New opportunities for investors in the Balkans
While waiting for the announced privatization of state-owned companies via a public offering of shares, the Zagreb Stock Exchange is working on alternatives to strengthen its liquidity. The Regional Platform of South Eastern Europe, known as SEELink, should start operating at the end of March as the investors’ “one-stop shop” for the purchase of some 400 shares in five markets. This is a project that was started in 2014 by stock exchanges from Zagreb, Macedonia, and Bulgaria, with the idea of creating a unique place for stock trading in the region, reports Poslovni.hr on February 23, 2016.
The three stock exchanges were yesterday joined by Serbia and Slovenia, which have signed the agreement at the Western Balkans Investment Summit organized by the EBRD in London. The new regional initiative has been supported by the EBRD with a financial grant of half a million euros and with entering into the ownership of the Zagreb Stock Exchange. “This will certainly contribute to the attractiveness of the platform, which will be the first in Europe to help connect markets in such an innovative way”, said Ivana Gažić, head of the Zagreb Stock Exchange.
“The idea of the SEELink is to strengthen the links between capital markets in Southeast Europe. The consolidation on a common platform could finally put the region on the map for major investors. This is a step in the right direction, but it is a long-term project which in its first phase involves connecting participants by exchanging purchase orders”, says Danijel Nevidal from InterCapital, the largest brokerage firm in 2015 by turnover. “We have supported this project from the start, as well as all the others that will result in greater liquidity and promotion of the markets”, he adds.
“In this business, the bigger is the better, and the platform will certainly be a good signal to foreign institutional investors which will gain a one-step access to five markets. If the platform includes companies with large market capitalization, their attractiveness will be much greater than at individual stock markets”, says Nevidal.
The owner of Hita Vrijednosnice Ivan Tadin is optimistic and believes that even small investors will get new opportunities for investment. “Domestic investors who buy foreign securities are mostly oriented to the USA and Europe, particularly Germany, due to liquidity. This is the opportunity for them to see in one place neighbouring markets as well”, he says.
After the launch of the exchange, in about a month the blue-chip index, SEE LinX will be presented which should increase the visibility of the regional markets. It will be made up of ten stocks, five Croatian, three Bulgarian and two Macedonian.
The Zagreb Stock Exchange expects that about eight members from the Bulgarian and ten members from the Macedonian and the Zagreb stock exchanges each will join the new system on the very first day and that 387 securities will be available for trading. However, the regional platform will, for now, remain outside the focus of the largest domestic investors. The legislation limits the mandatory pension funds with a portfolio of more than 74 billion kunas to invest exclusively in the European Union and the OECD countries, which excludes Macedonia and Serbia.