Market on its knees, Crobex lowest since early December last year

At the Zagreb Stock Exchange, investors are reacting strongly today to yesterday’s announcement by the Government regarding the proposed amendment to the pension insurance law, which would allow citizens to exit the second pillar of pension savings, and the stock index has plunged to its lowest level since early December.

The Crobex index at 12:00 PM stood at 1,589 points, što is 4.28 percent lower than yesterday’s closing. During the morning, it dropped to as low as 1,580 points. This is the lowest level since December 5 last year, when it was at 1,539 points. Regular trading in shares reached 21.7 million kuna.

"The mood on the stock exchange is extremely negative. Investors reacted quite violently to yesterday’s announcement by the government that it would propose amendments to the pension insurance law and allow citizens to exit the second pillar of pension savings, which is why the Crobex immediately plunged 4.5 percent at the opening of the exchange," says Diana Knezović, investment advisor at the brokerage firm Ilirika Securities.

At yesterday’s meeting of the Economic Council, Prime Minister Ivo Sanader stated that Deputy Prime Minister Damir Polančec and Finance Minister Ivan Šuker are responsible for drafting the proposal for amendments to the Pension Insurance Act, which would allow citizens to express whether they wish to remain in the second pension pillar or transfer their share in pension funds to the state, which will guarantee them a pension from the first pillar. "This news has brought the market to its knees. Participants are eagerly awaiting a more detailed proposal from the Government regarding the announced changes and the reactions of the pension funds themselves," says Knezović.

According to her, although trading on the stock exchange has been extremely low in the last five months, pension funds, along with investment funds, have so far been generators of at least some liquidity. The most liquid stock is T-HT with a turnover of 8.35 million kuna and a price drop of two percent, to 217 kuna. The company announced yesterday that it will publish last year’s business results on February 27. It is also expected that the Management will announce a proposal to resolve the company’s large cash position.

Following is the stock of Atlantska plovidba, which achieved a turnover of four million kuna, and its price is down 3.81 percent, to 767 kuna. The stock of Dalekovod, with a turnover of 1.4 million kuna, recorded a price drop of 4.0 percent, to 326 kuna. Among the millionaires, only the stock of IGH has so far been included, with a price drop of 6.03 percent, to 2,650 kuna. In negative block, due to a price drop of more than 10 percent, during the morning, the stocks of Dioki, Adriatic Oil Pipeline, Tisak, Medika, and Croatia Insurance were found.