Theme of the Day:Sector Rotation Analysis of European and US Stocks

Bond, Money and Currency Markets:Croatian 1-Year T-Bill YTM Drops to Another Record Low of 0.60%

Croatian Equity Market:Sales per Employee Among CROBEX10 Companies

Regional Equity Market:Gorenje to Renew Attempts of the Sale of Subsidiary Gorenje Surovina

Global Equity Market:Trump's Executive Orders Send Equities Higher on Tuesday

Technical Perspective - Region:HTRA ZA - Resistance @ 178,50

Technical Perspective - Global:DAX - Resistance @ 11635

IC Daily Highlights

•[CROATIA] MF issued HRK 928m of T-bills, average yield at 0.6%•[SLOVENIA] Gorenje will renew attempts to sell waste management subsidiary GorenjeSurovina, according to media•[SLOVENIA] EUR 0.34m worth of Cinkarna Celje [CICG SV] shares traded as block•[BULGARIA] In Dec 2016, loans to non-gov sector amounted to 55.6% of GDP (+1.5% YoY)•[BULGARIA] Trace Group Hold's subsidiary has signed a contract as a recipient of BGN 700k grant under the Operational Programme "Innovation and competitiveness" 2014-2020

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

25 January 2017

Quote of the Day:„If you would be wealthy, think of saving as well as

getting.”

Benjamin Franklin

Ivan DražetićMoney Market and Fixed Income, DealerPhone: + 385 (0)1 4825 852E-mail: Ivan.Drazetic@InterCapital.hr

Kristina PukšecHead of Fixed Income and Money MarketPhone: + 385 (0)1 4825 854E-mail: Kristina.Puksec@InterCapital.hr

IC.traderInterCapital.hr1

Đivo PulitikaAnalystPhone: + 385 (0)1 4825 867E-mail: Divo.Pulitika@InterCapital.hr

Croatia I Slovenia I Romania I Bulgaria I Serbia

Margareta MaresićJunior AnalystPhone: + 385 (0)1 4825 857E-mail: Margareta.Maresic@InterCapital.hr

Renata ČempuhHead of Front OfficePhone: + 385 (0)1 4825 890E-mail: Renata.Cempuh@InterCapital.hr

Danijel DelačHead of BrokeragePhone: + 385 (0)1 4825 894E-mail: Danijel.Delac@InterCapital.hr

Filip MajićBrokerPhone: + 385 (0)1 4825 896E-mail: Filip.Majic@InterCapital.hr

Marin OnoratoMoney Market and Fixed Income, DealerPhone: + 385 (0)1 4343 180E-mail: Marin.Onorato@InterCapital.hr

Marcel DimačJunior AnalystPhone: + 385 (0)1 4825 858E-mail: Marcel.Dimac@InterCapital.hr

Date Announcement

20-Feb-17 Petrol - FY 2016 results

23-Feb-17 TLSG - FY 2016 (prelim.)

28-Feb-17 ATGR - Non-audit FY 2016 results

9-Mar-17 ZVTG - Non-audit FY 2016 results

10-Mar-17 GRVG - Non-audit FY 2016 results

15-Mar-17 CICG - Non-audit FY 2016 results

21-Mar-17 TLSG - Annual Report 2016

31-Mar-17 ATGR - FY 2016 results

6-Apr-17 ZVTG - FY 2016 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

-20%

-10%

0%

10%

20%

30%

40%

Cyclicals Technology Industrials Materials Energy Cons.Staples

Health Care Utilities Financials

PX chg. HY PX chg. 1Y

Sector Rotation Analysis of European and US Stocks

Theme of the Day

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

Performance of European sector indices in half-year and one year

Performance of US sector indices in half-year and one year

Sector and business cycle

Late Expansion

Early Contraction

Late Contraction

Early Expansion

Middle Expansion

Cyclicals

Technology

Industrials

Materials Energy

Cons. Staples

HelathCare

Utilities

Financials

At different points of the economic cycles, stock prices of companies in some sectors will rise faster than stock prices of companies in other sectors.

The results suggest that the economies of Europe and the US are in the state between the Middle and Late expansion.

Source: Bloomberg, InterCapital

Today we are going to take a look at the European and US sector performances that can give us an insight into the current state of the European andUS economy. Because stock prices reflect expectations about the future corporate earnings, the stock market is usually a leading indicator of thebusiness cycle. The stock market usually turns down before a recession hits and begins to rise in anticipation of an economic recovery. This occursas investors anticipate the changes in the cycle and move their assets in safer industries of which they expect better results. So theoreticallyspeaking, at different points of the economic cycles, stock prices of companies in some sectors will rise faster than stock prices of companies inother sectors. The first graph shows these relationships and the order in which the various sectors should get higher returns. For calculation ofsector performances we have used STOXX sector indices for Europe and S&P 500 sector indices for the US.

When money starts to move into the industries of cyclical goods (cars, real estate etc.) this is the first sign of economic recovery after a deeprecession and suggests that the market is set for another bull run. Then follow the Technology stocks and shortly after come the stocks of the basicmaterial producers and energy industry. The peak for the market comes when capital starts to turn from energy to consumer staples. This is a signof a high inflation and that commodity prices are starting to hurt the economy. At this stage, the Fed starts to rise interest rates and the yield curvesteepens which consequently improves profitability of banks so the financials become more attractive choice for investors.

According to the results of the sector analysis, we could say that the economies of Europe and the US are in the state between the Middle and Lateexpansion. However, one should keep in mind that there are no two business cycles alike, thus the stock market does not always follow thesetypical pattern of sector rotation.

