Samodol ordered the suspension of the transfer of ownership of Croatia Airlines shares

The Croatian Financial Services Supervisory Agency (Hanfa) adopted a temporary decision at today’s extraordinary session, ordering the Central Depository Agency to suspend all actions related to the transfer of ownership based on transactions of Croatia Airlines shares executed on the Zagreb Stock Exchange on October 22 and 23.

The suspension of all ownership transfer actions lasts for 60 days from the date of the temporary decision, during which the Agency will conduct supervisory activities and take appropriate measures. The decision published on Hanfa’s website states that this decision pertains to 41 transactions of Croatia Airlines shares conducted on October 22 and 52 transactions of the same shares on October 23. As explained, after the Agency annulled the transactions of Croatia Airlines shares from October 17 due to a significant price increase on October 18, it continued to monitor trading in those shares. Thus, on October 22, the Agency noticed trading of the mentioned shares at prices that significantly deviated from the prices of the previous trading day, October 19, when their closing price was 650 kuna.

On October 22, a total of 41 transactions of that share were concluded, with prices ranging from 700 to 1,200 kuna, with a turnover of 255.7 thousand kuna and a total of 269 shares traded. Trading occurred in small quantities per transaction, with most transactions involving quantities of up to ten shares, with significant price jumps. The highest and closing price of 1,200 kuna was 84.62 percent higher compared to the price from the previous trading day “without market justification and without the announcement of special business decisions of the Issuer that could affect the significant price increase, of which the public should have been informed,” states Hanfa’s decision. The next day, the Agency noticed trading of those shares at prices that significantly deviated, by 25 percent, from the prices of the previous trading day – on October 23, a total of 52 transactions were concluded at prices ranging from 1,361 to 1,700 kuna, while the closing price was 1,499.99 kuna.

The total turnover was 317.1 thousand kuna, and a total of 210 shares of Croatia Airlines were traded. Again, trading occurred in small quantities per transaction, with most transactions involving quantities of one and two shares with significant price jumps. The increase in the closing price of 25 percent was “again without market justification and without the announcement of special business decisions of the Issuer that could affect the significant price increase, of which the public should have been informed.” Such sudden daily trading activity at prices that fluctuated in ranges of 84.62 percent on October 22, and 25 percent on October 23, along with the small quantity of shares traded, raises reasonable suspicion of creating a false image of the supply, demand, and price of that share. The decision also states that if the results of the supervision allow, the prohibitions mentioned in this Temporary Decision will be lifted before the expiration of the 60-day period, or that the Agency will, if necessary, “take other measures to protect investors and the integrity of the market.”  (H)