FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2012
ZAGREB STOCK EXCHANGE
The primary tasks of Zagreb Stock
Exchange will be to lead the development
of the capital market.
Ivana Gazic
President of the Management Board
Zagreb Stock Exchange faces new challenges
in the still uncertain economic environment.
Encouraged by signs of a fragile recovery
and with strong fundamentals it will continue
to act as an efficient and rule-based market
harmonized with the European standards and
remain confident in the progress of the Croatian
capital market. This confidence is even stronger
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 in 2011:
European and global capital markets seemed
relieved welcoming the end of 2011, which will
be remembered as the year of political and
economic turmoil, social upheavals and even
more uncertainty.
The first half of 2011 on Zagreb Stock Exchange
enhanced optimism with the regular stock
turnover growth of +14% and a minimal
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since after long negotiation process that
commenced in 2005, Croatia is now scheduled
to become the 28th European Union Member
State in July 2013.
transparent, secure, cost-effective and efficient
marketplace as well as to obtain the highest
quality of capital market services in order to
meet the needs of investors, issuers and all
stakeholders.
The primary tasks of Zagreb Stock Exchange
will be to lead the development of the
capital market in the region while providing
reduction of the total turnover of only -3.7%,
primarily due to significantly lower intensity of
bonds trading within the six-month average.
There was an increase in market capitalization
and indexes strengthened by +5.7% (CROBEX)
and +4.6% (CROBEX10).
Zagreb Stock Exchange Academy marked its
1st anniversary in May: in 2011 it organized
about fifty educational events attended by
almost thousand participants and started
the preparation of the first certified program
in Croatia for training investor relations
professionals.
But in the other half there was a considerable
decline compared to previous year: -17.6% for
CROBEX and -15.4% for CROBEX10. FUTURE OUTLOOK
Although the year was marked by low liquidity,
regular stock turnover has not suffered a
significant loss: only -9.4% compared to last
year, but weaker bonds trading resulted with a
decline of the total turnover by -19.8%. Croatia will be a member of the EU from 1 July
2013 as the 28th country to join the Union.
Parliament elections at the end of 2011 and
Croatia’s full European Union membership are
expected to accelerate fiscal and structural
reforms and should make Croatia more
attractive for foreign investors.
The shares of INA d. d. (ZSE: INA-R-A),
Croatia’s largest refiner, lead in terms of market
capitalization and where the second most
traded share in 2011 – the regulator (Croatian
Financial Supervisory Services Agency) lifted the
ban on INA’s share trading in December 2011
after a long-term suspension. Croatian Telecom
Inc. (ZSE: HT-R-A) was the most traded share
generating about a quarter of total turnover.
Some of the Zagreb Stock Exchange 2011
highlights include:
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new stock exchange rules
new version of the trading system
ISO 9001:2008 standard
new bond index CROBIStr
sector classification of the listed companies
OTC transactions reporting through web
interface
• dividend calendar on the stock exchange’s
website
• 21st conference marking the Zagreb Stock
Exchange’ 20th anniversary.
Improving the transparency of the listed
companies is a continuous goal of Zagreb
Stock Exchange and in 2011 timely submission
of financial statements improved significantly.
While macroeconomic stability of the country
has been achieved and the worst of the
recession is probably over, structural reforms
lag and the concern still remains while Croatia
is yet to see the signs of a sustained economic
recovery. Further government actions will be
essential to induce the recovery of the domestic
capital market, especially regarding further
privatization of public enterprises.
Zagreb Stock Exchange will continue its
work on encouraging issuers to raise capital
through the stock exchange, developing new
products and services such as short selling
and certificates, maintaining market integrity
and investors’ confidence as well as providing
a reliable mechanism for funding the growth
of Croatian economy and raising awareness
about the importance of capital markets as
one of the most significant factors in economic
development.
Positive moments undoubtedly persist but
certain risks remain, challenging sustainable
market recovery and Zagreb Stock Exchange
will carefully observe global as well as regional
economy and equity market trends and remain
in line with market expectations in order to
become the market of choice in the region.