-20%

-10%

0%

10%

20%

30%

40%

Cyclicals Technology Industrials Materials Energy Cons.Staples

Health Care Utilities Financials

PX chg. HY PX chg. 1Y

Croatian 1-Year T-Bill YTM Drops to Another Record Low of 0.60%

Bond, money and currency markets

IC MARKET ESPRESSO

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

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 3 IC.traderInterCapital.hr

Yesterday’s Croatian treasury bill auction went by with some HRK 668m maturing andbrand new HRK 928m being issued @ 0.60%. Interestingly enough, the current amountoutstanding of Croatian T-bills amounts to HRK 17.1bn, while at the last auction inJanuary 2016 it stood firmly at HRK 19.0bn, i.e. a contraction in size of HRK 2bn isevident in spite of the record high liquidity in the system. The lowest bid handed over tothe Ministry of Finance printed 0.44%, an indication that in the near future the short-termyield might go even further down. The same yield applies to 1Y implied yield on EURHRKforward points (HREUI1Y CMPN Curncy on Bloomberg). Speaking about the future, thenext auction will probably take place on January 30th, i.e. next Tuesday, since there areHRK 626m on maturity next week.

First T-bill auction in 2017 (January 3rd) printed some 0.64%, while the T-bill issued ayear ago yielded 1.35%, which reflects sharp drop of short term yields in Croatia which isnot a surprise considering yield trends in the region but also reflecting all-time highexcess liquidity in Croatian financial system. It is interesting that Croatian bond RHMF-O-17BA maturing for exactly 10 months was traded yesterday right before the auctionat 104.63 (0.64% in yield) while after the auction best bid and ask were at 0.91% and0.56%, respectively. Despite of the downward trend of short term yields, it can be seenthat the longer part of the Croatian LCY yield curve is in “stand by” mode, waiting for theissuance of new Croatian sovereign HRK bond. HRK 5.5bn bond is maturing on February8th so for the next two weeks Croatian bond market could be marked with preparationsfor the auction mentioned.

Source: Ministry of Finance, Intercapital

INDICATOR CRO SLO SRB ROM BULGDP (YoY, %) 2,9 2,7 2,6 4,3 3,2ten-year yield (%) 2,8 3,4 6,5 1,9 1,6CPI headline (YoY, %) 0,2 0,5 1,6 -0,5 0,1PPI (YoY, %) 0,0 0,5 2,2 -0,2 -0,6ind. Production (YoY, %) 7,1 7,4 1,3 1,5 4,3retail (YoY, %) 2,5 11,3 7,4 9,3 6,1unemployment (YoY, %) 14,8 7,6 16,9 4,8 8,0budget balance (% GDP) -1,3 -2,7 -1,7 -0,8 -1,7public debt (% GDP) 88,3 86,2 78,5 39,3 26,7

Macroeconomic indicators

bond curr. coupon price mid ytm

CROATIA

CROATI 18 EUR 5,875% 108,47 0,02%CROATI 22 EUR 3,875% 108,54 2,16%CROATI 25 EUR 3,000% 101,30 2,82%CROATI 17 USD 5,500% 101,09 1,85%CROATI 19 USD 6,750% 109,22 3,24%CROATI 20 USD 5,625% 110,05 3,52%CROATI 21 USD 6,375% 110,11 3,73%CROATI 23 USD 5,500% 107,16 4,17%CROATI 24 USD 6,000% 110,03 4,32%

SLOVENIA

SLOVEN 18 EUR 4,000% 104,90 -0,26%SLOVEN 18 USD 4,750% 103,50 1,98%SLOVEN 22 USD 5,500% 111,73 3,25%SLOVEN 23 USD 5,850% 113,77 3,40%SLOVEN 24 USD 5,250% 110,87 3,50%

SERBIA

SERBIA 17 USD 5,250% 102,40 2,26%SERBIA 18 USD 5,825% 105,15 2,99%SERBIA 20 USD 4,875% 103,01 3,83%SERBIA 21 USD 7,250% 113,55 4,03%SERBIA 24 USD 6,750% 101,53 6,49%

BULGARIA

BULGARIA 17 EUR 4,250% 102,09 -0,42%BULGARIA 22 EUR 2,000% 106,21 0,77%BULGARIA 24 EUR 2,950% 109,74 1,58%BULGARIA 27 EUR 2,625% 104,37 2,14%BULGARIA 35 EUR 3,125% 99,90 3,13%

ROMANIA

ROMANIA18 EUR 6,500% 109,14 -0,07%ROMANIA19 EUR 4,875% 113,18 0,12%ROMANIA20 EUR 4,625% 116,04 0,20%ROMANIA22 USD 6,750% 115,09 3,45%ROMANIA24 USD 4,875% 107,36 3,67%

Eurobonds

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

O/N 0,40% n.a. 2,99% 0,50%1M 0,53% -0,37% 3,34% 0,62%3M 0,65% -0,33% 3,45% 0,83%6M 0,76% -0,24% 3,68% 1,07%9M 0,83% -0,16% n.a. 1,15%1Y 0,96% -0,10% n.a. 1,23%

Interest rates

ask

local sovereign, currency clause

RHMF-O-19BA

RHMF-O-203E

RHMF-O-227E

RHMF-O-247E

local sovereign, HRK

RHMF-O-172A

RHMF-O-17BA

RHMF-O-187A

RHMF-O-203A

RHMF-O-217A

RHMF-O-257A

RHMF-O-26CA

0,88%

1,61% 1,33%

106,30 1,14%

05/03/2020 6,750% 115,50 116,40

10/07/2018 5,250% 105,90

123,00

1,41

25/11/2017

1,41

0,42%104,80104,406,250%

-0,30%

134,471,41% 1,14%

134,60

189,42

08/02/2017 4,750% 100,14 100,17

5,375% 111,00 111,80

5,750% 119,50 121,00

bench.

