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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2011
ZAGREB STOCK EXCHANGE
The Zagreb Stock Exchange remains well
positioned to face the future with
confidence, and even exceed expectations.
Ivana Gazic
General Manager
The year 2011 is an occasion to celebrate 20
years since the revival of the stock exchange
trading in Croatia and the Zagreb Stock
Exchange remains well positioned to face the
future with confidence, and even exceed
expectations.
Zagreb Stock Exchange has strong
fundamentals to continue to act as an efficient
and rule-based market harmonized with the
European standards and will maintain its work
on implementation of new products and
services as well on raising the quality of
Croatian capital market and meeting the ever
increasing investors’ demands on
transparency and quality.
HISTORY AND DEVELOPMENT
The stock exchange trading in Croatia was active
since 1907 till 1911 and again since 1919 till 1945.
After the World War II The Zagreb Stock Exchange
was revived in 1991 as a joint-stock company with
25 commercial banks and insurance companies.
From the initial 25 members (brokerage
companies), thanks to the trade growth and
development the number of members has
climbed to some forty-odd active traders today:
banks and private brokerage companies, and 43
shareholders. At the very beginning, trading took
place at big auctions held at the Exchange head
office with all brokers actually physically present
and in 1994, an electronic trading system was
introduced.
In 2007, the Croatian financial market
consolidated as the Varazdin Stock Exchange
merged with the Zagreb Stock Exchange. These
new circumstances, resulting in a larger number of
listed securities and greater trading volume, along
with a natural development of the financial market
that saw the investment climate improve and gave
rise to a stronger interest of all market participants
in new financial products, highlighted the need for
the implementation of a new system that would be
able to meet the needs of the small, but extremely
fast-growing Croatian market.
The new trading platform, launched in autumn
2007 after several months of preparations,
represents an unprecedented technological
enhancement.
Zagreb Stock Exchange annual trading report
2010:
Until December 2010 it seemed that one more
difficult year for the Croatian capital market was
about to end but mid-December has brought an
unexpected twist for the Zagreb Stock Exchange
trading statistics due to Hungary’s largest refiner
MOL Nyrt. offer to buy an outstanding shares of
Croatian oil company, INA, Plc (ZSE: INA-R-A)
where Mol is a single largest shareholder: some of
the December’s daily turnovers entered the top
ten daily turnovers in the history of ZSE and the
indices recorded double-digit percentage growth
which ultimately resulted with the total turnover
increase of +18.2%, an excellent growth in
comparison with the previous year when total
turnover suffered a decline of almost -65%.
On a yearly basis 25-share benchmark CROBEX
index recorded a noticeable growth of +5.3% and
the blue-chip index CROBEX10 ended in the
green by +9.5% which is an increase that no
other comparable regional stock exchange noted
for the 2010.
Insight into the 2010 trading overview reveals that
the correction of the -22% decline in regular stock
turnover is actually an improvement compared to
the 2009 double decline of -56% and the trading
witnessed a total volume increase of +94% as
well as the market capitalization of almost +13%.
Croatian Telecom Inc. (ZSE: HT-R-A) shares
headed the list of the most liquid shares all throuh
the year (except December) and achieved an
annual price growth rate of +5.18% while INA, Plc
shares recorded the highest growth rate among
the most liquid shares with +93.37% increase.
Some companies have recognized the value of
higher market segment listing and since 2010
shares of Uljanik Plovidba d.d. (ZSE: ULPL-R-A),
AD Plastik d.d. (ZSE: ADPL-R-A) and Koncar
Elektroindustrija (ZSE: KOEI-R-A) are traded within
the Zagreb Stock Exchange Official Market.
Zagreb Stock Exchange continues the intense
work on the new Stock Exchange Rules which will
open the possibility of new products and services
in the Croatian capital market such as structured
products, short selling or regional MTF.
The Zagreb Stock Exchange has intensified it
educational activities: the Zagreb Stock Exchange
Academy has begun with its educational
programs in May 2010 and there was also a very
extensive issuers’ training held in cooperation with
Croatian Financial Services Supervisory Agency
(CFSSA).
There was also a successful 20th Zagreb Stock
Exchange conference held in autumn and
cooperation with the regional stock exchanges
through the international Day of the Regional SEE
Capital Markets continues.
The Zagreb Stock Exchange has also intensified
its cooperation with Official Market issuers, there
was a new Code of Corporate Governance
published (also in collaboration with CFSSA), the
ZSE website was redesigned and calendar of
dividend payments available, service for entering
OTC transactions was introduced, and all of that is
just a part of everyday efforts of the Zagreb Stock
Exchange to contribute to the development and
transparency of the Croatian capital market.
FUTURE OUTLOOK
The slow recovery is ahead the global economy
but the concern still remains and global investors
fear could affect domestic capital market, liquidity
and stock prices.
Further policy actions, especially in the financial
sector in this election year (The next parliamentary
election to the Croatian Parliament is scheduled to
take place sometime in 2011, presumably in the
fourth quarter of the year), will be essential to
induce the recovery. We anticipate further
government action as well as the use of other
tools to stimulate growth.
Positive moments undoubtedly persist but certain
risks remain, challenging sustainable market
recovery.
The Zagreb Stock Exchange will carefully observe
global as well as regional economy and equity
market trends and remain in line with market
expectations.
Year 2011 will test the capabilities of market and
stock exchange flexibility. Narrowing the targets
and carefully selecting priorities to stabilize the
system, and regain the investors’ confidence are
the primary tasks.
Trading conditions for the 2011 will probably
remain challenging and the economic outlook for
2011 is uncertain but we believe that our leading
regional position leaves us well placed for the
eventual recovery.
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