,70 2,16%SERBIA 20 USD 4,875% 105,20 2,73%SERBIA 21 USD 7,250% 116,22 3,02%SERBIA 24 USD 6,750% 102,89 6,24%

BULGARIA

BULGARIA 22 EUR 2,000% 108,17 0,21%BULGARIA 24 EUR 2,950% 112,78 1,06%BULGARIA 27 EUR 2,625% 108,71 1,64%BULGARIA 35 EUR 3,125% 105,63 2,72%

ROMANIA

ROMANIA18 EUR 6,500% 105,71 -0,33%ROMANIA19 EUR 4,875% 111,11 -0,12%ROMANIA20 EUR 4,625% 114,28 0,00%ROMANIA22 USD 6,750% 116,51 2,79%ROMANIA24 USD 4,875% 110,77 3,02%

Eurobonds

DUR. Zibor Euribor Belibor Robor(HRK) (EUR) (RSD) (RON)

O/N 0,37% n.a. 2,97% 0,58%1M 0,52% -0,37% 3,31% 0,71%3M 0,60% -0,33% 3,54% 0,88%6M 0,68% -0,27% 3,76% 1,08%9M 0,73% -0,21% n.a. 1,18%1Y 0,80% -0,16% n.a. 1,23%

Money Market Rates

ask

local sovereign, currency clause

RHMF-O-19BA

RHMF-O-203E

RHMF-O-227E

RHMF-O-247E

RHMF-O-327A

local sovereign, HRK

RHMF-O-17BA

RHMF-O-187A

RHMF-O-203A

RHMF-O-217A

RHMF-O-222A

RHMF-O-257A

RHMF-O-26CA

RHMF-O-282A

4,24 4,24

98,70 100,00 3,02% 2,87% 8,96 8,9807/02/2028

2,250%

2,875%

101,60 102,60 1,88% 1,64%

6,70 6,71

7,73 7,7514/12/2026 4,250% 111,80 112,80 2,80% 2,69%

104,90 1,68% 1,45%08/07/2021 2,750%

2,61% 2,48%114,40113,404,500%09/07/2025

104,00

07/02/2022

0,29%

179,37

3,68

5,82

0,270,27

3,68

2,33

5,812,35% 2,18%

2,32

11,69

ticker maturity couponprice ytm

10/07/2024

05/03/2020 6,500% 114,30 115,20

29/11/2019

22/07/2022 6,500% 121,80

bench.

spreadbid ask bid bid ask

m. duration

73,940,81% 0,47%

75,65

145,44

5,375% 110,30 111,10 2,15 2,16

4,32

2,340,82% 0,49% 2,33

4,311,85% 1,62%

5,750% 121,50 122,70

123,00

0,88

25/11/2017

0,88

-0,07%101,70101,606,250%

05/03/2020 6,750% 114,00 114,80

10/07/2018 5,250% 104,30 0,10%

1,16% 0,87%

104,60 0,43%

11,7207/07/2032 3,250% 100,20 101,40 3,23% 3,13%

quotations

In spite of some risk off events taking place in early August, Croatian EUR-denominated papermanaged to report a considerable risk premium and yield contraction, especially looking on mid tolong term part of the curve. Before our IC Market Espresso went on summer vacation (July 21st),CROATIA 2025 EUR was traded at 2.38% YTM, while this morning it could be purchased at 2.11% mid.The availability of instruments comes under scrutiny and the interplay of supply and demand pushesyields to all-time lows.

Even more interesting is the behavior of Croatian paper throughout the last two weeks. As equityindices went down driven by escalation of tensions in the Pacific and VIX consequently exploded,Croatian fixed income instruments seem to be living in a world of their own. Chart 2. depicts a sharpreaction of iTraxx Crossover (an index of 75 CDSs written on most liquid sub-investment gradeEuropean corporates, in other words a very good measure of global investors’ risk appetite) to thegame of chicken between US and North Korea, nevertheless CROATIA 2022 EUR YTM remained on asteady downward path. This probably came as a disappointment to local investors who were hopingto catch some scraps by buying on dips – and it seems that we’ll all have just to wait for a whilebefore we see any dips on Croatian EUR-denominated paper.

INDICATOR CRO SLO SRB ROM BULGDP (YoY, %) 2,5 5,3 1,3 5,7 3,9

10Y Spread (bps) 213,5 65,2 389,6 187,0 221,8

CPI headline (YoY, YTD avg) 1,1 1,5 3,5 1,4 1,3

PPI (YoY, YTD avg) 2,0 1,5 3,8 3,5 3,1

ind. Production (YoY, YTD avg) 2,2 7,5 1,9 8,5 5,0retail sales (YoY, YTD avg) 6,9 11,8 1,9 8,5 5,0unemployment (YoY, YTD avg) 13,5 7,2 14,0 4,5 7,7budget balance (% GDP) -0,8 -1,8 -4,6 -3,0 0,0public debt (% GDP) 84,2 79,7 72,9 37,6 29,5

Macroeconomic indicators

2,33

2,83

-0,02

1,26

2,11

2,53

-0,05

0,45

0,95

1,45

1,95

2,45

2,95

3,45

0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 11,0

Chart 1. Croatian EUR Yield Curve (%)

01/01/2017 16/08/2017

1,00

1,25

1,50

1,75

2,00

2,25

2,50

2,75

3,00

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340

360

Aug-16 Sep-16 Nov-16 Dec-16 Feb-17 Mar-17 May-17 Jun-17 Aug-17

Chart 2. CROATIA 2022 EUR YTM and iTraxx Crossover

iTraxx Crossover (bps, lhs)

CROATIA 2022 EUR Mid YTM (bps, rhs)