spreadbid ask bid bid ask

m. duration

2,64 2,65

4,74

2,801,50% 1,26% 2,80

4,732,31% 2,05%

ticker maturity couponprice ytm

10/07/2024

05/03/2020 6,500% 115,10 115,90

29/11/2019

22/07/2022 6,500% 121,50

0,45%

0,89%

218,05

4,18

6,21

0,81

0,03 0,03

0,81

4,17

2,79

6,192,83% 2,63%

2,78

103,40 2,11% 1,95%08/07/2021 2,750%

2,89% 2,74%113,20112,004,500%09/07/2025

102,70

7,09 7,11

8,12 8,1414/12/2026 4,250% 111,50 112,80 2,90% 2,76%

10,000

15,000

20,000

25,000

30,000

35,000

40,000

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

01/11 01/12 01/13 01/14 01/15 01/16 01/17

Vo

lum

e (m

io H

RK

)

Yiel

d (%

)

Croatian T-Bills (%)Volume

HRK 91 dan

HRK 182 dana

HRK 364 dana

Day YTD 1YLast

Price EV/S P/EEV /

EBITDANet debt / EBITDA ROE (%) Div. Yld

CROBEX* 0,0% 4,9% 31,0% 2.093 1,23 23,44 9,96 2,24 5,0% 2,5%

SBITOP 0,4% 3,2% 8,8% 740 0,54 11,77 6,39 2,15 7,7% 4,9%

BELEX15 -0,3% -2,6% 21,2% 699 0,82 28,36 5,68 0,61 2,5% 4,3%

BET -0,3% 2,6% 14,0% 7.271 1,03 16,24 3,33 -0,79 5,3% 7,4%

SOFIX 0,0% 3,2% 36,4% 605 0,95 12,71 7,59 1,47 5,0% 1,7%

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CRO Index

CRO10 Index

CROPLUS Index

Source: Bloomberg

[Slovenia – Gorenje – GRVG SV] According to the media statement, Gorenje intends torestart the process of sale of Gorenje Surovina, 100% owned company specialized in wastemanagement. In 2015, Gorenje Surovina recorded revenues of EUR 60m, EBITDA of 2.4mand 330 employees. This move is a part of Gorenje's strategy to focus on core business,while this sale is marked as the sole divestment process this year.

As a reminder, in April 2015, Gorenje signed an agreement to sell a 69.3% stake (wortharound EUR 20m assuming zero net debt) to the Polish peer Elemental Holding, but thedeal was terminated year later. Afterwards, there was an unsuccessful attempt ofPanasonic takeover which further postponed the sale of the subsidiary. Now, Gorenjeplans to sell the firm to the peers form Western Europe or US which would helpmaterialize subsidiary's plans to expand on Southeastern European market.

Yesterday, the Slovenian equity market reported the turnover of 1m, while SBI TOP roseby 0.38% with Triglav (+1.64%) and Telekom Slovenije (+1.12%) being the winners of theday among big SBI TOP constituents. The Bucharest stock exchange was closed yesterday,but Serbian BELEX continued its 3-day plunge decreasing yesterday by 0.28% mainly dueto NIS (-0.67%) which was not offset by Komercijalna Banka (+0.54%). In Sofia, SOFIXcontinued its anemic performance (+0.02%) but notable day from Monbat (-2%) andNeochim (+1.23%).

Gorenje to Renew Attempts of the Sale of Subsidiary Gorenje Surovina

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

Since there were no major news on the Croatian equity market, we decided to broader ouryesterday’s overview of the number of employees by putting it into the relation with thecompany’s sales. For this purpose we have used sales results and average number ofemployees on the last 12-month basis of CROBEX10 companies. Yet again we have topoint out that this should be seen just as an overview, as the industries in which thesecompanies operate have different level of work intensity and thus the results cannot bedirectly compared.

Compared to the average number of employees in last 12 months, HT had the highestsales per employee (EUR 193k). Next from the top are as follows: Atlantic Group (EUR131k), Ledo (EUR 126k), Koncar (EUR 101k) which is the only one with the values aboveEUR 100k (note that we only have the numbers for full time employees). Somewhat lowernumbers can be seen at Adris Group (EUR 95k), Podravka (EUR 87k) and Ericsson NikolaTesla (EUR 72k), Valamar Riviera (EUR 64k) and finally Imperial (recently acquired byValamar Riviera) and Kras (both with EUR 54k).

