Thursday, 19 May 2022

HUB Director: We Don't Expect Extremely High Increase In Interest Rates

ZAGREB, 19 May 2022 - Croatian Banking Association (HUB) director Zdenko Adrović said on Thursday that interest rates were not expected to rise extremely high but at rates that most people would be able to bear.

Responding to questions from the press at a HUB conference on the impact of euro adoption on the Croatian financial sector, Adrović said he did not know at what pace interest rates would grow, citing discussions in the Council of Governors at the European Central Bank.

"Some are calling for a quick and sharp increase in interest rates of 0.5 per cent already in July so that there would no longer be negative rates, while others are advocating a slower and milder increase. We will have to wait for the middle of the year," Adrović said.

He said that interest rates would most likely go up, adding that statistically 39 per cent of all loans were agreed at a floating interest rate and 61 per cent at a fixed interest rate. "This means that nothing will happen to those with the fixed interest rate, while in the case of those with the floating interest rate, the changeable part of the interest rate will change, while the margin will remain fixed."

 "We don't expect an extremely high increase, but one that most people can bear. We advise citizens to check their annuities and talk to their bank about the possibility of fixing the interest rate for a future period of three or five years if they want to avoid this risk," Adrović said.

 

For more, check out our business section

Saturday, 19 March 2022

Finance Minister Says S&P Report Very Positive

ZAGREB, 19 March 2022 - Finance Minister Zdravko on Saturday welcomed the affirmation of Croatia's credit rating by the Standard & Poor's credit rating agency.

"In the present circumstances, this is very good news. The report is very positively worded," Marić told a press conference.

Standard & Poor's on Friday affirmed Croatia's credit rating at 'BBB-/A-3' with a stable outlook, noting that the conflict in Ukraine might affect Croatia through weaker global demand, reduced tourism and inflation.

The agency expects the Croatian economy to grow at a stable pace in the next two years despite unfavourable inflation trends and the macroeconomic consequences of the war in Ukraine. The government is expected to remain committed to its reform programme, successfully absorb significant EU financing, and gradually rebuild the fiscal space it lost in the aftermath of the COVID-19 pandemic.

According to S&P, the Croatian economy is likely to expand at a rate of 3.7% in 2023 and 3.4% in 2024 and 2025. However, the growth forecast for this year has been revised down from 5.0% to 2.5% because of global geopolitical uncertainties following Russia's military intervention in Ukraine and rising energy and commodity prices.

Marić said that over the next month the government would update the official macroeconomic projections for 2022, including projections for growth and inflation. S&P projected the inflation rate for this year at around 6%.

The growth forecast downgrade is also the consequence of last year's growth, which was above all expectations, and uncertainties related to the direct and indirect effects of the Russian invasion of Ukraine, the finance minister said.

As for inflation, he said that it was expected to continue picking up in the first half of the year, while its movement in the second half would depend on geopolitical developments and energy and food price trends.

Eurozone entry is a positive risk

Marić said he was particularly glad that S&P had recognised the government's efforts to improve the absorption of EU funding as well as its efforts regarding the EU's Multiannual Financial Framework and the National Recovery and Resilience Plan.

He said that the implementation of the National Recovery and Resilience Plan was going very well, adding that everything envisaged under the plan had been fulfilled and that a new tranche of €700 million was expected in June.

S&P said that despite the complex inflationary context Croatia is on track for entry into the eurozone by 2023 and that the government, in line with euro adoption provisions, will reduce its fiscal deficit below the Maastricht reference level of 3% of GDP in 2023-2025.

Marić said that eurozone entry was a positive risk and would help increase the country's credit rating. He said it was very important for the government to maintain its good standing and trust in international financial circles, even as regards the preparation of an international bond issue, adding that the S&P report also contributed to the government's reputation.

Marić revealed that he had presented to S&P the government's package of measures to mitigate the impact of inflationary pressures, worth nearly HRK 5 billion, including a VAT reduction from 13% to 5.0% for a wide range of food products, such as fresh meat, fish, fruit and vegetables.

Asked by the press if he expected further increases in retail prices, he said this was hard to predict, expressing hope that the VAT cut would alleviate further price increases. He noted that retail chains had begun lowering prices even before 1 April, when the government package goes into force, adding that this was good and that it indicated high competition in the retail sector.

Marić said he had met with executives from the 10 leading retail chains in the country. "They expressed their readiness to be as receptive as possible, but noted that they were not the only link in the chain, because there are suppliers as well."

Commenting on media reports that people were increasingly buying certain items, such as cooking oil, Marić said that despite all concerns there was no need to stock up on food.

He said that the government was also working on measures concerning the inflow of Ukrainian refugees. They will be given both institutional and financial support, which will have certain repercussions for fiscal policy, he added.

According to the latest data, over 7,500 Ukrainians displaced by the war in their country have found refuge in Croatia.  

Marić denies co-owner of Jadranka hotel group booked accommodation for him

Responding to questions from the press, Marić denied an article on the Net.hr news website that Krešimir Filipović, co-owner of the Jadranka Group, had book him accommodation for four days at the Bellevue Hotel, owned by Jadranka, in 2019.