Day YTD 1YLast

Price EV/S P/EEV /

EBITDANet debt / EBITDA ROE (%) Div. Yld

CROBEX* 0,3% -4,9% 6,2% 1.898 1,20 63,18 12,12 3,05 2,0% 2,8%

SBITOP 0,3% 12,3% 12,6% 806 0,52 11,17 6,67 1,94 8,5% 4,7%

BELEX15 -0,3% -0,2% 15,3% 716 0,81 19,16 5,91 0,74 3,7% 4,3%

BET 0,2% 17,6% 22,8% 8.334 1,09 10,38 3,62 -0,95 9,3% 5,2%

SOFIX 0,2% 24,4% 57,3% 729 1,18 10,94 8,79 1,18 6,9% 1,4%

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CRO Index

CRO10 Index

CROPLUS Index

Source: Bloomberg

With Croatian, Slovenian and Romanian market closed yesterday, the spotlight falls on Serbia, wheresome of the major index components published H1 results.[Serbia - Energoprojekt Holding - ENHL SG] The construction holding, which was recently taken overby Napred Razvoj, showed consolidated H1 revenues of RSD 17m (EUR 146m), up 20% YoY. EBITDA isup 80% to RSD 1.2bn (EUR 10m), while net income almost doubled to RSD 724m (EUR 6m).[Serbia - Aerodrom Nikola Tesla - AERO SG] The Belgrade airport showed revenues up 10% in H1, toRSD 4.3bn (EUR 36m), with EBITDA up by a similar 9% to RSD 2bn (EUR 18m). EBITDA margin at 49%,only slightly below last year's level. The bottom line shows RSD 1.4bn (EUR 12m), up 1%.[Serbia - Jedinstvo Sevojno - JESV SG] The company showed revenues of RSD 1.5bn (EUR 12m) inthe first 6 months of the year, down by 34% compared to the same period last year. However, a moresignificant reduction in operating expenses (-37%) boosted EBITDA by 30% to RSD 70m (EUR 0.8m).EBITDA margin went from 3% to 6%. Although somewhat reduced by financial categories, theimprovement was translated all the way to the bottom line (net profit up 42% to RSD 22m or EUR181 thousand).

Serbian Companies Publishing H1 Results

Regional Equity Market

IC MARKET ESPRESSO

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 4

As most other markets, Zagreb Stock Exchange was closed for trading yesterday to commemoratethe Assumption of Virgin Mary day. Consequently, there were no major corporate news, but moreimportantly this date usually marks the end of the peak holidays season. The last couple of weeks(basically following Q2 results up until today) were quite calm on the stock exchange and trading wassignificantly below-average. Historically there has usually been some recovery in trading in thesecond part of August and September, and we hope to see the same this year as well.Q2 company results were covered in our Company Notes so we will not go through them again, but abrief update on the Agrokor situation is due. Trading with the listed Agrokor companies (Ledo,Jamnica, PIK Vinkovci, Belje, Vupik, Zvijezda) is still halted, waiting for the audited reports to bepublished. The companies said there reports will be postponed (previously they targeted thebeginning of August for audited 2016 figures), but the exact date is still unknown. Our guess is thatthe reports might be published in the following weeks and that trading might begin again inSeptember. This could give further boost to liquidity on the stock exchange. We will of course keepyou updated on any changes there. In the meantime, the extraordinary administration of Agrokorpublished their monthly report for July 2017, showing some preliminary H1 numbers for the business.The report can be read here, and it shows that the food and agriculture businesses remain profitableon the operating level, while retail and wholesale appear to be in a need for thorough restructuring.

Market Activities Could Slowly Recover after the Holidays Season

Croatian Equity Market

Index fundamentals

Daily market snapshot

Volume: EUR 0.77m

* ATPLRA ZA and ADRSPA ZA are excluded from CROBEX multiples and ratios due to large one-off event / Market snapshot includes only main index components

IC.traderInterCapital.hr

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SBITOP Index

Source: Bloomberg

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BELEX15 Index

BELEXLIN Index

Source: Bloomberg

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BET Index

BET-BK Index

Source: Bloomberg

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SOFIX Index

BGBX40 Index

Source: Bloomberg

Electrica 1,24 Uljanik Plovidba 7,75% Sojaprotein -6,02%

Romgaz 0,51 Duro Dakovic 6,46% Eurohold Bulgaria -3,83%

Banca Transilvania 0,50 Galenika Fitofarmacija 3,77% Industrial Capital Holding -3,66%

OMV Petrom 0,43 M+S Hydraulic 3,54% Electrica -3,51%

Krka 0,20 Neochim 3,13% Messer Tehnogas -3,13%

Fondul Proprietatea 0,20 Holding Varna 3,07% Kras -2,88%

Transgaz 0,18 Pozavarovalnica Sava 2,56% Bulgarian Real Estate Fund REIT-2,27%

Zavarovalnica Triglav 0,11 Chimimport 2,21% Gorenje -2,21%

Albena AD 0,08 Optima Telekom 1,96% Ericsson Nikola Tesla -2,08%

Volume (EURm) Winners Laggards

Volume: EUR 1.72m

Volume: EUR 0.07m

Volume: EUR 7.53m

Volume: EUR 0.65m

http://www.agrokor.hr/en/news/extraordinary-administration-delivered-its-monthly-report-for-july-2017/