Sales per Employee Among CROBEX10 Companies

Croatian Equity Market

Index fundamentals

Daily market snapshot

Volume: EUR 1.34m

* 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

OMV Petrom 1,50 Ingra 7,76% Eurohold Bulgaria -3,57%

Banca Transilvania 1,29 Optima Telekom 3,96% Intereuropa -2,83%

Fondul Proprietatea 0,98 Atlantska plovidba 3,36% Metalac -2,78%

Komercijalna banka 0,30 Varteks 2,51% Monbat -2,00%

Electrica 0,22 Dalekovod 2,40% CB Central Cooperative Bank -1,79%

Krka 0,22 Stara Planina Holding 1,84% Duro Dakovic -1,61%

Romgaz 0,20 Zavarovalnica Triglav 1,64% CB First Investment Bank -1,47%

Transgaz 0,18 Koncar - elektroindustrija 1,48% OMV Petrom -1,38%

Zavarovalnica Triglav 0,16 Neochim 1,23% NIS -0,67%

Volume (EURm) Winners Laggards

Volume: EUR 1.01m

Volume: EUR 0.38m

Volume: EUR 0m

Volume: EUR 0.34m

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

CONSUMER DISCRETIONARY 0,8% 4,0% 2,6% 7,1% 3,8% 17,2% INDUSTRIALS 1,0% 2,0% 0,7% 11,5% 9,0% 30,9%

CONSUMER STAPLES 0,8% 2,1% 1,4% 0,5% -4,3% 8,4% INFO TECH 1,0% 4,6% 3,1% 4,5% 11,8% 27,4%

ENERGY 1,0% -1,4% -2,7% 6,5% 8,8% 37,3% MATERIALS 2,5% 5,7% 4,3% 12,5% 8,3% 40,4%

FINANCIALS 1,2% 0,0% -1,4% 18,3% 21,4% 37,8% TELECOM SERVICES -2,7% -3,6% -4,2% 8,6% -7,0% 12,6%

HEALTHCARE -0,7% 0,2% -0,7% -0,4% -7,8% 2,8% UTILITIES 0,0% -0,4% -0,6% -0,1% -8,1% 11,4%

day 1 Y YTD

North/South AmericaDOW JONES 0,57% 25,35% 0,76%

S&P 500 0,66% 21,47% 1,84%

NASDAQ 0,86% 23,96% 4,05%

S&P/TSX 0,84% 28,56% 2,11%

BOLSA 2,19% 16,09% 5,49%

BOVESPA 0,14% 73,12% 9,32%

MERVAL -0,53% 86,29% 14,48%

IPSA 0,40% 21,05% 3,00%

Asia/PacificS&P/ASX 200 0,38% 13,28% 0,10%

NIKKEI 225 1,43% 11,38% -0,30%

HANG SENG 0,32% 19,04% 4,65%

SHCOPM 0,22% 7,18% 1,48%

KOSPI 0,06% 9,16% 2,00%

TWSE 0,25% 19,68% 2,10%

SET 0,31% 24,93% 2,64%

BSE SENSEX 30 0,55% 12,42% 3,38%

Africa/Near East/RussiaFTSE/JSE 0,81% 10,43% 6,69%

XU 100 -0,19% 19,15% 7,56%

Hermes -0,48% 112,78% 4,56%

Tel Aviv 100 0,56% -0,91% -3,37%

MICEX 10 0,28% 28,32% -0,76%

RTS 0,21% 69,87% 0,47%

Western EuropeDJ EURO STOXX 50 0,26% 9,32% -0,27%

FTSE 100 -0,01% 21,67% 0,11%

CAC 40 0,18% 12,03% -0,66%

DAX 0,43% 19,09% 0,99%

IBEX 35 0,89% 9,56% 0,38%

S&P/MIB 30 0,89% 4,60% 1,38%

SMI 0,21% -0,08% 0,33%

0,42% 25,49% 2,51%ATX

IndexChange (%)

U.S. equities rose on Tuesday, with materials spiking more than 2.5% on the back of moreexecutive orders from President Donald Trump.

The S&P 500 rose about 0.66%, notching intraday and closing records, with materialsleading eight sectors higher. Copper futures for March delivery rose more than 2%.platinum and palladium futures also advanced more than 2%.

President Trump signed executive orders that will make it easier for TransCanada tobuild the Keystone XL pipeline and for Energy Transfer Partners to build the finaluncompleted portion of the Dakota Access pipeline.

Entering Tuesday, the broader U.S. stock market has traded in a narrow range for over amonth, as investors wait for more details about Trump's political agenda, especiallycorporate tax cuts, deregulation and government spending. Equities had rallied sharplyfollowing the election on hopes that Trump's proposals would become law.

Trump's Executive Orders Send Equities Higher on Tuesday

Global Equity Market

IC MARKET ESPRESSO

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 5 IC.traderInterCapital.hr

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

AUTOMOBILES & PARTS 1,3% 3,6% 2,6% 13,1% 19,7% 17,3% INSURANCE 0,5% 2,3% 2,4% 6,1% 8,6% 8,3%

BANKS 0,9% 1,6% 2,2% 5,1% 12,1% 17,9% MEDIA 0,4% -1,8% -1,0% 5,9% -0,5% -3,2%

BASIC RESOURCES -0,8% -4,6% -3,5% -4,1% -9,7% -6,5% OIL & GAS 0,4% -1,8% -1,0% 6,6% 11,8% 31,2%

CHEMICALS 0,4% 1,4% 1,7% 7,3% 12,2% 16,2% REAL ESTATE 0,7% -1,9% -1,7% 8,9% 18,8% 4,0%

CONST. & MATERIALS 1,1% 2,1% 1,3% 14,5% 30,7% 13,2% RETAIL -0,1% -2,3% -1,6% -3,5% -10,6% -6,5%

CONSUMER GOODS -0,6% -1,7% -1,5% 7,1% 2,5% -4,1% TECHNOLOGY 3,0% 11,9% 14,9% 25,9% 43,5% 116,7%

FINANCIAL SERVICES -0,1% -0,4% 0,4% -2,4% -6,8% -2,3% TELECOM SERVICES -3,1% -2,3% -2,1% -3,4% -6,1% -13,9%

FOOD & BEVERAGE 0,6% 0,4% 0,7% 5,1% 3,6% 7,2% TRAVEL & LEASURE 0,4% 1,4% 1,7% 7,3% 10,3% 19,5%

HEALTH CARE -0,7% -3,3% -2,6% -0,3% -10,2% -8,3% UTILITIES -0,5% -2,9% -1,9% -0,1% 1,0% -3,6%

IND. GOODS & SERVICES 0,2% 1,9% 2,8% 4,2% 1,5% 8,5%

Today we are looking @ daily HTRA graph. After we saw test of resistance that provideshigh from 23/12/2013 @ 178,50 it goes downwards. First support provides high from14/04/2015 @ 170 + SMAVG50. RSI is in upward trend and is above 50 points.

HTRA ZA - Resistance @ 178,50 (daily chart)

Technical Perspective - Region

Today we are looking @ daily DAX index. It is testing resistance that provides high from23/06/2015 @ 11635. Next resistance provides psychological level @ 12000. Keyresistance provides high from 2015 @ 12390. RSI bounce from overbought but is stillabove 50 points.

