Croatia Is the Link Between the Capital Markets Of the Western Balkans And the EU

Business has no borders, but in order to function well it needs links. Croatia is ideally located to provide those links between the European Union and the Western Balkans. Infrastructural connections are already in place. Now it’s time for Croatia to increase the role it can play in connecting capital markets.

The Zagreb Stock Exchange (ZSE) is the main actor here. Established in 1907, under the Austro-Hungarian Empire, the “Commodities and Valuables Division of the Chamber of Commerce”, as it was called then, quickly built traders’ trust throughout the monarchy.  Now, that trust has grown and the ZSE is making great strides to build an even wider network.

The first major step is the creation of SEE Link, which brings the Bulgarian, Croatian and Macedonian stock exchanges together. The link’s objective is to establish the regional infrastructure for the trading of securities listed on those three bourses. The system is scheduled to become operational in Q1 2016 and will provide access to all listed securities on the Bulgarian, Croatian and Macedonian stock exchange.

The other major step is further expansion or the acquisition of the Ljubljana Stock Exchange, with the latter becoming effective at the beginning of 2016.

The two bourses had shared a similar development path structure and potential as well as financial system framework. Now, all market participants will benefit from this acquisition. It will result in an increased range of financial products allowing investors to make investment choices reflecting their preferred risk-expected return mix. Currently, Ljubljana trades 105 securities out of which 45 are in equities.

An enlarged consolidated capital market will also ensure a broader range of financing sources. And, thirdly, investors interested in Croatian and Slovenian securities will have an opportunity to share a common view of the joint regional market.

Worth noting is the fact that Croatian investors already hold considerable stakes in Slovenian companies and Croatian institutional investors are among the largest buyers on the Ljubljana Stock Exchange including Croatian pension funds which have over €9 billion of asset under management.

Today, there are more than 150 companies listed on the Zagreb Stock Exchange, which offers a regulated market and a multilateral trading facility and 351 securities.

Over the past five years, the bourse has introduced new and innovative products to the domestic capital market such as market making and structured products trading, operating a multilateral trading facility. It also launched eight new indices and started issuing LEI (Legal Entity Identifier) codes. The ZSE is also planning to switch to Xetra, a new trading system which is expected to help facilitate cross-border investment flows, one of the aims of the EU Capital Markets Union.

The Zagreb Stock Exchange strongly supports this EU initiative as Croatia needs to mobilise capital to create more investment opportunities for investors and a greater choice of funding for companies.

Last year, the stock exchange reflected a stellar tourism season with increased growth in tourist sector equities, with a 23.7 per cent annual growth of the CROBEXturist index.

Now, with a new government committed to enhance the country’s business environment and endorse reforms and modernisation across the economy, the future outlook on capital markets is promising.


The editorial was co-authored by

Photo Shape Editor: https://www.tuxpi.com/photo-effects/shape-toolIvana Gažić is President of the Management Board of the Zagreb Stock Exchange. She is also a Member of the Supervisory Board of Metal Industry Varaždin Plc. and Central Depository and Clearing Company Plc. as well as the president of the supervisory board of the SEE LINK Skopje, a legal entity founded in 2014 with the aim to establish regional order routing service between Bulgaria, Macedonia and Croatia. Following the acquisition of the Ljubljana Stock Exchange in late 2015, she has also become president of its supervisory board.


The views expressed in this opinion editorial are the author’s own and do not necessarily reflect Emerging Europe’s editorial policy.

About the author

Vedrana Jelušić Kašić

Vedrana Jelušić Kašić

Vedrana Jelušić Kašić is EBRD Director, Croatia. She joined the EBRD in London in 1998 and was transferred to the Zagreb office in 2005 to manage the agribusiness operations in Croatia and the Western Balkans. Before she joined the EBRD, she gathered business experience at the Central Securities Depository of Italy in Milan, Merrill Lynch in Boston, the Croatian National Bank and Raiffeisen bank in Zagreb. She has a BA in Finance from the University of Economics, Zagreb, and a MA in International Economics and Finance from Brandeis University, Boston.

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