S&P 500 SECTOR PERFORMANCE % Day % YTD % 1M % 3M % 6M % 1Y % Day % YTD % 1M % 3M % 6M % 1Y

CONSUMER DISCRETIONARY -0,9% 10,1% -0,6% 0,1% 3,8% 10,0% INDUSTRIALS -0,2% 8,4% -1,7% 2,5% 3,3% 14,9%

CONSUMER STAPLES 0,5% 7,6% 1,4% 1,2% 3,0% 2,2% INFO TECH 0,2% 23,5% 1,7% 3,8% 13,5% 27,7%

ENERGY -0,4% -15,9% -3,2% -6,4% -11,3% -8,9% MATERIALS 0,0% 8,3% -2,4% 1,6% 2,7% 11,1%

FINANCIALS 0,2% 7,6% 0,8% 5,6% 2,5% 29,1% TELECOM SERVICES -1,0% -9,8% 6,8% 2,0% -4,7% -9,2%

HEALTHCARE -0,0% 14,7% -1,3% 4,9% 7,5% 6,6% UTILITIES 0,5% 11,4% 4,3% 5,5% 9,8% 9,8%

day 1 Y YTD

North/South AmericaDOW JONES 0,02% 18,58% 11,32%

S&P 500 -0,05% 13,15% 10,08%

NASDAQ -0,11% 21,16% 17,65%

S&P/TSX -0,15% 2,68% -1,24%

BOLSA 0,34% 6,18% 12,48%

BOVESPA 0,10% 16,14% 13,50%

MERVAL 0,72% 49,06% 34,19%

IPSA 0,60% 21,72% 21,98%

Asia/PacificS&P/ASX 200 0,20% 4,29% 1,82%

NIKKEI 225 0,01% 19,03% 3,35%

HANG SENG 0,66% 19,39% 24,33%

SHCOPM -0,18% 4,35% 4,56%

KOSPI 0,49% 14,40% 15,76%

TWSE -0,58% 12,52% 10,78%

SET -0,19% 1,73% 1,37%

BSE SENSEX 30 0,09% 11,81% 18,21%

Africa/Near East/RussiaFTSE/JSE -0,92% 7,19% 10,83%

XU 100 -2,40% 37,58% 36,83%

Hermes -0,35% 60,70% 9,58%

Tel Aviv 100 0,05% -2,21% -1,86%

MICEX 10 -0,20% -3,90% -13,48%

RTS -0,36% 5,40% -10,84%

Western EuropeDJ EURO STOXX 50 0,33% 14,78% 5,21%

FTSE 100 0,41% 7,11% 3,37%

CAC 40 0,36% 15,24% 5,72%

DAX 0,10% 14,05% 6,06%

IBEX 35 0,19% 21,57% 12,08%

S&P/MIB 30 1,72% 29,35% 12,93%

SMI -0,21% 9,70% 9,64%

1,70% 40,79% 22,83%ATX

IndexChange (%)

Retail stocks fell sharply on Tuesday, capping gains in the broader market.

The SPDR S&P Retail ETF (XRT) fell 2.7 percent, with shares of Advance Auto Partsposting their worst day ever after posting weaker-than-expected earnings. Dick'sSporting Goods also took a hit, shedding 23 percent after the company's resultsmissed the mark. The company also revised lower its 2017 outlook.

Dow component Home Depot posted better-than-expected earnings and sales forthe previous quarter, but its stock still fell 2.7 percent. Shares of Amazon,meanwhile, closed flat.

Meanwhile, bank stocks rose after better-than-expected economic data liftedTreasury yields.

Retail Wreck Caps Gains in Stocks in US

Global Equity Market

IC MARKET ESPRESSO


STOXX EUROPE 600 SECTOR PERFORMANCE % Day % YTD % 1M % 3M % 6M % 1Y % Day % YTD % 1M % 3M % 6M % 1Y

AUTOMOBILES & PARTS -0,0% -1,5% -5,4% -7,6% -4,1% 9,6% INSURANCE -0,2% 12,8% -2,9% -3,7% 6,9% 17,9%

BANKS 0,2% 5,9% -2,6% -4,7% 2,0% 10,6% MEDIA -0,0% -4,1% -1,9% -7,0% -3,8% -2,0%

BASIC RESOURCES -0,0% 1,1% -1,1% -5,6% 0,4% -5,0% OIL & GAS -0,7% -11,5% -1,9% -10,8% -7,9% 0,5%

CHEMICALS -0,1% 2,2% -4,5% -6,6% -0,5% 8,4% REAL ESTATE 0,1% 4,7% -1,2% 0,8% 4,3% 22,2%

CONST. & MATERIALS 0,2% 8,8% -2,1% -1,9% 4,7% 36,3% RETAIL 0,4% 8,5% 1,5% 0,0% 9,3% 3,5%

CONSUMER GOODS 0,8% 6,1% -2,1% -4,3% 5,1% 10,5% TECHNOLOGY -1,2% 2,2% -2,7% 1,1% -9,7% 25,0%

FINANCIAL SERVICES 0,2% 7,7% -0,3% -2,9% 6,2% 1,0% TELECOM SERVICES -0,4% 0,3% -0,6% -5,4% 1,8% -2,8%

FOOD & BEVERAGE 0,3% 13,6% -1,5% -3,6% 6,7% 16,6% TRAVEL & LEASURE 0,1% 7,5% -4,1% -4,6% 3,8% 13,7%

HEALTH CARE 0,5% 1,9% -4,6% -9,1% -2,0% -2,2% UTILITIES -0,1% -3,9% -1,6% -7,6% -2,7% -1,0%

IND. GOODS & SERVICES 0,2% 9,2% -3,8% -6,2% 5,5% 7,6%



This summer was filled with bullish sentiment on HTRA CZ and the price moved up from169.00 (June 30th close) to 181.00 (August 14th close). Currently, the closest resistencepoint we see stands @ 184.00 (June 29th high), but this is rather close and should bebreached in the near future. After that the upside trend could continue all the way up to190.00, recorded last time at the end of February.

HTRA CZ – Resistance @ 184.00 (daily chart)

Technical Perspective - Region

Ater last week’s downward pressure eased and geopolitical tensions cooled down,Eurostoxx returned right where it started it’s way down. Summertime doldrums are stillat force and we don’t expect any bouts of volatility so soon. We would be buyers shouldthe SMAVG200 get breached, but would remain neutral should the same thing happen toeither SMAVG50 or SMAVG100.

SX5E – Threading Water for the Last Month and a Half (daily chart)

Technical Perspective - Global

We remain bullish, unless the share closes below 174.50 by the end of August.

Trading Suggestion:

We would be buyers if the SMAVG200 (3386,39) gets breached.

Trading Suggestion:

Technical Targets:3524,33… SMAVG1003501,49… SMAVG50

3461,91… close3407,33… low 19/04/20173214,31… low 08/02/2017

IC MARKET ESPRESSO


Technical Targets:191,50… high 23/02/2017183,99… high 29/06/2017

181,00… last174,50... low 20/06/2017

166,11… low 2017



Selected Equity Fundamentals (Trailing Basis) & Performance

Regional Equity Market; Fundamentals of Selected Companies

IC MARKET ESPRESSO


Company

Day YTD 1Y P/E P/BV P/CFO EV/SEV /

EBITDANet debt / EBITDA ROA (%) ROE (%) Dividend Div. Yld

Industrial

Koncar 2017-06 254,9 733,00 1,9% 6,2% 11,4% 12,26 0,77 11,37 0,43 6,10 -3,31 4,2% 6,3% 12,00 1,6%

Ericsson NT 2017-06 220,2 1.223,01 -2,1% 5,1% 19,8% 16,78 5,02 18,18 0,91 8,93 -1,23 12,2% 29,9% 90,00 7,4%

