Tuesday, 30 March 2021

Zagreb Stock Exchange Indices Rise Following Gains on European Stock Markets

ZAGREB, 30 March (Hina) - The Zagreb Stock Exchange (ZSE) indices on Tuesday went up by around one percent, following an increase in the value of indices on European stock markets, with investors focusing on the Podravka food and pharmaceutical company.

The Crobex went up by 0.89% to 1,867 points while the Crobex10 rose by 1.08% to 1,170 points.

Even though many European countries are in lockdown to prevent the third wave of the coronavirus epidemic, European stock markets are growing as investors hope economic recovery will accelerate.

Regular turnover on the Zagreb Stock Exchange today amounted to close to HRK 5 million, around HRK 400,000 more than on Monday.

The only stock that crossed the million kuna turnover mark was Podravka, which generated a turnover of HRK 1.05 million, with its price going up by 2.27% to HRK 540.

A total of 35 stocks traded today, with 12 of them recording share price increases, 6 registering price decreases and 17 remaining stable in price.

(€1 = HRK 7.567224)

For more about business in Croatia, follow TCN's dedicated page.

Tuesday, 30 March 2021

Porto Baroš to be New Marina for Super Yachts? Possible Expansion Outside Baroš Controversial

March 30, 2021 - The talk of the new marina for super yachts in Rijeka, Porto Baroš, brings both the hype of development and concerns for public interest.

Porto Baroš in Rijeka, a marina with the potential of 500 ties, is the subject of a public call to be assigned the concession for the next 30 years. The call offers the possibility of expanding to the travel port's entire area, reports the Rijeka-based Novi List daily newspaper. The call was open a month ago. The decision is expected to be known in the following ten days, after which the Ministry of Sea, Transport, and Infrastructure will decide to assign the concession that will be delivered to the Croatian government.

The trading company ACI-Gitone, owned by ACI (Adriatic Croatia International Club) and Lürssen (German yacht company), answered the public call with an investment offer of 363,7 million kunas.

As Novi List learns, ACI- Gitone plans to ask for the expansion of concession to the area owned by Rijeka Port Authority and currently functions as „the port for big yachts". If approved, the Rijeka marina would become the biggest in all of Croatia.

Oleg Butković, minister of the Sea, Transport, and Infrastructure, is very happy about the offer of ACI-Gitone.

„This investment makes me happy as we know that with such a marina capable of hosting megayachts comes a series of additional services. Rijeka and its surroundings must take such opportunity", said minister Butković.

Mayoral candidate critical of the offer

On the other hand, the left-green party Možemo! (We can!) mayoral candidate for Rijeka Nebojša Zelić is opposed to the investment, says Novi List.

Zelić adds he has no problem with the concession for Baroš, but he has issues with the idea of expanding concession to the larger area of Travel coast and Molo Longo.

nebojsa_zelic.jpg

Nebojša Zelić, screenshot / Možemo! Politička platforma

„This is against public interest given that the concession is given to a minimum of 30 years and there is a possibility that the citizens could be denied access to the sea. That's problematic as it opposes the law of concessions which forbids changing the subject of the public call and in this case that is the expansion of the concession", said Zelić.

He points out that Rijeka's waterfront and Molo Longo unlike Baroš are not nautical tourism and that experience showed how much these places are valuable to the locals. „If these places are shabby, that's the problem of bad management by Rijeka's Port Authority and citizens can't be the hostages of bad management by the Port and the City of Rijeka", said Zelić. He also accused the leading party Croatian Democratic Union (HDZ) for controlling the most valuable city property through Port Authorities. Zelić's party colleague Sandra Benčić said that the current General Urban plan in Rijeka disables nautical tourism port on Rijeka's waterfront and Moro Longo. She says that can change and that HDZ is counting on it if they get the majority in the city council on the upcoming local elections in May.

„I believe that Rijeka citizens will know to say no to denying access to the sea. We will publicly step out in front of the government to disrupt the expansion of the concession and prevent HDZ's interest being above the public's interest, and we will fight in the parliament too", announced Benčić.

For more about investments in Croatia, follow TCN's dedicated page.   

 

Friday, 26 March 2021

Zagreb Stock Exchange Indices Close Mixed

ZAGREB, 26 March, 2021 - The main Zagreb Stock Exchange (ZSE) indices closed mixed on Friday, amid modest trading.

After falling for two days, the Crobex index rebounded slightly, rising by 0.09% to 1,848.06 points. The Crobex10, on the other hand, finished in the red for the third trading day, decreasing by 0.06% to 1,154.63 points.

Turnover at the close of the trading session was HRK 5.97 million, roughly the same as on Thursday.