DAX - Resistance @ 11635 (daily chart)

Technical Perspective - Global

We would be buyers around 168

Trading Suggestion:

We would be buyers in case resistance @ 11635 gets breached

Trading Suggestion:

Technical Targets:12390… high 2015

12000… psychological level11635… high 23/06/2015

11582… last11430… high 30/11/2015

11209… SMAVG5010802… high 15/08/2016

Technical Targets:179,50… high 2016

173,65… last170,00… high 2015169,46… SMAVG50

IC MARKET ESPRESSO

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 6 IC.traderInterCapital.hr

Selected Equity Fundamentals (Trailing Basis) & Performance

Regional Equity Market; Fundamentals of Selected Companies

IC MARKET ESPRESSO

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 7 IC.traderInterCapital.hr

Company

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

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

Industrial

Koncar 2016-09 257,2 750,00 1,5% 8,7% 19,0% 12,75 0,82 19,03 0,51 6,78 -2,46 4,1% 6,4% 12,00 1,6%

Ericsson NT 2016-09 221,9 1.249,91 -0,6% 7,4% 36,2% 18,78 7,11 9,24 0,96 10,46 -1,35 11,9% 37,9% 100,00 8,0%

Petrokemija 2016-09 30,3 17,65 -1,5% -1,4% 37,4% -3,22 2,22 14,75 0,45 19,12 14,31 -6,1% -69,0% 0,00 0,0%

Duro Dakovic 2016-09 45,7 45,17 -1,6% 0,1% 45,2% -10,25 -34,45 -4,86 1,35 786,99 378,01 -5,7% n/a 0,00 0,0%

AD Plastik 2016-09 78,4 139,98 0,0% 1,0% 48,8% 13,04 0,90 -19,82 0,98 7,44 2,79 3,4% 6,9% 12,00 8,6%

Gorenje 2016-09 155,1 6,35 -0,3% 5,9% 44,3% 28,01 0,43 2,53 0,45 6,24 4,51 0,5% 1,5% 0,00 0,0%

Cinkarna 2016-09 139,3 171,00 0,6% 5,6% 131,1% 13,76 0,95 14,56 0,68 4,58 -1,00 5,5% 6,9% 4,20 2,5%

Metalac 2016-06 28,8 1.750,00 -2,8% 3,8% 45,8% 8,23 0,79 7,32 0,50 5,14 0,36 5,8% 9,6% 155,00 8,9%

Jedinstvo 2016-06 9,7 3.945,00 0,0% -3,8% -19,5% 3,80 0,24 -1,26 0,06 0,58 -1,56 3,2% 6,3% 211,76 5,4%

Alfa Plam 2016-06 46,6 33.020,00 0,0% -5,7% 9,9% 8,71 0,87 6,36 0,71 5,50 -2,22 7,9% 10,0% 1.000,00 3,0%

Messer Teh. 2016-06 108,8 13.006,00 0,0% 0,0% 59,8% 3,39 0,81 7,07 1,01 2,52 -1,85 22,4% 24,0% 1.801,00 13,8%

Gosa Montaza 2016-06 4,9 2.350,00 0,0% -2,1% 47,8% 4,96 0,59 -28,22 -0,04 -0,45 -4,26 7,1% 11,9% 142,00 6,0%

Neochim 2016-09 82,8 61,00 1,2% 2,3% 43,9% 9,46 2,11 10,50 0,79 5,96 0,78 12,9% 22,3% 0,80 1,3%

Monbat 2016-09 195,4 9,80 -2,0% 1,4% 32,3% 17,12 2,04 -31,11 1,93 11,91 2,40 6,8% 11,9% 0,28 2,9%

MS Hydraulic 2015-12 133,8 6,70 0,1% 0,8% 35,4% 30,62 4,13 15,30 2,85 14,71 -0,83 11,7% 13,5% 0,22 3,3%

Fundamental indicators

Last availab. FS Last price

Change

M. Cap( EURm)

Utility

Electrica 2016-09 1.030,8 13,40 0,4% 1,8% 16,5% 11,89 0,71 8,00 0,49 2,82 -3,51 4,7% 6,0% 0,86 6,4%

Transgaz 2016-09 782,8 299,00 0,0% 1,7% 15,0% 7,61 0,98 6,45 1,57 3,53 -1,14 9,1% 12,8% 27,61 9,2%

Transelectrica 2016-06 486,5 29,85 0,2% 2,2% 8,5% 7,81 0,73 2,93 0,70 2,90 -0,22 5,5% 9,3% 2,65 8,9%

Janaf 2016-09 886,7 6.599,99 0,0% 24,5% 53,2% 23,74 1,83 13,69 8,35 10,90 -1,33 7,1% 7,7% 132,15 2,0%

Energy

INA 2016-09 4.283,7 3.213,02 0,8% 10,8% 21,0% -22,08 3,00 18,91 2,36 19,50 1,69 -7,2% -13,6% 0,00 0,0%

NIS 2016-09 979,0 744,00 -0,7% 0,5% 45,9% 10,69 0,63 3,66 1,19 6,35 2,87 3,1% 5,9% 24,69 3,3%

OMV Petrom 2016-09 3.589,7 0,29 -1,4% 9,2% 15,4% -20,11 0,61 3,60 1,01 3,19 0,05 -1,9% -3,0% 0,00 0,0%

Romgaz 2016-09 2.258,3 26,35 -0,6% 5,4% 10,5% 10,89 1,08 6,32 2,19 4,32 -1,37 9,1% 10,0% 2,70 10,2%

Nuclearelectrica 2016-09 352,0 5,25 1,0% 9,3% -8,5% 19,60 0,21 2,61 0,91 2,42 -0,14 0,9% 1,1% 0,33 6,3%

