So far this year, Central Europe is showing the stock market the colors of the rainbow. Shares in the region have managed to earn almost twenty-two percent for investors since January, according to the Central European CECE index, which maps the development of almost three dozen of the most important titles from the center of the continent. The region, chronically undervalued by the stock market, has thus left all of Wall Street behind since January, and over the past year, the bet on Central Europe has come close to the profits of American legends from the big tech sector. Among other things, investors heard about the high dividend yield of local shares, from which the war shadow of the Ukrainian front practically disappeared. Not only that, but it also favors these markets for the coming months.
“This is a correction of the very unfavorable performance from last year, when the region lagged behind due to the war in Ukraine, but also partly due to the sectoral structure of the market in the region, which is mainly composed of titles profiting from high energy prices and high interest rates,” says portfolio manager Amundi Petr Hare. Compared to Europe as a whole, the Central European region has an almost fourfold performance lead this year.
However, the region also scored with the strength of its currencies, which are attractive to investors thanks to high interest rates. “The strengthening of local currencies played a significant role, especially in the case of the Polish zloty and the Hungarian forint,” adds Zajíc. At the same time, both of these markets are celebrating the greatest successes in the region. The WIG20 index of the Warsaw Stock Exchange and the Hungarian BUX, with growth of more than a third over the past year, are respectively the seventh and eighth best-performing stock exchanges in the world, even without taking into account the appreciation of the currencies of both countries.
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2023-09-01 15:00:00
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