Petrokemija 2017-06 27,7 15,94 6,3% -10,9% -18,3% -1,58 32,55 -0,45 0,57 -34,90 -27,79 -11,0% -2060,2% 0,00 0,0%

Duro Dakovic 2017-06 32,9 31,99 6,5% -29,1% -39,5% -34,49 3,29 -2,10 1,06 21,59 12,41 -1,0% n/a 0,00 0,0%

AD Plastik 2017-06 95,0 167,25 0,0% 20,7% 45,0% 11,92 0,95 11,52 1,06 7,02 2,12 4,5% 8,0% 12,00 7,2%

Gorenje 2017-03 151,4 6,20 -2,2% 3,4% -14,5% 15,28 0,40 2,25 0,44 6,26 4,56 0,9% 2,6% 0,10 1,6%

Cinkarna 2017-03 134,4 165,00 1,2% 1,9% 90,1% 8,49 0,88 4,61 0,58 3,30 -1,11 8,2% 10,3% 4,20 2,5%

Metalac 2016-06 32,0 1.873,00 -1,5% 11,1% 33,8% 8,81 0,85 7,84 0,53 5,48 0,36 5,8% 9,6% 155,00 8,3%

Jedinstvo 2016-06 12,8 5.000,00 0,0% 22,0% 24,3% 4,82 0,30 -1,60 0,12 1,16 -1,56 3,2% 6,3% 211,76 4,2%

Alfa Plam 2016-12 51,5 35.150,00 0,0% 0,4% 13,4% 7,71 0,86 8,68 0,81 5,49 -1,70 9,4% 11,1% 1.000,00 2,8%

Messer Teh. 2016-12 102,5 11.801,00 -3,1% -9,3% 11,3% 9,44 0,81 4,65 0,82 2,42 -1,89 7,9% 8,6% 1.801,00 15,3%

Gosa Montaza 2016-06 3,0 1.400,00 0,0% -41,7% -29,3% 2,95 0,35 -16,81 -0,20 -1,99 -4,26 7,1% 11,9% 142,00 10,1%

Neochim 2017-03 80,1 59,00 3,1% -1,0% 7,4% 8,27 1,32 5,44 0,70 4,01 -0,13 10,7% 16,0% 0,80 1,4%

Monbat 2017-03 224,6 11,27 -0,3% 16,6% 58,7% 15,49 2,19 68,47 1,86 10,53 1,60 8,3% 14,2% 0,28 2,5%

MS Hydraulic 2015-12 171,7 8,60 3,5% 29,4% 69,6% 39,30 5,30 19,63 3,71 19,12 -0,83 11,7% 13,5% 0,22 2,6%

Last availab. FS Last price

Change

M. Cap( EURm)

Fundamental indicators

Utility

Electrica 2017-03 997,5 13,20 -3,5% 0,3% -0,3% 16,55 0,71 8,78 0,44 3,28 -2,94 3,4% 4,3% 0,74 5,6%

Transgaz 2017-06 1.008,2 392,00 0,8% 33,3% 38,0% 6,47 1,25 4,90 1,60 2,95 -1,48 12,6% 19,3% 46,33 11,8%

Transelectrica 2016-12 451,5 28,20 0,4% -3,4% -1,2% 7,98 0,66 4,05 0,59 2,42 -0,65 4,9% 8,3% 1,88 6,7%

Janaf 2017-06 763,1 5.600,00 0,0% 5,7% 21,5% 18,81 1,45 12,40 6,96 9,18 -1,35 7,2% 7,7% 132,15 2,4%

Energy

INA 2017-06 4.320,4 3.195,00 0,0% 10,2% 8,1% 33,88 2,85 11,16 1,92 11,34 0,65 4,8% 8,4% 15,20 0,5%

NIS 2016-12 933,4 683,00 -0,7% -7,7% 19,6% 7,42 0,55 2,70 1,06 6,20 2,82 4,0% 7,5% 24,69 3,6%

OMV Petrom 2017-06 4.009,0 0,32 0,6% 24,1% 25,3% 9,96 0,68 3,24 0,94 2,93 -0,23 4,4% 6,8% 0,02 4,6%

Romgaz 2017-06 2.504,7 29,75 1,4% 19,0% 30,5% 8,98 1,26 5,39 1,83 3,86 -2,26 11,1% 14,1% 2,69 9,0%

Nuclearelectrica 2017-06 494,0 7,50 0,9% 56,1% 48,5% 17,67 0,30 3,81 1,12 2,81 -0,58 1,4% 1,7% 0,33 4,4%

Pharma

Krka 2017-03 1.803,6 55,00 0,0% 4,0% -6,1% 16,26 1,21 9,48 1,48 8,00 -0,16 5,7% 7,4% 2,75 5,0%

Galenika Fito. 2016-12 60,3 2.725,00 3,8% 0,2% -4,4% 7,94 1,10 13,67 1,19 4,25 -2,28 13,2% 13,9% 80,00 2,9%

Sopharma 2017-03 342,5 4,97 0,1% 66,8% 78,8% 11,45 1,32 -8,44 0,92 11,33 2,26 6,8% 11,5% 0,07 1,4%

Construction

Ingra 2017-06 8,2 4,50 0,2% 47,1% 80,0% 9,18 0,59 16,81 7,97 -104,20 -94,21 0,8% 6,5% 0,00 0,0%

Tehnika 2017-06 14,1 550,06 0,0% 19,5% 50,9% 19,25 0,33 -5,09 1,08 15,00 11,60 0,5% 1,7% 0,00 0,0%

IGH 2017-06 23,6 284,00 1,4% 57,5% 265,4% -5,26 -13,41 37,74 3,01 -42,43 -29,88 -5,6% 255,1% 0,00 0,0%

Viadukt 2017-06 2,5 39,79 -0,5% -87,0% -85,9% -0,04 -0,16 -3,89 0,98 -1,17 -1,12 -76,5% 356,3% 0,00 0,0%

Hidroelektra 2017-06 3,0 36,03 0,0% -5,9% 44,1% -0,31 -0,13 -2,08 0,83 -3,57 -2,87 -28,8% n/a 0,00 0,0%

Dalekovod 2017-06 74,4 22,27 -1,0% 64,0% 68,2% 26,97 2,03 927,43 0,71 10,56 4,75 1,4% 7,5% 0,00 0,0%

