ZAGREB (Croatia), January 13 (SeeNews) – The indices of the Zagreb Stock Exchange will continue their positive performance in 2017 if the favourable economic conditions which Croatia experienced last year persist, an analyst at the local unit of Erste Bank told SeeNews on Friday.
"If certain conditions are in place, such as continued economic growth, a successful tourist season and absence of turbulence in global financial markets, it is realistic to expect that positive sentiment on the bourse will stay," Davor Spoljara said in response to a SeeNews inquiry.
In 2016 the 25-share benchmark CROBEX index advanced 18% to close the year at 1,994.84 points. In October CROBEX climbed over the 2,000 points threshold for the first time in five years.
Spoljara told SeeNews that despite a turbulent year on both the domestic and international markets CROBEX outperformed almost all major stock indexes.
"CROBEX's yield of 18%, or 21% if we include dividends, surpasses almost all major stock indexes, all in a year marked by political instability in Croatia, and global uncertainties such as Brexit, the conflict in Syria and the US presidential election," Spoljara said.
In his view, the CROBEX rise can largely be pinned on Croatia's accelerated economic growth after a six-year recession.
The CROBEX10, which tracks the leading companies in terms of free float, market capitalisation and liquidity, gained 17% in 2016 to close the year at 1,158.18 points. It too is seen advancing this year if conditions are supportive.
Total turnover on the ZSE followed the positive trend, rising 16% on the year to 3.9 billion kuna ($551.9 million/518.2 million euro) at end-December.
Spoljara, however, noted that although the turnover did increase, liquidity over the past five years has been equal to less than a fifth of the turnover seen in 2008.
"Reduced liquidity is the result of a lack of new listings on the stock exchange and the large concentration of investors, especially pension funds, on most listings. Additionally, the introduction of the capital gains tax has pushed investors away from trading, mainly for procedural reasons," he said.
New listing could make trade on Zagreb bourse more vibrant, especially if they draw the the attention of foreign investors, he noted.
The most liquid company last year was Croatia's biggest telecoms operator, Hrvatski Telekom [ZSE:HT-R-A], which accounted for almost 19% of total share turnover or 356.7 million kuna, followed by hotel operator Valamar Riviera [ZSE:RIVP-R-A] with 233.6 million kuna.
The total market capitalisation of the Zagreb Stock Exchange (ZSE) climbed 14% on the year to 232.4 billion kuna at the end of 2016.
(1 euro= 7.52603 kuna)