Belgrade Stock Exchange Sees Significant Surge in 2024

Current:
Belgrade Stock Exchange: 1145
Variation:
Yearly 29.76% Monthly 30.79%
Expected Return:
Q1 -0.17% Q4 -1.48%

The main stock market index in Serbia, BELEX 15, has experienced a remarkable increase of 270 points, or 30.79%, since the start of 2024, as indicated by trading on the contract for difference (CFD) that tracks this benchmark index.

Looking ahead, analysts predict that the Serbia Stock Market (BELEX 15) is likely to trade at 1143.30 points by the end of this quarter, based on global macroeconomic models. Additionally, expectations suggest a further decline to 1128.25 points over the next 12 months.

Investment Strategy for BELEX 15:

Given the presented data for the Belgrade Stock Exchange's main index, BELEX 15, the investment strategy focuses on leveraging the expected short-term and medium-term downward trend while maintaining a cautious approach due to high volatility. Here's a concise strategy:

Short Position on BELEX 15:

• Establish a short position on the BELEX 15 index to capitalize on the anticipated decline in index value over the next quarter and the next year. This move aligns with the expected returns of -0.17% for the next quarter and -1.48% for the next year.

Options Strategy:

• Purchase Put Options on BELEX 15: Buying put options will provide a protective downside strategy if the index declines as expected. Select a strike price close to the predicted 12-month low (i.e., 1128.25) and ensure the expiration dates align with the forecast horizon (quarterly and yearly).
• Consider writing (selling) Call Options with strike prices above the current price (1145.00) to generate premium income, benefiting if the index stays under these levels.

Risk Management:

• Set stop-loss orders on both short positions and options to manage potential losses due to high monthly variation (30.79%) should the market move unexpectedly against the position.
• Allocate no more than 5-10% of the investment portfolio to these speculative positions to limit exposure.

This strategy aims to take advantage of the expected bearish trend while mitigating risks associated with the inherent volatility of the BELEX 15 index.