Energoprojekt 2016-12 109,9 1.200,00 -0,7% -16,1% -3,4% 11,51 0,63 -20,84 0,40 8,76 -0,17 2,4% 5,5% 20,00 1,7%





IC MARKET ESPRESSO


N/A


Tourism

Liburnia Riviera 2017-06 155,5 3.800,00 0,0% 3,5% -2,1% 100,18 1,56 9,80 4,50 10,42 0,77 1,2% 1,6% 0,00 0,0%

Valamar Riviera 2017-06 757,5 44,45 1,1% 28,5% 61,8% 19,38 2,52 9,39 4,79 14,36 3,51 6,0% 13,0% 0,80 1,8%

HUP Zagreb 2017-06 175,2 3.000,00 1,7% 7,2% 30,4% 16,32 1,57 9,38 3,93 9,85 0,64 6,6% 9,6% 16,00 0,5%

Maistra 2017-06 466,2 315,00 -1,6% 24,5% 34,9% 23,59 2,51 9,87 4,53 13,50 3,45 4,9% 10,6% 0,00 0,0%

Turisthotel 2017-06 155,2 3.130,01 0,0% 6,1% 11,8% 23,32 3,54 9,76 4,98 10,81 -0,26 10,1% 15,2% 88,00 2,8%

Plava Laguna 2017-06 539,3 7.299,77 4,3% 32,7% 56,0% 16,40 2,02 8,73 4,21 10,34 0,88 7,8% 12,3% 0,00 0,0%

Arena Hosp. 2017-06 338,4 488,00 -0,2% 4,1% 24,2% -35,18 1,71 15,84 4,65 16,73 1,26 -2,6% -4,9% 0,00 0,0%

Albena 2017-03 141,2 64,64 0,6% 5,2% 29,3% 17,55 0,59 7,96 2,80 12,57 1,68 2,6% 3,4% 0,45 0,7%

Shipping

Atlantska Plov. 2017-06 80,6 426,89 0,7% 51,1% 124,1% -90,68 1,07 6,41 4,50 11,96 7,15 -0,4% -1,2% 0,00 0,0%

Jadroplov 2017-06 7,7 34,92 2,7% -14,3% 62,0% -0,91 0,20 -1,09 4,97 81,77 71,68 -8,3% -21,5% 0,00 0,0%

Uljanik Plovidba 2017-06 12,0 153,01 7,8% -4,4% 11,8% -2,85 6,42 23,47 6,28 12,70 11,71 -2,6% -224,7% 0,00 0,0%

TNG 2017-06 79,4 67,23 0,0% -10,4% -6,6% 18,00 0,94 6,58 4,28 10,44 5,45 2,4% 5,2% 1,60 2,4%

Telecommunications

HT 2017-06 2.004,3 181,00 0,3% 7,1% 26,7% 16,03 1,22 6,24 1,69 4,40 -0,92 6,2% 7,6% 6,00 3,3%

Telekom Slo. 2017-03 542,4 83,00 1,2% 16,7% 14,9% 13,60 0,76 2,54 1,14 4,05 1,31 2,9% 5,6% 5,00 6,0%

Infrastructure

Luka Ploce 2017-06 29,7 520,00 0,0% -8,9% -13,0% -10,48 0,54 -11,76 0,26 -3,47 11,00 -4,5% -5,1% 0,00 0,0%

Luka Rijeka 2017-06 89,3 48,98 0,0% 2,2% -0,9% 34,21 0,93 72,90 3,49 29,08 -5,80 2,3% 2,7% 0,00 0,0%

Luka Koper 2017-03 455,0 32,50 1,4% 30,0% 41,4% 9,83 1,31 5,90 2,70 7,08 1,20 8,9% 13,3% 0,96 3,0%

Aerodrom N.T. 2017-03 381,1 1.326,00 -0,5% 14,7% 26,9% 14,19 1,65 10,54 5,35 9,17 -0,83 10,4% 11,6% 60,25 4,5%

Food

Viro 2017-06 66,9 357,01 0,0% -6,8% 12,6% 6,46 1,02 9,56 0,74 6,81 3,40 5,6% 15,8% 0,00 0,0%

Jamnica 2016-12 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Cakovecki Mlin. 2017-06 85,2 6.000,00 -2,4% -7,1% 11,1% 9,97 1,03 6,37 0,45 5,74 -0,80 6,8% 10,3% 105,00 1,8%

Kras 2017-06 85,7 461,31 -2,9% -14,5% -9,7% 23,40 0,98 10,26 0,94 10,07 3,33 2,3% 4,2% 8,50 1,8%

Ledo 2016-12 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Belje 2016-12 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Atlantic Grupa 2017-06 371,1 823,00 0,0% -6,9% 1,0% 14,92 1,32 5,95 0,82 8,49 2,96 3,4% 8,9% 13,50 1,6%

Sojaprotein 2016-12 35,1 281,00 -6,0% -54,5% -59,3% -10,92 0,36 -2,13 0,52 10,04 6,20 -1,6% -3,3% 0,00 0,0%

Retail

Tisak 2016-12 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Medika 2017-06 61,4 15.050,00 -2,9% -12,4% 5,6% 7,12 0,92 -34,20 0,27 8,22 3,12 2,9% 12,9% 0,00 0,0%

Mercator 2016-09 213,2 35,01 0,0% -48,5% -52,0% -83,17 0,33 4,20 0,43 10,27 8,27 -0,1% -0,4% 0,00 0,0%

Petrol 2017-03 780,6 374,15 -0,2% 15,1% 35,8% 10,44 1,27 6,39 0,29 8,19 2,86 5,2% 12,2% 14,00 3,7%

Company




Change

M. Cap( EURm)






IC MARKET ESPRESSO


Company




Change

M. Cap( EURm)


Diversified

Adris Grupa 2017-06 1.122,5 453,99 0,2% -0,5% 12,8% 16,05 0,83 N/A n/a n/a n/a 2,6% 5,2% 17,00 3,7%

Podravka 2017-06 306,1 317,90 0,9% -16,2% -11,5% 19,33 0,77 4,80 0,81 9,04 2,93 2,3% 4,0% 7,00 2,2%

Industrial Capital 2017-03 30,3 3,82 -3,7% -12,7% 19,6% 3,64 0,47 3,03 0,16 1,10 -0,95 10,6% 13,0% 0,00 0,0%