"That was the first time I met Mr Filipović. I had not had any direct or indirect contact with him before that, nor are we in regular contact today," Marić said.

He said that all the loans to this company from the Croatian Bank for Reconstruction and Development had been approved long before his term in office, adding that the company was duly meeting all its obligations in that regard.

Net.hr wrote about Jadranka following a complaint by Arsen Mujagić, a civil society activist from Mali Lošinj on the northern Adriatic island of Lošinj, according to which one of Jadranka's owners is a fund owned by Russian citizens who have been placed under EU sanctions. 

Marić said that the Register of Beneficial Owners is public, and that everyone who condemns the Russian aggression on Ukraine agrees that the enforcement of sanctions is inevitable.

Earlier in the day, the Finance Ministry said it was not true that there had been a change of ownership in Jadranka after the article on Net.hr.

On 18 August 2020, Predrag Perenčević and Krešimir Filipović were entered in the Register of Beneficial Owners as the beneficial owners of Jadranka d.d. and there have been no changes since, the Finance Ministry said in response to Net.hr.

The Ministry said that Marić had not stayed in a luxury or presidential suite, stressing that the minister had booked the accommodation himself and paid for it.

Responding to the question about its ownership and whether Russians still had stakes in the company, Jadranka said recently that there had been a change of ownership in 2014, when the Zagreb-based Beta Ulaganja company became a full owner of Jadranka Group.

"Croatian citizens Predrag Perenčević and Krešimir Filipović have continually been the ultimate owners of Jadranka Group. Their financial assets and investments are managed by the Investment and Asset Management Company through Beta Ulaganja d.o.o., as entered in the Court Register and the Register of Beneficial Owners," Jadranka said then.

Tuesday, 22 February 2022

Finance Ministry Issues HRK 800M in Treasury Bills

ZAGREB, 22 Feb 2022 - Croatia's finance ministry on Tuesday issued HRK 800 million in treasury bills which mature in one year at the low interest rate is 0.01 per cent.

In advance of the maturity of treasury bills worth a billion kuna, the Ministry offered HRK 700 million for subscription. Financial institutions submitted bids totalling HRK 803 million and the Ministry accepted them all.

The balance of subscribed kuna treasury bills has now decreased by HRK 197 million to HRK 13.6 billion.

The next auction of treasury bills will be held on 1 March, said the ministry.

(€1 = HRK 7.532838)

Tuesday, 8 February 2022

ZSE Crobex Rises For Three Days In Row

ZAGREB, 8 Feb 2022 - The Zagreb Stock Exchange (ZSE) Crobex index rose by 0.44% to 2,141 points on Tuesday, thus being on the rise for three straight working days, and the specialised Crobex10 rebounded by 0.3% to 1,305 points after a mild dip on Monday. Broken down by sectors, the industrial index increased 2.75%, and the only one to weaken today was Crobexturist, which fell by 0.61%. The ZSE saw a turnover of 6.2 million kuna on Tuesday, 3.2 million more than the day before. The only stock that crossed the million kuna mark in trading was the Atlantska Plovidba shipping company, HRK 2.33 million. The price of its shares jumped by 2.96% to HRK 418. Forty-five stocks traded today, with 25 increasing and 10 decreasing in price, while another 10 were stable. (€1 = HRK 7.526770)
Tuesday, 8 February 2022

Finance Ministry Issues HRK 1.76 bn in Treasury Bills

ZAGREB, 8 Feb 2022 - The Croatian Ministry of Finance sold HRK 1.76 billion worth of treasury bills at an auction on Tuesday.

The bills mature in one year and the interest rate is 0.01 per cent, the same as at the previous auction in January.

In advance of the maturity of treasury bills worth HRK 1.86 billion, the Ministry offered HRK 1.6 billion worth of treasury bills for subscription. Financial institutions submitted bids totalling HRK 1.76 billion and the Ministry accepted them all.

The low interest rate of 0.01 per cent is the result of a large surplus of liquidity in the domestic financial system, exceeding HRK 70 billion.

The balance of subscribed kuna treasury bills has now decreased by HRK 94 million to HRK 13.6 billion.

The next auction is set for 15 February.

(€1 = HRK 7.526770)

Tuesday, 1 February 2022

Croatia Issues €1 bn Bond on Domestic Market

ZAGREB, 1 Feb 2022 - Croatia has successfully issued a €1 billion bond on the domestic market with which it will reschedule two securities from 2017 and 2019, Finance Minister Zdravko Marić told Hina on Tuesday.

The new bond is due in 2030 with a yield of 1.39% and coupon interest of 1.25%.

The issue was arranged by Erste & Steiermärkische Bank, OTP banka, Privredna banka Zagreb, Raiffeisenbank Austria, and Zagrebačka banka.

The new bond will reschedule a bond due on 5 February in the amount of €500 million, issued in 2019 with 0.5% coupon interest, and a bond due due on 7 February in the amount of HRK 3 billion, issued in 2017 with 2.25% coupon interest.