Pharma

Krka 2016-09 1.715,1 52,30 0,2% -1,1% -15,0% 16,31 1,22 6,56 1,44 6,69 -0,23 5,8% 7,5% 2,65 5,1%

Galenika Fito. 2016-06 57,5 2.700,00 0,0% -0,7% 22,7% 7,48 1,05 17,48 1,36 4,99 -1,71 12,4% 14,0% 80,00 3,0%

Sopharma 2016-09 232,2 3,37 0,6% 13,1% 26,2% 13,86 0,98 2,73 0,74 6,21 1,83 3,9% 7,1% 0,07 2,1%

Construction

Ingra 2016-09 6,8 3,75 7,8% 22,5% 28,0% 0,63 0,56 -1,98 10,99 3,60 3,32 9,0% 89,6% 0,00 0,0%

Tehnika 2016-09 16,6 656,06 15,8% 42,5% 151,3% -33,18 0,40 -4,34 0,78 13,55 9,54 -0,4% -1,2% 0,00 0,0%

IGH 2016-09 19,9 242,97 13,8% 34,7% 140,8% -2,26 10,06 11,67 3,91 -10,58 -7,87 -10,5% -446,0% 0,00 0,0%

Viadukt 2016-09 23,6 387,65 3,2% 26,3% 46,3% -42,79 0,50 6,98 0,45 4,51 2,07 -0,4% -1,2% 0,00 0,0%

Hidroelektra 2016-09 3,2 38,37 -3,4% 0,2% 42,2% -0,32 -0,20 -1,22 0,85 -1,56 -1,18 -27,7% n/a 0,00 0,0%

Dalekovod 2016-09 50,6 15,35 2,4% 13,0% 25,3% 22,94 1,10 6,54 0,87 9,67 6,00 1,0% 4,8% 0,00 0,0%

Energoprojekt 2016-06 115,0 1.304,00 0,0% -8,9% 43,3% 13,72 0,73 14,51 0,40 5,47 -0,51 2,4% 5,3% 20,00 1,5%

Selected Equity Fundamentals (Trailing Basis) & Performance

Regional Equity Market; Fundamentals of Selected Companies

IC MARKET ESPRESSO

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 8

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Tourism

Liburnia Riviera 2016-09 146,0 3.619,43 0,5% -1,4% -7,2% -208,97 1,40 11,32 4,34 9,45 0,42 -0,5% -0,7% 0,00 0,0%

Valamar Riviera 2016-09 653,3 38,88 0,3% 12,4% 70,5% 18,91 2,13 8,91 3,91 11,19 1,51 6,4% 11,3% 0,60 1,5%

HUP Zagreb 2016-09 161,8 2.809,32 0,0% 0,4% 49,6% 16,24 1,52 15,51 4,40 10,42 1,05 6,4% 9,4% 15,00 0,5%

Maistra 2016-09 366,4 251,13 0,4% -0,7% 16,8% 19,33 1,74 8,38 3,66 9,90 2,26 5,2% 9,0% 0,00 0,0%

Turisthotel 2016-09 156,5 3.200,00 3,1% 8,5% 28,0% 15,00 3,09 11,83 4,93 10,60 -1,58 16,0% 20,6% 45,00 1,4%

Plava Laguna 2016-09 430,5 5.910,72 -0,5% 7,5% 39,1% 13,18 1,53 8,38 3,42 8,88 0,38 7,6% 11,6% 0,00 0,0%

Arenaturist 2016-09 146,2 502,55 0,2% 7,3% 58,0% 38,02 1,36 9,49 3,71 11,68 3,33 1,9% 3,6% 0,00 0,0%

Albena 2016-09 134,6 61,61 0,0% 0,3% 28,9% 68,70 0,61 18,64 3,26 12,97 2,49 0,7% 0,9% 0,45 0,7%

Shipping

Atlantska Plov. 2016-09 59,4 319,21 3,4% 13,0% 175,3% -2,66 0,75 10,10 5,05 -19,47 -13,52 -9,2% -28,2% 0,00 0,0%

Jadroplov 2016-09 9,7 44,31 0,0% 8,8% 140,6% -0,45 0,21 -0,99 9,75 -5,00 -4,25 -19,9% -47,8% 0,00 0,0%

Uljanik Plovidba 2016-09 12,7 164,02 1,2% 2,5% 24,3% -0,18 2,92 0,32 6,99 -3,38 -3,12 -40,2% -1593,2% 0,00 0,0%

TNG 2016-09 90,8 77,97 0,0% 4,0% 11,4% 15,58 1,10 6,25 5,68 11,53 5,86 3,1% 7,0% 3,95 5,1%

Telecommunications

HT 2016-09 1.900,9 174,11 0,2% 3,0% 24,5% 14,73 1,20 6,25 1,53 3,91 -1,36 6,9% 8,1% 6,00 3,4%

Telekom Slo. 2016-09 515,5 78,87 1,1% 10,9% 7,9% 26,94 0,74 2,63 1,27 4,62 1,95 1,4% 2,7% 5,00 6,3%

Infrastructure

Luka Ploce 2016-09 31,8 563,52 -0,4% -1,3% -10,4% -11,98 0,59 -22,50 0,29 -3,78 13,67 -4,6% -4,9% 0,00 0,0%

Luka Rijeka 2016-09 85,5 47,55 -0,1% -0,8% 15,4% -420,10 0,93 -45,70 3,39 -335,22 101,41 -0,2% -0,2% 0,00 0,0%

Luka Koper 2016-09 367,1 26,22 -0,3% 4,9% 15,0% 9,49 1,13 5,60 2,48 6,51 1,66 8,1% 11,9% 1,13 4,3%