Industrial Hold. 2016-09 41,0 1,04 0,5% 1,5% 34,8% -6,97 0,28 4,89 2,04 18,81 10,77 -2,6% -4,0% 0,00 0,0%

Stara Planina 2017-03 92,3 8,60 1,2% 32,5% 122,8% 10,07 1,05 6,57 0,94 5,84 0,00 8,8% 10,4% 0,22 2,5%

Holding Varna 2017-03 89,9 33,60 3,1% 1,8% 46,1% 169,98 0,96 16,77 7,19 43,73 22,02 0,3% 0,6% 0,00 0,0%

Chimimport 2017-03 232,4 1,90 2,2% 13,6% 58,1% 6,31 0,28 1,25 N/A N/A N/A 0,9% 4,4% 0,00 0,0%

Eurohold 2017-03 80,1 1,23 -3,8% 88,4% 70,6% 18,56 1,06 -8,56 0,35 59,48 33,80 0,7% 5,7% 0,00 0,2%

Stock Exchange

BVB 2017-06 57,3 34,20 -1,2% 17,9% 33,6% 23,38 2,48 23,18 5,87 17,82 -3,12 6,0% 10,6% 0,92 2,7%

NAVPS Dividend Div. YldLast

availab. FS Last price Day YTD 1YM. Cap

Change

Disc. to NAV (3Y) ROA(%) ROE(%)


Disc. to NAV (curr)

Disc. to NAV (1Y)P/E P/BV

Funds / REIT's

Fondul Propriet. 2016-12 1.918,9 0,87 0,3% 22,7% 25,0% 20,06 0,78 1,22 -28,2% -26,5% -25,5% 3,9% 3,9% 0,05 5,7%

Bulgarian REIT 2017-03 24,4 2,37 -2,3% 4,3% 20,7% 17,57 0,67 N/A N/A N/A N/A 3,1% 3,8% 0,00 0,0%

Adv. Terra. REIT 2016-09 100,1 2,30 0,0% 10,0% 14,4% 25,22 0,87 N/A N/A N/A N/A 3,3% 3,5% 0,10 4,3%

Dividend Div. Yld

Change

Last availab. FS Last price Day YTD 1Y Leverage

Loans vs. Deposits

M. Cap(EURm) P/E P/BV ROA(%) ROE(%)

NII / assets

NF&CI / assets


Banks

ZABA 2017-06 2.338,4 54,00 -0,3% 0,0% 27,3% 15,42 1,00 7,14 87,0% 2,8% 1,1% 0,9% 6,5% 5,30 9,8%

PBZ 2017-06 1.962,9 761,00 -0,3% -1,0% 22,7% 10,64 0,99 5,55 88,5% 3,2% 1,6% 1,7% 9,3% 25,33 3,3%

AIK Banka 2016-06 147,0 1.800,00 0,0% 2,9% 2,9% 3,73 0,32 3,21 78,1% 4,0% 0,5% 2,6% 8,5% 0,00 0,0%

Komercijalna B. 2016-12 267,0 1.900,00 0,0% 9,3% 35,7% -5,10 0,54 7,23 59,1% 3,4% 1,2% -1,5% -10,5% 63,00 3,3%

Banca Transil. 2017-06 2.332,9 2,46 -0,2% 22,8% 22,8% 8,13 1,63 8,17 73,7% 3,4% 1,1% 2,5% 20,1% 0,06 2,4%

BRD 2017-06 2.119,1 13,92 0,6% 17,2% 31,3% 8,57 1,40 7,63 73,0% 3,1% 1,4% 2,1% 16,4% 0,73 5,2%

CCB 2016-12 112,7 1,95 1,2% 27,3% 90,6% 8,57 0,56 13,07 55,1% 2,3% 0,9% 0,5% 6,5% 0,00 0,0%

FIB 2017-03 306,5 5,45 -1,8% 62,7% 138,2% 6,53 0,68 10,36 64,8% 3,3% 1,0% 1,0% 10,4% 0,00 0,0%

Dividend Div. YldP/ELast

availab. FS Last price Day YTD 1YM. Cap(EURm)

Net margin ROA(%) ROE(%)P/BV P/GWP Leverage

Combined Ratio

Insurance

Sava Re 2016-12 275,5 16,00 2,6% 21,0% 9,7% 8,4 0,9 0,6 5,6 -24,6% 6,2% 2,0% 11,1% 0,80 5,0%

Triglav 2016-12 609,6 26,82 0,2% 15,6% 10,8% 7,4 0,8 0,7 4,8 92,5% 7,8% 2,3% 11,1% 2,50 9,3%

CO 2017-06 323,3 5.565,00 0,0% 0,3% 1,2% 10,9 0,9 0,8 4,0 96,0% 6,5% 2,0% 8,1% 112,00 2,0%



Common Common

HOLD 604,00

Preferred Preferred

BUY 512,00

Fondul

Proprietatea

23 March

2016

STRONG

BUY0,99 0,87 13,5%

-managed by Franklin Templeton, a top class

fund management company

-high exposure to energy sector

-significant discount to NAV

-about 60% of the fund's NAV is made by

unlisted companies

-possible privatizations of portfolio

companies

Đivo Pulitika

AD Plastik

Group167,25 -100,0%

- stable dividend payment

- Edison projekt and recovery in Europe

- presence in Russia

89,32

- consolidation of suppliers in the

automotive industry

- exposure to cyclic automotive sector

14 July

2015

BUY

- attractive dividend yield

- Standard & Poor’s "A-" rating

with stable outlook

Triglav

Group

29 June

2017

UNDER

REVIEW

BUY 29,78

NIS

Group

9 September

2015683,00 -100,0%

- attractive valuation in relation to peers

- high domestic market share

- potential for development outside Serbia

- lack of transparency

- macroeconomic pressures

- dependence on oil prices

and refining margins

7,6%

- stable structure of debt

- risk of permanent competitive

pressure on prices

Margareta Maresic

Group

Telekom

Slovenije

1 October

201583,00

UNDER

REVIEW

Đivo PulitikaBUY 954,34

- restructuring of operations in progress

- risk of a large number of litigations

- leading regional insurer

- potential for further expansion

in Ex-Yu countries

- one of the largest hospitality groups

- multi-destination portfolio in key Adriatic

regions, Istria and Dubrovnik

- quality brand/product portfolio

- strong position on Ex-Yu markets

- strategic alliance with Panasonic

Đivo Pulitika

Đivo Pulitika

Đivo Pulitika

6,20 -21,0%

26,82 11,1%

- lack of economies of scale

- dependence on input prices as well as

currency translation differences

- potential expansion of the

accommodation portfolio via M&A

- dependence on tourism development

Đivo Pulitika

STRONG

BUY4,90

BUY 48,00

25,66 32,50

23 February

2016374,15 -6,4% Đivo Pulitika

Krka Group7 January

201555,00 -100,0%

- exposure to new markets (Russia)