Marić said interest in the new bond surpassed the target issue amount by 40%, totalling €1.4 billion. Among the investors were pension funds, banks, insurance and investment companies.

"The new issues testifies to Croatia's good position on the capital market, which is in line with previous issues, and the success of the new issue also reflects Croatia's upward trajectory among the rating agencies. In two of the three most important agencies we are at the investment grade level, where we belong," Marić said.

The next steps towards introducing the euro will additionally improve Croatia's status, notably regarding the additional decrease of the risk premium, which is especially important in the context of the current pressures on the growth of reference interest rates, geopolitical developments and energy prices, Marić said.

The new issue reflects Croatia's good reputation on the domestic capital market as well as the strength and liquidity of the domestic financial industry, he added.

A €1.25 billion bond issued in 2014 is due in May and a €1 billion bond issued in 2011 in July.

(€1 = HRK 7.529067)

Tuesday, 1 February 2022

ZSE Crobex Up For 3 Straight Days, HT With Largest Share Buyback Transaction

ZAGREB, 1 Feb 2022 - The Zagreb Stock Exchange Crobex index rose 0.60% to 2,145.45 points and the specialised Crobex10 grew 0.37% to 1,306.33 points on Tuesday. 

Today's turnover totalled HRK 7.5 million, or 3.6 million more than on Monday.

ZSE block trading marked by HT share buyback transaction

Today the Croatian Telecom (HT) stated that it "has executed the largest share buyback transaction in its history," which amounted to 81.6 million kuna, or HRK 183 per share.

"Our share buyback strategy clearly demonstrates our strong focus on value creation to our shareholders," the HT says, adding that now it "holds in total 866,830 treasury shares, representing 1.082894% of the Company’s issued share capital. Share capital amounts to HRK 10,244,977,390.25, and is divided into 80,047,509 shares without nominal value."

Forty-four stocks traded today, with 15 gaining and 13 losing in price, while 16 were stable.

(€1 = HRK 7.529067)

Monday, 31 January 2022

Minister Announces New Call for Applications for Subsidised Housing Loans

ZAGREB, 31 January, 2022 - Construction Minister Darko Horvat on Monday announced a new round of applications for subsidised housing loans, noting that this year HRK 50 million would be spent for that purpose and that a public call for banks to submit their offers would be published in mid-February while loan requests would be submitted as of 21 March.

A call for citizens to apply for subsidised housing loans could be published in mid-March, Horvat said.

Since the relevant legislation is aimed at encouraging demographic revival, urban regeneration and reducing the number of young families emigrating from the country, the call will be open until the subsidies are spent, Horvat said in a post on his ministry's website.

The ministry plans to invite, on 16 February, a call for interested credit institutions to submit their offers regarding interest rates, as the first step towards publishing a new call for applications by citizens.

The ministry expects to publish a call for applications for subsidised housing loans on 9 March, when citizens will be able to start submitting their loan applications to banks.

On 21 March, banks are expected to submit, on behalf of their clients, requests for subsidies to Croatia Real Estate Agency (APN).

The ministry recalls that 22,169 requests for subsidised housing loans were granted between 2017, when the scheme was introduced, and March 2021.

In the families that use housing loan subsidies, more than 4,600 children have been born since 2017 and 13,130 children under 18 have been reported in the loan requests.

More than HRK 456.7 million has been invested in state-subsidised housing loans so far.

Wednesday, 4 August 2021

Zagreb Stock Exchange Indices Close Mixed

ZAGREB, 4 Aug, 2021 - The main Zagreb Stock Exchange (ZSE) indices closed mixed on Wednesday, with the Crobex increasing by 0.20% to 1,957 points and the Crobex10 decreasing by 0.13% to 1,204 points.

Regular turnover amounted to HRK 4.25 million, roughly the same as on Tuesday.

The only stock to pass the turnover mark of one million kuna was that of the HPB postal bank, turning over HRK 1.13 million. Its price went up by 3.6% to HRK 575 per share.

A total of 41 stocks traded today, with 16 of them registering price increases, 12 recording price decreases and 13 remaining stable in price.

(€1 = HRK 7.490424)

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

Tuesday, 3 August 2021

Zagreb Stock Exchange Indices Up Slightly

ZAGREB, 3 Aug, 2021 - The main Zagreb Stock Exchange (ZSE) rose on Tuesday for the second consecutive trading day, with the Crobex increasing by 0.21% to 1,953 points and the Crobex10 by 0.38% to 1,205 points.

Turnover at the close of the trading session was HRK 4.26 million, roughly half as much as on Monday, and none of the stocks passed the turnover mark of one million kuna.

The highest turnover, of HRK 801,000, was generated by the stock of the Valamar Riviera hotel company. It closed at HRK 30 per share, up 1.69% over Monday.

A total of 37 stocks traded today, with 12 of them registering price increases, 12 recording price decreases and 13 stagnating in price.

(€1 = HRK 7.498284)

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

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