The Croatian capital market is going through a cleansing phase, during which some companies that should not have been on the stock exchange will certainly leave, making room for issuers who, due to banks’ lower risk appetite for financing the real sector, would prefer to raise equity rather than debt capital, which presents an opportunity for institutional investors, it was stated at today’s round table Institutional Investors and Corporate Governance organized by Banka magazine.
Tonči Korunić, CEO of InterCapital, believes that there are too many problematic, overly risky companies on the Zagreb Stock Exchange today, and institutional investors, mainly pension funds, are increasingly taking an active role in restructuring from the previous unqualified management, effectively becoming traditional shareholders instead of investors. A new investment space for Croatian pension funds could be created, for example, by selling at least a smaller portion of the state stake in ‘strategic’ companies, as well as through changes in legislation.
These changes, likely starting next year, should allow pension funds to invest up to 15 percent of their assets in a single security instead of the current 10 percent. Petar Pierre Matek, CEO of Hanfa, estimated that this 5 percent difference amounts to about 3 billion kuna, stating that this should be sufficient for the capacities of the Croatian economy.