- dual listing in Warsaw

- ownership restructuring

- strong retail player

- strong fundamentals

- continuing sales growth

despite crisis effects

- stable cash flow

- high level of debt

STRONG

BUY350,06

UNDER

REVIEW

Recommend-

ationTarget price Last price Difference

-11,1%

-16,8%

11 July

2016823,00 16,0%

11 May

2015SELL 1017,10 1.223,01

Investment Thesis

- large share of foreign sales

- substantial cost-cutting potential

- divesting as a profitability

growth opportunity

- moderate level of debt

- strong cash position

- large investments in tourism portfolio

expected to increase RevPAR and returns

- further restructuring and economic

recovery expected to propel the insurance

business

Analyst

Đivo Pulitika

Končar

Group733,00 7,3%

03 August

2015BUY 786,87

Ericsson

Nikola Tesla

CompanyLast

research

Adris Group20 December

2016

543

Đivo Pulitika

Podravka

Group

31 July

2015

Hrvatski

Telekom181,00

317,90

29 January

2016

Đivo Pulitika

453,99 12,8%

-100,0% Đivo Pulitika

11,2%

- weak revenue growth potential

- profitability above peer

group's average

- dividend player

- low level of debtBUY 160,95

UNDER

REVIEW

Valamar

Riviera

27 April

201744,45 8,0%

- historically inconsistent strategy related to

often changes in management

- future capacities rely on strong CAPEX and

Slovenia's investments in railway

Đivo Pulitika

- high return on equity

- largest dividend yield

on Croatian market

- foreign markets as an opportunity

- high dependence on government deals

- best in the class standards of corporate

governance

- continuing profitability improvements

- strong presence in the region

- diversified product portfolio and vertically

integrated business mode

- growing presence in Eastern

European markets

- dependence on telco investments

- majority stake owned by

the government

- profit margin presssure

Đivo Pulitika

Atlantic

Grupa

Đivo Pulitika

Petrol Group

Luka Koper13 October

2015BUY -21,0%

- attractive valuation compared to peer port

operators

- recovery of regional economies and their

trade with the rest of the world

Đivo Pulitika

Đivo Pulitika

Tankerska

Next

Generation

24 August

2016HOLD 65,00 67,23 -3,3%

- dislocation of refineries

- experienced fleet manager

- attractive cost structure compared to peers

- possible asset play

- stable earnings due to time charters

- complete exposure to a single market

segment

Gorenje

Group

17 November

2015

Sava Re

Group

30 November

2015

STRONG

BUY17,22 16,00 7,6%

-successful integration of Zavarovalnica

Maribor

-growth opportunities in the regional

insurance markets

-possible interest rate hikes

-absence of major loss events pushes up

results for now

Đivo Pulitika

Overview of Investment Recommendations

InterCapital Research Coverage Universe

IC MARKET ESPRESSO




About us

InterCapital Group

IC MARKET ESPRESSO


InterCapital is an independent investment company established in 2001, and is one of the leading companies fortrading of financial instruments, asset management and investment banking services in the Republic of Croatia.Our mission is to further advance the ongoing development of our domestic capital markets through the introduction and implementation of innovative financialproducts, know-how and sophisticated international standards in financial mediation services. In doing so, we aim to provide superior returns to our diverse customerbase. Experience, knowledge, dedication, reputation and ethical conduct are at the heart of our business. These characteristics are uncompromisingly embedded in eachof our employees, ultimately guaranteeing professional quality and dedication in our approach to clients, our product portfolio and overall mission achievement.The InterCapital Group is headquartered in Zagreb and employs more than 40 individuals.

Our services:

BROKERAGE SERVICES (tel: + 385 1 48 25 896, mail: [email protected])We specialize in offering of full service brokerage services to foreign and domestic institutional clients & HNWI with expert knowledge in trading with financialinstruments who desire to trade in significant volumes. Becoming our client enables you to trade securities listed on domestic stock exchanges, as well as securities andfinancial derivatives traded in global markets. Our online trading platform, IC.trader, enables fast and direct access to domestic and international markets and offers realtime monitoring and trading with financial instruments on both the Zagreb Stock Exchange and the majority of stock exchanges worldwide.

FIXED INCOME DEALING (tel: + 385 1 48 25 854, mail: [email protected])InterCapital Securities is the top fixed income trader according to bond trading volume on Zagreb Stock Exchange fourteen years in a row. Services offered by thecompany include market making on Croatian government bonds, as well as trading Croatian, Serbian, Slovenian, Romanian and Bulgarian fixed income instruments. Ourspecialties also encompass research services covering MM and FI markets (both domestic and international), providing expert opinions and developing trading ideas inclose cooperation with our clients.

ASSET MANAGEMENT (tel: + 385 1 48 25 868, mail: [email protected])Extensive investment experience in the regional and global financial markets has enabled us to develop most advanced tailor-made asset management solutions. Ourreputable market position has been built on the foundation of long-term and personal relationships with every single client. Whether we are dealing with wealthyindividuals, corporations or institutional investors, our approach to managing their assets is rooted in thorough understanding of their unique needs and constraints. Foreach one of those clients we offer a broad range of products, including both UCITS and alternative funds as well as discretionary asset management.

