Fierce reaction from investors to the Government’s announcement that it is considering allowing citizens to exit the second pillar of pension savings marked last week’s trading on the Zagreb Stock Exchange, during which the Crobex fell by more than five percent.
The Crobex index fell by 5.35 percent last week, to 1,601 points. Only on Thursday, it lost 5.63 percent, diving to 1,567 points, the lowest level since early December, due to the negative reaction from investors to the Government’s announcement that they are preparing changes to the pension insurance law that would allow citizens to exit the second pillar of pension savings. As analysts point out, investors are concerned about how the stock market could maintain liquidity without the presence of pension funds, which accounted for 63 percent of total trading on the stock market last year. Even in the period of very low liquidity that the domestic market has recorded over the past five months, ‘pension funds’ have been responsible for maintaining at least some liquidity. However, on Friday, there was a calming of negative reactions from investors, following reassuring statements from politicians, and stock prices recovered some of the losses.
The regular trading volume in shares last week amounted to only 146.5 million kuna. "Next week, we can expect low liquidity on the ZSE, while investors will monitor movements on global stock markets. If the U.S. government announces details related to the plan to rescue local banks next week, we could witness positive sentiment on global markets, and consequently, a spillover of the same onto the domestic capital market," believes Goran Nimac, an analyst in the Economic Research department of Hypo Alpe Adria Bank. The biggest focus of investors last week was again on T-HT shares.