Aerodrom N.T. 2016-09 304,4 1.100,00 0,0% -4,8% 21,4% 10,57 1,39 10,88 4,45 7,68 -1,00 12,2% 13,1% 60,25 5,5%

Food

Viro 2016-09 71,7 387,78 -1,9% 1,2% 29,7% -52,53 1,31 -4,62 0,98 12,97 5,62 -0,8% -2,5% 0,00 0,0%

Jamnica 2016-09 424,8 144.000,00 0,0% 3,5% 37,1% 9,52 1,67 7,13 0,83 5,92 -2,07 11,0% 17,5% 2.197,00 1,5%

Cakovecki Mlin. 2016-09 91,7 6.550,00 0,0% 1,4% 31,0% 12,87 1,14 6,58 0,50 6,67 -1,32 6,1% 8,8% 60,00 0,9%

Kras 2016-09 100,1 546,75 0,7% 1,3% 9,2% 37,39 1,23 12,10 0,89 11,01 1,93 1,7% 3,3% 0,00 0,0%

Ledo 2016-09 450,6 10.766,67 -0,1% 1,0% 20,4% 11,25 1,73 11,00 1,17 6,55 -1,69 10,9% 15,3% 425,01 3,9%

Belje 2016-09 26,3 24,01 -0,4% 2,9% 0,3% -4,37 0,10 1,42 0,91 9,70 8,33 -1,2% -2,3% 0,00 0,0%

Atlantic Grupa 2016-09 415,5 934,57 -0,7% 5,7% 15,4% 12,68 1,50 14,18 0,94 9,12 3,31 4,6% 11,9% 13,50 1,4%

Sojaprotein 2016-06 76,7 638,00 -0,3% 3,2% -24,3% 23,35 0,80 111,84 0,89 11,39 4,28 1,6% 3,4% 0,00 0,0%

Retail

Tisak 2016-09 50,9 160,00 0,0% 3,2% -11,1% 41,91 1,47 13,91 0,07 2,42 -2,03 0,9% 3,5% 0,00 0,0%

Medika 2016-09 70,8 17.600,00 0,0% 2,4% 40,8% 8,92 1,19 -15,21 0,30 10,36 3,50 2,7% 13,4% 0,00 0,0%

Mercator 2016-09 411,1 67,50 0,0% -0,7% -17,7% -160,35 0,64 8,10 0,51 12,14 8,27 -0,1% -0,4% 0,00 0,0%

Petrol 2016-09 680,1 326,00 0,3% 0,3% 27,8% 9,19 1,17 8,08 0,30 7,70 3,00 5,2% 12,7% 12,60 3,9%

Company

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

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

Fundamental indicators

Last availab. FS Last price

Change

M. Cap( EURm)

Selected Equity Fundamentals (Trailing Basis) & Performance

Regional Equity Market; Fundamentals of Selected Companies

IC MARKET ESPRESSO

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 9 IC.traderInterCapital.hr

Company

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

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

Fundamental indicators

Last availab. FS Last price

Change

M. Cap( EURm)

Diversified

Adris Grupa 2016-09 1.183,5 472,22 0,5% 3,5% 37,6% -10,31 0,88 -39,66 1,48 n/a n/a -4,3% -8,5% 15,00 3,2%

Podravka 2016-09 361,4 380,67 -0,3% 0,4% 20,8% 6,47 0,94 5,01 0,89 7,72 2,31 8,2% 14,6% 7,00 1,8%

Industrial Capital 2016-09 34,8 4,38 -0,6% 0,1% 35,8% 5,16 0,55 3,45 0,23 1,63 -1,00 9,1% 10,6% 0,00 0,0%

Industrial Hold. 2016-09 40,8 1,03 1,0% 1,0% 23,4% -6,93 0,28 4,87 2,04 18,77 10,77 -2,6% -4,0% 0,00 0,0%

Stara Planina 2016-09 71,4 6,65 1,8% 2,5% 83,4% 8,17 0,85 5,25 0,55 3,36 -1,30 8,7% 10,4% 0,21 3,1%

Holding Varna 2016-09 80,5 30,07 0,2% -8,9% 32,2% 234,25 0,85 12,80 6,21 33,60 17,52 0,2% 0,4% 0,00 0,0%

Chimimport 2016-09 209,5 1,71 0,3% 2,4% 28,7% 6,98 0,26 2,21 N/A N/A N/A 0,7% 3,7% 0,00 0,0%

Eurohold 2016-09 38,7 0,60 -3,6% -8,9% -11,2% -0,85 0,55 1,63 N/A N/A N/A -8,4% -63,9% 0,00 0,5%

Stock Exchange

BVB 2016-09 51,2 30,00 -0,7% 3,4% 14,1% 34,42 2,16 7,30 3,21 15,18 -19,05 3,0% 6,3% 0,87 2,9%

NAVPS Dividend Div. YldDisc. to

NAV (3Y) ROA(%) ROE(%)

Fundamental indicators

Disc. to NAV (curr)

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

Last availab. FS Last price Day YTD 1YM. Cap

Change

Funds / REIT's

Fondul Propriet. 2016-09 2.097,0 0,86 -0,5% 8,2% 28,1% 21,53 0,83 1,14 -24,9% -23,7% -26,8% 3,9% 3,9% 0,05 5,8%

Bulgarian REIT 2016-09 23,2 2,25 0,0% -0,7% 41,5% 32,55 0,66 N/A N/A N/A N/A 1,8% 2,0% 0,00 0,0%

Adv. Terra. REIT 2016-09 92,7 2,13 0,5% 1,9% 4,3% 23,36 0,81 N/A N/A N/A N/A 3,3% 3,5% 0,10 4,7%

