Last year, total trading volume on the ZSE more than halved

According to the preliminary annual trading review, the Zagreb Stock Exchange recorded a total trading volume of 31.5 billion kuna last year, which is 53 percent less than the previous year. In other words, last year’s total trading volume more than halved.

Regular trading in shares amounted to only 17.4 billion kuna, što is a decrease of almost 6.3 billion kuna or 25 percent compared to the previous year. In the year marking the beginning of the global financial crisis, an even greater percentage decline, and thus negative records, are evident in the value of shares. Namely, the stock index Crobex, as an indicator of the average price movement of about 30 of the most liquid shares on the Zagreb Stock Exchange, lost as much as 67.2 percent in value last year, after rising 63 percent in 2007. Data from the Exchange show that during 2008, its value fluctuated within a range of almost 270 percent: the highest level was reached on January 4 last year, amounting to nearly 5,300 points, while the lowest was recorded on December 2, when Crobex fell to just 1,430 points during morning trading, marking its lowest level since the end of 2004.

The alarming decline in total trading volume, and even more the ‘slide down’ of shares, is also indicated by the fact that all the most liquid shares from the Crobex system ended last year in negative territory. In this context, as many as eighteen shares lost more than 70 percent in value, eight lost more than 80 percent, while only five or six fell just slightly below the average decline of Crobex. Significant price reductions, especially in the second half of last year, did not spare even the ‘popular’ shares, i.e., those in which the largest number of small investors – citizens – invested, namely the shares of HT and Ina, which were also the most liquid shares of the past year. Specifically, HT’s share ended the year with the smallest (among the more liquid shares) price decline of 43.5 percent, with over 2.3 billion kuna in trading volume, while Ina’s share, despite the growth it achieved before the takeover process by MOL, ended with a price 58 percent lower, achieving 1.8 billion kuna in trading volume. Among other liquid shares, slightly smaller declines than the average of the exchange were recorded, for example, by the shares of Atlantic Group, Belišća, and Podravka.

The biggest losers last year were, however, shareholders who invested in shares of the shipping and construction sectors. Namely, shares of all four domestic shipping companies: Jadroplov, Tankerska, Atlantic, and Uljanik lost more than 80 percent in value during 2008. In the construction sector, the infamous position with the largest annual decline is held by the share of Viadukt, whose price decreased by as much as 92 percent. Among the remaining construction companies, for example, Hydroelektra-niskogradnja and Tehnika recorded declines greater than 80 percent. Interestingly, analysts say that last year, the largest declines were recorded precisely by those construction or shipping shares that had the largest growth the year before. For instance, the share of Ingra plummeted 79 percent last year, after having grown by as much as 300 percent the year before, while the share of Atlantic Shipping slid about 80 percent last year, after having nearly tripled in the previous year.

Although the first week of this year began with a rise in Crobex, it is still too early for any forecasts for this year, especially since we still have modest amounts, somewhere between 35 to 50 million kuna in regular daily trading volume. Only when the mentioned amount of regular trading volume at least triples, which is said to be some kind of optimum for local conditions, could we potentially talk about the beginnings of a recovery of the Zagreb Stock Exchange. In other words, analysts reiterate that there can be no full recovery of shares, nor of our overall market, without a greater influx of liquid funds. Therefore, they say that the movement of the domestic stock market in the coming months will be most influenced by domestic and foreign institutional investors, as well as the overall return of optimism, trust, and willingness of investors for further, new (and even larger) investments. (Nikola Prskalo)