Annual Report 2011 - T-Hrvatski Telekom

12
Investor Information
Economic environment and share price
performance
analysts to downgrade Croatia’s 2011 GDP growth
forecast throughout the year to settle at around zero.
Introduction
Global uncertainties and market volatility prevailed
in 2011, with growing budget deficits, the Eurozone
debt crisis, an overall fall in consumer confidence,
social unrest and a slowdown in the economies
of Asia and South America, among others. These
factors reignited concerns about a prolonged global
recession. Uncertainty was further exacerbated by the
Japanese tsunami, the Arab Spring and other tensions
in the Middle East, with the latter triggering concerns
about global oil supplies and inflation.
Global markets were highly volatile and largely
subdued. In August, Standard & Poor’s removed
for the first time the AAA credit rating of US, and
this prompted further downward pressure on stock
markets worldwide.
Big policy initiatives from the newly elected left-ofcentre
coalition Government are yet to emerge. The
major credit agencies are expected to visit Croatia
in first half of 2012 to discuss the sovereign credit
rating. Meanwhile, in January 2011 a referendum on
EU membership showed majority support and the
accession target date is 1 July 2013.
Against the economic backdrop outlined above
and poor liquidity, the Zagreb Stock Exchange
experienced strong downward pressure, especially
in the second half of the year, amid speculation that a
dividend tax would be introduced. Consequently, the
benchmark CROBEX index fell 17.6% in 2011, after
two years of growth. Annual trading volumes showed
another year of decline, falling 9.4%.
With Croatia’s parliamentary election in December
2011, the long overdue fiscal consolidation and
structural reforms of Croatia’s economy were
postponed. Domestic consumption hit a new low,
unemployment remained high and problems with
overdue payments persisted. These factors caused
T-HT shares ended the year at HRK 242.00, down
16.2% on the HRK 288.71 closing price at the end
of 2010 and marginally outperforming the CROBEX.
The price decline was primarily seen in the first
half of the year following the Company’s dividend
announcement in mid February and ex-dividend
T-HT Share and GDR as compared to CROBEX and Dow Jones Europe Stoxx
Telecommunications Index 1 January 2011 - 30 December 2011
%
130
125
120
115
110
105
100
95
90
85
80
75
70
Jan
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
T-HT Share T-HT GDR CROBEX DJ Euro Stoxx Telecommunications Index