Slovenian Weekly Report 18.9.2017-22.9.2017
We have prepared an Slovenian economic and business overview for the last week.
Small shareholder association Gorenje (Društvo delniÄarjev GRVG) addressed Gorenje shareholders regarding their insight about the company. They believe:
- the company is not disinvesting non-core and deleveraging enough;
- consequently debt increased YoY while the company is eroding its equity;
- and that therefore Gorenje could eventually end up as Cimos and Mercator in severe financial distress needing capital injection.
- While 1H17 results of Gorenje Group are in-line with their guidance and possibly 2017 Gorenje could surpass our estimates, the fact is that our estimates are somewhat grim in terms of cash flow generation. Therefore our long stance is that this needs changing – through increased margins – or the fate is grim.
- While our stance on the shares is HOLD, the fact is that its risk profile is elevated and we see better picks on the Slovenian market.
UMAR upgraded GDP growth expectations for 2017 and 2018 to 4.4% and 3.9% respectively. Together with Slovenian Basketball team winning the European Championship it seems Slovenia is in a sweet spot.
The referendum participants voted for the new legislature regarding second railway tier (53.5% voted for; 46.5% against), which is even a slight surprise, but as expected the attendance was not strong enough for this referendum to even count (only 20%). This means the second railway tier project will continue, however it’s opponents will now try to block it through other legal procedures. Likely this project will continue to be a hot topic in the next year as well.
ALTA Invest, investicijske storitve, d.d., (ALTA Invest, investment services, Inc.) is a part of ALTA Group, the biggest financial non-banking group in Slovenia. ALTA Invest has around 28% market share on the domestic Ljubljana Stock Exchange and has more than EUR 95m of assets under management.
Our trading advantage is our execution of large trading blocks with low impact on the market. We offer trading on several platforms on numerous markets, with a wide variety of financial instruments. Our advantage is also a research department, which is both sell side and buy side and has the far most extensive and regular coverage of domestic companies. We cover 9 companies on Ljubljana Stock Exchange, which is around 90% of Mcap on LJSE – and here we are practically the only local broker providing this kind of extensive and regular coverage for Slovenian companies.
A part of ALTA Group are ALTA Skladi, a mutual fund asset management company with roughly EUR 260m of asset under management. ALTA Group is also extensively involved in corporate finance projects and raised considerable assets (fixed income and equity) in the last two years for several companies.
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