Western Balkan Equities: BELEX15 Underperformance To Continue

Our outlook for Western Balkan equities remains firmly negative despite Croatia's CROBEX, Serbia's BELEX15 and Bulgaria's SOFIX equity indices all having experienced short-term bounces as we had expected. These three economies are highly exposed to the macroeconomic headwinds prevailing from Western Europe - we expect the eurozone bloc to contract on aggregate by 0.3% in real terms and European banks to continue deleveraging and divesting to build capital buffers -combined with the compositions of these stock exchanges, we see little potential for a strong recovery in share prices in the coming months.

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