The bulk of the turnover was generated by the stock of the Podravka food company, turning over HRK 3.4 million. The price of its share closed down 1.53% at HRK 516.

No other stock passed the turnover mark of one million kuna.

A total of 37 stocks traded today, with 14 of them recording share price increases, 10 registering price decreases and 10 remaining stable in price.

(€1 = HRK 7.570196)

For more about business in Croatia, follow TCN's dedicated page.

Friday, 26 March 2021

Voice of Entrepreneurs: Government Has Not Helped Travel Agencies

ZAGREB, 26 March, 2021 - The Voice of Entrepreneurs association warned on Friday of the difficult position of travel agencies in a year of the pandemic, during which they had lost over 90% of revenue, adding that the government had done nothing to help them.

"The media say that travel agencies have received billions of kuna in aid from the state, which is simply not true. Also, (Education) Minister Fuchs and (Tourism) Minister Brnjac are asking travel agencies to find the money to return vouchers given to passengers, and a new law is being mentioned, under which the agency is obliged to give its clients a refund within 15 days. However, it isn't said that travel agencies have on average lost over 90% of revenue over the past year," the association said in a press release.

It added that the owners of travel agencies could not get loans to refund their clients, that they were forced to sell their own real estate to cover the expenses and that they had not received a single penny of help from the state or any other institution.

The only aid they received is HRK 4,000 monthly grant for workers, but for every employee, the employer has to cover the additional cost of transport and other fixed costs, for which no solution has been found to date, the association said.

It said that fixed costs had not been covered either, and since they were closed, agencies could not cover all the costs.

Travel agencies "were not closed by the decision of the national civil protection team, but their operation is completely restricted by government measures," the association stressed.

For more about politics in Croatia, follow TCN's dedicated page.

Friday, 26 March 2021

A1 Croatia: "No Deal Reached With United Media Group on N1 Channel"

ZAGREB, 26 March, 2021 - The A1 Hrvatska telecommunications company said on Friday that no agreement had been reached with the United Media Group on the distribution of the N1 TV channel, and that as of 29 March the channel would no longer be available on their TV platform.

The company said it was ready to pay a much higher distribution price than justified for a longer period, but the United Media Group had set an additional condition and asked for a six-month contract only, despite the fact that the contract had usually been a three-year one.

"A1 Hrvatska cannot accept a six-month agreement because that means avoiding a real solution for us and our customers. Such a condition is manipulation ... which United Media Group uses for its negotiations with other operators which it is currently conducting, and it is using this situation to put pressure on state institutions in order to change the legal framework," the telecom said.

It said it is "still open for talks and cooperation with all providers of attractive programme content who are willing to cooperate and whose broadcasting is in the interest of users".

"Even after United Media Group has launched a media campaign trying to manipulate and exert pressure on us by calling commercial business negotiations media censorship, we were willing to continue negotiating until the last moment in good faith and in the best interest of our customers, seeking only a reasonable and viable offer for the distribution of the N1 channel," A1 said.

It added that despite the statements by the programme director that they were prepared to offer to distribute the N1 channel free of charge, that option had never officially been offered during the negotiations.

It has been recently announced that A1 cable provider will drop N1 television and Sport Klub channels from its programming package. The decision to replace some of the channels in their offer, including N1, was made solely due to unfavourable business conditions, the operator said.

In mid-March the United Media replied that "A1 didn’t have a single reason to make the decision they made and drop N1 and Sport Klub."

For more about business in Croatia, follow TCN's dedicated page.

Thursday, 25 March 2021

Zagreb Stock Exchange Indices Down For Second Consecutive Day

ZAGREB, 25 March, 2021 - The main Zagreb Stock Exchange (ZSE) indices fell on Thursday for the second day in a row, with the Crobex dropping by 0.38% to 1,846.46 points and the Crobex10 by 0.57% to 1,155.33 points.

Turnover at the close of the trading session was HRK 5.88 million, about 2 million higher than on Wednesday. An additional HRK 2.5 million was generated by a block transaction with shares of the Atlantic retail group, at HRK 1,470 per share.

The only two stocks to pass the turnover mark of one million kuna were the HT telecommunications company and the Podravka food company, each turning over HRK 1.1 million. The price of the HT share decreased by 0.53% to HRK 188, while the Podravka share shrank in price by 1.87% to HRK 524.

The winner of the day was the Sunce Hoteli hotel company, which saw the price of its share jump by 6.02% to HRK 176 following the announcement that it was in the process of being taken over by the Eagle Hills Zagreb Real Estate company, owned by a businessman from the United Arab Emirates.

A total of 37 stocks traded today, with 13 of them recording share price increases and as many registering share price decreases, while 11 remained stable in price.

