ANNUAL REPORT JUNE 2010
FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ZAGREB STOCK EXCHANGE
Zagreb Stock Exchange remains confident
about the ready and efficient response to
future challenges.
Ivana Gazic
General Manager
Despite the demanding trading environment,
Zagreb Stock Exchange remains confident
about the ready and efficient response to
future challenges and will continue its work on
implementation of new products and services.
As in 2009, narrowing the targets and carefully
selecting priorities to stabilize the system, and
regain the investors’ confidence are the
primary tasks.
Year 2010 will test the capabilities of market
and stock exchange flexibility.
HISTORY AND DEVELOPMENT
The ZSE was incorporated 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.
+40%, Atlantic grupa + 47,7% etc.) and the
biggest price gainer was JANAF with +117,2%.
There was significant decline in the
construction sector (IGH -29%, Dalekovod -
15,2%, INGRA -46,8%, Tehnika -24,7%).
The liquidity was consolidated into a small
group of stocks - the most liquid stocks (HT,
Atlantska, IGH and Dalekovod) altogether
gained the bigger turnover than all the other
279 listed stocks.
Despite the difficult capital market conditions,
Zagreb Stock Exchange continued to raise the
quality of the services and in 2009 had three
new listings in the highest quotation, the
Official Market.
Also, new index of blue-chip issues,
CROBEX10, was launched in September 2009.
The new CROBEX10 index provides a set of
tools for investors to benchmark the blue-chip
companies of the Zagreb Stock Exchange. It
also opens potential for the development of
innovative investment products, such as index-
linked funds and index certificates.
The new CROBEX10 index tracks 10 leading
companies at the ZSE in term of free-float
market capitalization and liquidity. CROBEX10
components are selected from the CROBEX
index.
standards and the requirements of information
quality for the candidates seeking a listing in
the prime market.
Despite the demanding trading environment in
2009, Zagreb Stock Exchange remains
confident about the ready and efficient
response to future challenges.
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, will be essential to induce the
recovery. We anticipate further government
action as well as the use of other tools to
stimulate growth. Equity market valuations
acknowledge the recessionary environment.
The consensus view of market participants is
that stocks are cheap, but it is possible equity
valuations could re-test lows given the pending
weakness in future corporate earnings.
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.
The Market Making facility was also introduced.
Zagreb Stock Exchange annual trading
report 2009:
Year 2009 was the very challenging for the
Croatian capital market and its participants –
Zagreb Stock Exchange was also not able to
dodge the effects of the global financial market
crisis: regular turnover was cut in half regarding
the 2008 and the CROBEX index went through
drastic oscillations of 90% between his lowest
and his highest point (between 1.079 and
2.318 points).
Nevertheless, the prices of the majority of the
most liquid stocks where increased (HT +37%,
Atalntska plovidba +40%, ADRIS +34,5%, INA
PAGE 162
The new Capital Markets Law was introduced
in the beginning of 2009 and offered
possibilities to restructure the market, introduce
the MTF, modify the shareholders structure etc
and was generally a step toward the greater
harmonization with the European capital
markets practice. Following the new Capital
Market Law, the new Stock Exchange rules
were implemented in July 2009. The new
legislative changes introduced new types of
market stabilizers and investment tools,
facilitated the access to market to any
interested party and expanded the supply of
instruments, while also raising transparency
Year 2010 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 2010 will probably
remain challenging and the economic outlook
for 2010 is uncertain but we believe that our
leading regional position leaves us well placed
for the eventual recovery.