After the stock index of the Zagreb Stock Exchange, Crobex, reached its highest level of 5,393 points in mid-October last year, which means a little over a year and a month ago, it has recently dropped to just 1,690 points.
In other words, the stock index has plummeted by as much as 68 percent in the last year and a month, losing more than two-thirds of its value. Analysts have calculated that in the past year, all of the approximately 30 most traded, and even the most liquid stocks ended up in the red. The largest price declines were seen in the construction and shipping sectors, averaging over 80 percent. While the negative trend in construction stocks is directly linked to the announced decline in revenues and profits due to reduced construction of new infrastructure projects in the short to medium term, shipping companies are primarily being ‘sunk’ by the current low freight rates. The significant drop in stock prices in these two sectors was not prevented even by the good nine-month results of almost all major domestic construction and shipping companies.
Although there have been at least five or six major rises or declines in the Crobex in the recent 15-year history of the Zagreb Stock Exchange, it can be said that this year’s decline is both the longest and the steepest. Namely, from January 3 to November 20 of this year, Crobex fell by as much as 66.5 percent. The second largest decline occurred about ten years ago, during the period from July 22 to September 1, 1998, when Crobex weakened by 49 percent in less than a month and a half (partly due to the summer Russian financial crisis at that time). Our stock indices lost about 30 percent in value on two occasions, from October 1 to November 14, 1997, and from July 21 to September 30, 1999. In the past month and a half, we have also witnessed weekly declines or jumps of between 25 and 28 percent. A larger decline in intensity was also recorded from April 9 to June 2, 1998, when Crobex weakened by 22 percent.
