Can the Payment of HT’s Dividend Revive the Zagreb Stock Exchange?

Cautious trading is expected today on the Zagreb Stock Exchange due to weak sentiment in global markets, where investors fear a deepening debt crisis in the Eurozone, which has caused the euro to fall against the dollar to its lowest level in four years.

Of the nine analysts from brokerage firms who participated in Hina’s survey, five expect stagnation of the Crobex today, while four expect a decline. The Crobex index weakened by 0.58 percent last week, to 2,063 points. After four weeks of losses, it is now up only 59 points, or 2.9 percent, compared to the beginning of the year. The Crobex10 index, on the other hand, weakened by 1.05 percent last week, to 1,120 points. Regular trading in shares amounted to 80.5 million kuna, which is about 26 million less than the previous week. “Although global stock indices rose sharply last week, Crobex did not follow this trend, weakening for the fourth consecutive week. The reason lies in low liquidity, which causes any slightly stronger selling pressure to result in a larger drop in stock prices,” says Žaran Perić, an investment advisor at the investment company EA Sistem. Even the data on the increase in the Baltic Dry Index (BDI) last week by 8.9 percent, to 3,929 points, failed to cheer investors in the domestic market, or stimulate investments in shipping stocks, adds Perić. Encouraging signals are not coming from global markets. This morning, stock prices sharply fell on Asian exchanges, while leading European indices are balancing on the edge between negative and positive territory. Most concerning is the drop in the euro against the dollar, for the first time since April 2006, below the level of 1.23 dollars.

“Investors fear that the measures taken to save the Eurozone will slow economic growth in those member states that will finance these measures,” notes Perić. Among today’s significant events in the domestic market, the payment of HT’s dividend to shareholders stands out. A dividend of 34.05 kuna per share will be paid, totaling 2.79 billion kuna. Considering ownership stakes, Deutsche Telekom receives 51 percent of the total dividend amount, the Croatian Veterans Fund 7 percent, and the Government 3.5 percent. The remaining shares in free circulation are held by private and institutional investors, who will receive 1.07 billion kuna. “The question is how much of that money will return to the market, given the negative sentiment that has persisted in the domestic market in recent weeks. However, I expect that some of the money will return, primarily to HT’s shares, and perhaps to some other stocks. Today, I expect the greatest focus of investors to be precisely on HT’s shares,” concludes Perić. (H)