ZSE hopes that the privatization could revive the Croatian stock market.
Ivana Gažić, CEO of Zagreb Stock Exchange, said on Friday that the IPO of Croatian Electrical Company (HEP) would again popularize the capital market among citizens and could encourage other companies to enter the stock exchange, reports Jutarnji List on January 27, 2017.
She pointed out that the Zagreb Stock Exchange was ready for a possible IPO of HEP and added that it would be a very positive development. “Last year was very good for the Zagreb Stock Exchange in terms of average price growth rate, but the transactions are still in decline and therefore we need new shares, which would contribute to market liquidity”, said Gažić at the roundtable organized by the Zagreb Stock Exchange Academy.
According to Zdeslav Šantić, the chief economist of Societe Generale – Splitska Banka, this year started without significant concern with economic trends in Europe and in Croatia, but with escalated political risks, which could have a strong impact on the economy.
This mainly refers to the victory of Donald Trump at US presidential election and some of his first decisions after entering the White House, which have raised concern. On the one hand, Trump has talked about tax relief and stronger fiscal spending, which could be positive for the US and global economy, but on the other hand he is taking steps which could stop globalization processes. However, that will not be significantly and quickly felt in Europe, which has its own political problems, especially uncertainty about this year’s elections in France, Germany and the Netherlands.
Vedran Šošić, Vice-Governor of the Croatian National Bank, said that, although the international environment this year will be less favourable than in 2016, Croatia should not feel negative effects, since all important Croatian trading partners expect stable growth this year. In addition, it is possible that financing conditions for the country could become somewhat more favourable, if the risk premium is lowered, which could compensate for a possible reversal in the general movement of interest rates in the international financial markets.
The competitiveness of Croatian economy is still hindered by public administration, weak rule of law and state-owned part of the economy. The participants stressed that it would be best if the government were to now implement necessary structural reforms, because it is in the first year of its term and Croatia is in the upward economic trend.
Šošić also discussed the issue of whether Croatia should begin the process of accession to the eurozone. Preliminary data on the 2016 budget suggest that indicators could be even better than expected, which means that there is a chance that Croatia will soon leave the excessive budget deficit procedure. In that case, said Šošić, it would be positive to start a debate on joining the European Monetary Union.