(€1 = HRK 7.570626)

For more about business in Croatia, follow TCN's dedicated page.

Tuesday, 23 March 2021

Standard & Poor's: Tourism Vulnerable Point and Factor for Croatia's Economic Recovery

ZAGREB, 23 March, 2021 - Croatia's economic recovery from the pandemic recession hinges on the tourism sector's recovery, the Standard & Poor's agency said, assessing that recovery and protective mechanisms will offset the risks caused by the pandemic.

Croatia's economic recovery from the pandemic-induced recession is within reach as long as tourism picks up, S%P's said in its outlook released on Tuesday.

It recalled that Croatia's credit rating is 'BBB-/A-3', with a stable outlook.

Impact of COVID-19 pandemic blow to tourism

Croatia's economy is expected to expand by 5.1% this year, S&P's said in its latest outlook contracting Croatia's estimated GDP growth by half a percentage point.

In 2020, the country's GDP fell by 8.4% according to S&P's forecast, however this is 0.4% percentage points less than it had forecast in its autumn outlook in September.

In 2022 the economy is expected to grow by 3.5%, and by 2.6% in 2023 and 2024.

S&P considers that mass vaccination against COVID-19 is a precondition for economic growth which will relieve travel restrictions hence boosting tourism.

Tourism in fact has been affected the most by the pandemic, causing GDP to contract by more than 8% in 2020.

"This highlighted vulnerabilities due to Croatia being one of the most-tourism dependent sovereigns in Europe," S&P's said, adding that "despite prospects of a dynamic summer season, we assume that the tourism sector won't fully recover to the record pre-pandemic numbers over the coming two years." 

Strong protection mechanism

Even though this has left its mark on the balance of payments, Croatia still has strong protection mechanisms against potential external pressure with its high foreign reserves and its swap line with the European Central Bank.

Also, Croatia entered the pandemic period with an improved budget situation and the government could reach out to strong fiscal support measures to relieve the consequences of the pandemic on the labour market.

The budget deficit to GDP this year will amount to 2.9%, which is 0.1 percentage points better than the autumn outlook.

In 2020 the budget deficit amounted to 7.8% of GDP or 1.4 percentage points more than estimated last September.

Next year that deficit could be reduced to 2.0% of GDP and to 1.5% in 2023.

S&P's underlined Croatia's plan for "quick euro adoption is Croatia's key policy goal, after last year's entry into the Exchange Rate Mechanism (ERM II)."

Favourable financing conditions

Due to the pandemic, public debt jumped to a record 88% of GDP in 2020, "however, the government's debt profile benefitted from historically low funding costs and extended debt maturities."

This year it is expected to fall to 84.3% of GDP and below 80% again in 2024.

"We could lower the ratings on Croatia if, contrary to our expectations, external financing pressure was to build or if public finances failed to recover over the coming two to three years, pushing public debt up," S&P said.

The report recalls that Croatia is also entitled to ample EU funds under various envelopes including Next Generation EU and the Recovery and Resilience Facility in the coming years, which will probably contribute to economic recovery.

Additional support should be available for reconstruction efforts following the earthquakes that hit Zagreb in March 2020 and Sisak-Moslavina County in December 2020.

"Net inflows from the EU budget could also support fiscal buffers without unduly constraining investments, which underpins the importance of efficient preparation and the absorption of available funds," S&P's report notes.

For more about business in Croatia, follow TCN's dedicated page.

Friday, 19 March 2021

Croatian National Bank: "45% of Croatia's Citizens Support Euro Adoption"

ZAGREB, 19 March, 2021 - The percentage of Croatian citizens who support the adoption of the euro in February this year has reached 45%, up by four percentage points from 41% in a previous survey, conducted in March 2020, the Croatian National Bank (HNB) said on Friday.

The fourth public opinion poll on the adoption of the euro was carried out for the HNB by the Ipsos agency from 23 February 2021 to 1 March 2021.

Nineteen percent of citizens are against the adoption of the euro, while 26% are either against or in favour depending on other factors, and 10% of the respondents do not know, the HNB said.

Also, they said, an increasing number of citizens think that the effect of the euro will be positive. Some of the advantages they see include easier payment and business, as well as the fact that the euro is the common currency in the euro area, which would make Croatia equal to other members of the monetary union.

On the other hand, they see a decline in the standard of living and purchasing power as the main risk, and over a third of citizens think that the adoption of the euro will further increase prices.

To date, the poll has been carried out four times: in August 2018, in February 2019, in March 2020 and in February 2021. The survey is conducted on a nationally representative sample of 1,000 respondents, aged 18 to 79, using computer-assisted telephone interviewing (CATI), and it covers four thematic units: the use of the euro in the Republic of Croatia by foreign citizens, how informed citizens are on the adoption of the euro, citizens' attitudes to the adoption of the euro and their expectations.