Dividend Div. YldROA(%) ROE(%)NII /

assetsNF&CI /

assets

Fundamental indicators

LeverageLoans vs. Deposits

M. Cap(EURm) P/E P/BV

Last availab. FS Last price Day YTD 1Y

Change

Banks

ZABA 2016-09 2.494,3 58,42 -0,2% 8,2% 58,7% 11,29 1,02 6,89 91,2% 2,7% 1,0% 1,3% 9,0% 0,00 0,0%

PBZ 2016-09 2.000,7 786,71 -0,5% 2,3% 41,2% 9,65 1,06 5,72 85,1% 3,2% 1,6% 1,9% 11,0% 10,16 1,3%

AIK Banka 2016-06 143,9 1.800,00 0,0% 2,9% 1,2% 3,79 0,32 3,21 78,1% 4,0% 0,5% 2,6% 8,5% 0,00 0,0%

Komercijalna B. 2016-06 239,9 1.690,00 0,5% -2,8% 9,0% -2,85 0,49 7,18 56,5% 3,3% 1,2% -2,4% -17,3% 63,00 3,7%

Banca Transil. 2016-09 1.848,5 2,28 0,4% -4,4% 21,0% 9,78 1,52 8,82 71,0% 4,6% 0,0% 1,8% 15,6% 0,39 17,1%

BRD 2016-09 1.735,6 11,20 0,2% -5,7% 10,9% 10,96 1,16 7,48 76,5% 3,1% 1,6% 1,4% 10,6% 0,32 2,9%

CCB 2016-09 92,1 1,59 -1,8% 4,1% 57,2% 4,69 0,47 13,07 55,3% 2,3% 0,9% 0,8% 9,9% 0,00 0,0%

FIB 2016-09 214,3 3,81 -1,5% 13,7% 73,2% 5,47 0,51 10,71 67,3% 3,6% 1,0% 0,9% 9,3% 0,00 0,0%

Dividend Div. YldNet

margin ROA(%) ROE(%)P/BV P/GWP LeverageCombined

RatioLast

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

Insurance

Sava Re 2016-09 254,9 14,80 -0,1% 12,0% 19,8% 7,7 0,9 0,5 5,7 91,5% 6,1% 2,0% 11,1% 0,80 5,4%

Triglav 2016-09 563,8 24,80 1,6% 6,9% 4,3% 9,2 0,8 0,6 4,9 94,3% 5,5% 1,7% 8,4% 2,50 10,1%

CO 2016-09 318,4 5.550,00 0,0% 0,0% -4,8% 14,8 0,9 0,8 4,1 100,2% 4,9% 1,5% 6,4% 0,00 0,0%

Common Common

HOLD 604,00

Preferred Preferred

BUY 512,00

Sava Re

Group

30 November

2015

STRONG

BUY17,22 14,80 16,4%

-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

Luka Koper13 October

2015BUY 25,66 26,22 -2,1%

- 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 77,97 -16,6%

- 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

Valamar

Riviera

21 September

201538,88 -100,0%

SELL 538,68

- historically inconsistent strategy related to

often changes in management

- future capacities rely on strong CAPEX and

Slovenia's investments in railway

UNDER

REVIEW

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

Adris Group20 December

2016

590

Đivo Pulitika

Podravka

Group

31 July

2015

Hrvatski

Telekom174,11

380,67

29 January

2016

Đivo Pulitika

472,22 8,4%

-100,0% Đivo Pulitika

2,4%

- weak revenue growth potential

- profitability above peer

group's average

- dividend player

- low level of debtBUY 160,95

UNDER

REVIEW

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

Group750,00 4,9%

03 August

2015BUY 786,87

Ericsson

Nikola Tesla

CompanyLast

research

Recommend-

ationTarget price Last price Difference

-7,6%

-18,6%

11 July

2016934,57 2,1%

11 May

2015SELL 1017,10 1.249,91

23 February

2016326,00 7,4% Đivo Pulitika

Krka Group7 January

201552,30 -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

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

6,35 -22,8%

24,80 15,2%

- 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

NIS

Group

9 September

2015744,00 -27,6%

- 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

13,2%

- stable structure of debt

- risk of permanent competitive

pressure on prices

Đivo Pulitika

Group

Telekom

Slovenije

1 October

201578,87

AD Plastik

Group139,98 -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

3 May

2016

UNDER

REVIEW

HOLD 28,58

Fondul

Proprietatea

23 March

2016

STRONG

BUY0,99 0,86 15,1%

-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

Overview of Investment Recommendations

InterCapital Research Coverage Universe

IC MARKET ESPRESSO

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 10 IC.traderInterCapital.hr

About us

InterCapital Group

IC MARKET ESPRESSO

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 11

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: brokeri@intercapital.hr)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: fi@intercapital.hr)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: icam@intercapital.hr)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: ib@intercapital.hr)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: rizik@intercapital.hr)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: custody@intercapital.hr)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.

iCAPITAL (tel: + 385 1 48 25 897, mail: icapital@intercapital.hr)iCapital.hr has been designed and implemented as an investment and educational portal, providing information needed when making investment decisions, all available inone place. On iCapital.hr you can track market trends of domestic and foreign stocks, using technical and fundamental analysis, monitor daily changes in the top 10shareholders of the Zagreb Stock Exchange, vote in Sentiment surveys, monitor the performance of own portfolios, read daily market reviews and comments, participatein discussions through the Forum, compare Croatian investment funds, as well as play and inform yourself. Visit us on www.icapital.hr - the leading Croatian Communityof traders and investors.

IC.traderInterCapital.hr

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, TPNGRA ZA, ATGRRA ZA andRIVPRA ZA.

Issuer recommendations stated in IC Daily - Market Espresso are not declared to the Issuer before they are published. In the last 12 months periodInterCapital Securities Ltd. served as a listing agent for the TPNGRA ZA shares on the Official market of the Zagreb Stock Exchange. Inc.

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

4Q 2016 (1 October - 31 December 2016)