INVESTMENT BANKING (tel: + 385 1 48 25 866, mail: [email protected])Investment Banking helps companies improve their competitiveness by defining and implementing optimal financial strategies, which is a prerequisite for survival intoday’s dynamic business environment. As a highly specialized segment of the financial services industry, investment banking requires expertise of local financialmarkets, knowledge of specific needs facing companies and capabilities in structuring and executing optimal solution(s) with the end goal of creating new value for theclient. Our investment banking activities are divided into two streams:

➢ financing through the capital markets (debt issues (commercial papers & bonds) and equity issues (public and private equity offerings), as well as official marketlistings

➢ financial advisory services (mergers and acquisitions, financial analysis and company valuations, due diligence services, business restructurings and spin-offs,MBO and ESOP programs)

INSURANCE BROKERAGE (tel: + 385 1 54 96 166, mail: [email protected])InterCapital Risk is specialized in obtaining advanced insurance and reinsurance solutions not only on domestic insurance market but also on established markets likeLloyd’s of London, Bermuda etc. Managing operational risks and insurance brokerage is our core business, while courtesy, innovation and professionalism are the driversof our business philosophy. Although InterCapital Risk is a new insurance brokerage and risk management operation on the market, its employees are proven specialistsin this business with considerable success records.

CUSTODY SERVICE (tel: + 385 1 48 25 844/845, mail: [email protected])With the continued monitoring of our clients’ needs and investing in the development of new and increasing the quality of existing services, we have developed asecurities custody service. InterCapital offering its clients trading on the domestic, as well as on foreign stock exchanges, enables to simultaneously perform followingservices:

➢ payment and settlement of securities in the world’s leading markets;➢ storage and safekeeping of securities in various global depository;➢ managing investment positions with maximum professionalism and discretion;➢ continuous reporting to clients;➢ collection of inflows generated from interests, dividends and other income relating to assets in the custody account and monitoring of other corporate actions.

These services can be achieved with the minimal additional time and administration, as well as maximum flexibility and support ofour professional employees. Software support is achieved through the incorporation of custodial services through IC.trader trading platform.


mailto:[email protected]








Notice to Investors and Explanation of Investment Recommendations

Disclaimer

IC MARKET ESPRESSO

„IC Market Espresso“ is a Recommendation that proposes investment strategy in terms of one or more financial instruments or the Issuer offinancial instruments, including opinions about current or future value and price of these instruments. Market Espresso is published every workday.The first issue was published on 2 January 2008, while the technical analysis of Croatian equities and index was introduced on 1 September 2008.Information in this report is intended for informative purposes only and does not represent the solicitation to buy or sell any financial instruments orparticipate in any particular trading strategy.

Market Espresso is based on publicly available information (Stock Exchanges, Bloomberg, financial reports of Issuers, companies' management,business and other websites). Although we believe our information and price quotes to be reasonably reliable, we do no guarantee their accuracy orcompleteness. In addition, the price or value of financial instruments described in this report may fluctuate and realize gains or losses. InterCapitalSecurities Ltd. does not assume responsibility for any damage caused by the use of published information and projections contained in this reportOpinions in this report constitute the current judgement of the author/s as of date of this report and are subject to change without notice.

Recommendations in IC Market Espresso are based on fundamental analysis and instruments and rules of technical analysis. Technical analysis is avaluation method of financial instruments made by analysing statistically generated market activities such as historical prices and trading volumes.Technical analysis usually uses various types of graphical displays, on the basis of which special techniques try to predict future trends. The maintask of technical analysis is to attempt to identify historical price movements and accordingly identify possible future trends.

Fundamental analysis is a financial analysis of industries and companies based on factors such as sales, assets, profit, products or services,markets and management. In conducting fundamental analysis, InterCapital Securities Ltd. uses various methods to determine a value of the Issuer.Among the rest, analysis of comparable companies, discounted cash flow and other methods are being used. Although InterCapital Securities Ltd.uses models generally accepted in the financial industry and theory, the results of these models depend on plans and information obtained from theIssuer as well as subjective opinions of analysts.

The authors of technical and fundamental analyses in IC Market Espresso are Đivo Pulitika, Margareta Maresić and Marcel Dimač. They areemployees of InterCapital Securities Ltd. registered in Zagreb, Masarykova 1. InterCapital Securities Ltd. is supervised by Croatian Financial ServicesSupervisory Agency (HANFA).

Fundamental rating values of an Issuer are given according to the following scale:

•Strong buy - equities with expected absolute revenue of more than 20% in the monitored time period•Buy - equities with expected absolute return of 10%-20% in the monitored time period•Hold - equities with expected absolute return of -10% to 10% in the monitored time period•Sell - equities with expected absolute return below -10% in the monitored time period•Under review - an issuer might be placed Under Review due to new information which is not included in the analysis.

Up to August 14, 2014 the Hold recommendation was used for equities with an expected return of 0% to 10%, while the Sell recommendation wasused for equities with an expected negative absolute return. Criteria for other recommendation remained unchanged.

InterCapital Securities Ltd. is in possession of the following equities:

Analysts engaged in creation of IC Market Espresso and/or related persons are not in possession of significant financial interests in one or morefinancial instruments which are subject to recommendation or significant conflicts of interest in relation to any of the issuers in accordance withArticle 475 of the Capital Market Act.

The company InterCapital Securities Ltd. acts as a market maker for ADPLRA ZA, PODRRA ZA, HTRA ZA, KOEIRA ZA, ATGRRA ZA, ARNTRA ZA andRIVPRA ZA.

Issuer recommendations stated in IC Daily - Market Espresso are not declared to the Issuer before they are published.

Any investments indicated in the report constitute risk, are not readily available in all jurisdictions, can be illiquid and may not be suitable for allinvestors. Value or income realized on any one investment mentioned in the report may vary. If a financial instrument is denominated in a currencyother than an investor's currency, a change in exchange rates may adversely affect the investment. Past performance is not necessarily indicative offuture results. Investors must make their own informed investment decisions without depending on this Recommendation. Only investors withsufficient knowledge and expertise in financial dealings who are able to evaluate risk and return may consider investing in any form of securities ormarkets indicated herein.

Protection of copyright and data base contained in this Recommendation is of great importance. The report may not be reproduced, distributed orpublished by any person for any purpose without prior consent given by InterCapital Securities Ltd. Please cite source when quoting. All rights arereserved.

Number Share

Companies which InterCapital Securities Ltd.

provided investment banking service within

last 12 months

Strong Buy 4 21,1% -

Buy 6 31,6% ATGR-R-A

Hold 3 15,8% -

Sell 2 10,5% -

Under Review 4 21,1% ADPL-R-A

2Q 2017 (1 April - 30 June 2017)

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