September 12 (SeeNews) - The outcome of Croatia's snap general election is not expected to have a dramatic impact on the country's financial market, Zagreb-based analyst Alen Kovac said on Monday following a vote, in which conservative HDZ party fell short of an outright majority.
Yet, a stable government is a prerequisite for the good performance of the economy and the market, the head economist at Croatia’s unit of Erste Bank told SeeNews in an emailed statement.
"The domestic economy, and thus local companies and their performance on the bourse, depend on a stable government that would ensure continued positive macroeconomic trends", Kovac said.
The Croatian share indices opened higher on Monday following the HDZ's election victory, bourse data showed.The 25-share benchmark CROBEX index of the Zagreb Stock Exchange added 0.24% to 1,855.55 points as at 11:37 CET on Monday, the narrower blue-chip index, the CROBEX10, gained 0.39% to 1,083.18, and the fixed-income CROBIS index edged up 0.03% to 108.3400 points.
As at 14:55 CET, the CROBEX has shed part of its gains for the day, showing a 0.18% increase at 1,854.55 points, CROBEX10 advance was 0.35% at 1,082.69, while CROBIS growth accelerated to 0.06%, taking the index to 108.3700 points.
The Croatian Democratic Union, HDZ, claimed victory in Sunday's early election, securing 61 of the 151 seats in parliament. However, HDZ fell short of an outright majority and now faces tough talks on forming a government coalition.
HDZ's main political rival, a coalition around the Social Democratic Party, SDP, won 54 seats. The conservatives' former junior government partner, MOST, came in third with 13 seats and is likely to be kingmaker once again.
Prior to Sunday's vote, RBA analysts have said that there is a greater chance of HDZ-MOST coalition talks than negotiations between the SDP and MOST. However, MOST is a tough negotiator, and does not support populist demands put forward by traditional political parties, according to the RBA analysts.
Discussions between HDZ and MOST could take less time now as MOST is now much better prepared, with a clear economic programme and aims, RBA has noted.