The aim of the survey is to determine whether Croatian citizens support the strategic commitment of the government and the HNB to adopting the euro as the official currency in Croatia and whether they are aware of all the benefits that the adoption of the euro will bring to them and the national economy.

For more about business in Croatia, follow TCN's dedicated page.

Friday, 19 March 2021

Advantages of Euro Currency Significant but Economy Needs to be More Flexible

ZAGREB, 19 March, 2021 - Croatia will enter the euro area on 1 January 2023 at the earliest, and introducing the euro has a number of advantages but for those advantages to be greater the economy needs to be more flexible, including with regard to the labour market, a conference heard on Friday.

The conference, focusing on the introduction of the euro as the official currency in Croatia, was organised by the students' association Financial Club.

Croatian National Bank (HNB) Governor Boris Vujčić said in his opening remarks that Croatia cannot enter the euro zone before 1 January 2023.

"Whether Croatia will enter the euro area on 1 January 2023 or a year or two later, depends on when it will meet the nominal convergence criteria," said Vujčić, recalling that in July 2020, Croatia entered the European Exchange Rate Mechanism II (ERM II), a sort of waiting room for the euro.

He explained that the ERM II envisaged a minimum two years of participation in it so that a candidate aspiring to join the euro area can meet the nominal convergence criteria (Maastricht criteria). On the other hand, if it does not satisfy the criteria, which refer to the stability of the exchange rate, prices and interest rates, the budget deficit and the level of foreign debt, a country can remain in the ERM II indefinitely, Vujčić said.

He recalled a survey indicating that citizens fear that with the introduction of the euro the standard of living will deteriorate and prices will increase. However, surveys in countries that have already introduced the euro indicate that prices increased by 0.23 percentage points on average in the year when the euro was introduced, mostly for everyday goods such as coffee. Prices of such products are relatively lower so their increase could have been relatively high due to rounding off.

"That left the impression in public that prices increased more than they did," explained Vujčić, underscoring that the standard of living did not fall in any country that introduced the euro but rather it improved.

Ćorić: Biggest advantage to companies exporting to euro area

Minister of Economy and Sustainable Development Tomislav Ćorić said that it was clear that citizens would not start living better on the first day of introducing the euro, however, what points to better prospects was the fact that the macro environment in the euro area was free of risks that non-member countries were faced with.

The risk premium in all countries that entered the euro area has dropped, said Ćorić, noting that that was something that in normal circumstances should  bring benefits to Croatia, such as reducing yields on long-term security instruments and lower interest rates on commercial and consumer loans.

Considering, however, that we live in "fairly radical economic times," and a period of very low interest rates, the effects which countries that entered the euro area some ten years ago had would be somewhat lower, however, they would still be significant, he said.

The advantages are potentially biggest for export-oriented companies considering that the exchange rate risk will be eliminated, he said.

Ćorić said that the project for euro introduction was not an end in itself but was primarily a very good tool for Croatia's long-term economic growth and development.

Mačkić: Flexibility of labour market, final goods and services market

President Zoran Milanovic's economic adviser, Velibor Mačkić, conveyed the president's message saying that it was necessary to discuss the benefits and potential harm of Croatia joining the euro area.

Mačkić believes that Croatia has not developed its own institutions sufficiently and that that poses a problem. "The country needs a different economy, a much more flexible economy, to be able to benefit more significantly from the monetary union," said Mačkić.

He added that the labour market and the market of final products and services need to be more flexible.

Mačkić underlined the importance of an efficient fiscal policy and of the reform of the tax system which Mačkić believes needs to change from "a consumption-based to income-based tax system."

For more about business in Croatia, follow TCN's dedicated page.

Wednesday, 17 March 2021

Zagreb Stock Exchange: Indices Fall For Second Day Amid Weak Trading

ZAGREB, 17 March, 2021 - The main Zagreb Stock Exchange indices slipped on Wednesday by about 0.7%, falling for the second straight day amid a poor trading day of just over HRK 3 million.

The Crobex fell by 0.73% to 1,863 points and the Crobex10 fell by 0.68% to 1,172 points. Both indices dropped for the second day running.

All sector indices dropped too with the construction index falling the most by 5.93%. 

Regular turnover was a mere HRK 3.3 million or 2.2 million less than a day earlier.

Not one stock crossed the million kuna mark.

The highest turnover of HRK 676,000 was generated by the HT telecommunications company with the price of its shares plunging by 1.79% to close at HRK 192.50.

(€1 = HRK 7.6)

For more about business in Croatia, follow TCN's dedicated page.

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