Issue 3 -  2002/03

 ISSN 1311-8978

SOME ACTUAL ASPECTS OF CROATIAN CAPITAL MARKET DEVELOPMENT

Marijan Cingula, Milivoj Redep, Marina Klacmer

University of Zagreb, Faculty of Organization and Informatics

Pavlinska 2, Varazdin, Croatia

Received: 25.10.03; Cited: 05.12.03

Abstract

The process of globalization in Croatia is supported by full acceptance and enforcement of International accounting standards but capital market is still very slow. With two stock exchanges, fully equipped and ready for serious transactions, Croatia is still waiting for real investors and stimulating trading climate. All legal and other institutional prerequisites for capital market functioning are but in previous period activities were almost completely brought to a standstill. The financing of company development through initial public offering is entirely unknown to Croatian companies and the small number of those who nevertheless tried issuing their own shares have had very unfavorable experiences because they did not meet the satisfactory response of investors. The state did not stimulate the capital market development because it sold all companies which had their shares in the portfolio of state funds through the so called public tenders or direct settlements so that only selected individuals could buy attractive companies, at privileged conditions at that. Domestic institutional investors are newly established through the pension fund reform, which should result in activating investment pension funds.

Key words: capital market, institutional investors, pension fund

1. Preface

Croatia belongs to the group of Middle and Eastern European countries in transition from earlier state regulated market towards political democration and free market economy tending to be included in all European and worldwide integrations.

Croatia, like other countries in transitions has found itself in the situation in which it must develop the financial market, especially capital market with all the necessary financial and non-financial institutions. Despite the great success of a macroeconomic stabilization program, capital markets in Croatia developed relatively slowly due to wartime and regional security risks. However, financial structural reforms were undertaken in 1993 - 1995.

Now, it has to be emphasize that the capital market in Croatia plays an unavoidable role within the financial market. The Zagreb Stock Exchange (ZSE) is the most important official stock exchange in Croatia. But also there is a very important stock exchange in Varazdin. At first it was a Over–the-Counter market but from the last year it works as a SE. Shares, bonds and also rights (issued by Ministry of building and reconstruction) are traded in both markets. It is expected that Croatian financial system will fill in the gap quickly since activities of investment funds, pension funds and stock and bond markets are growing fast.

After many dry years, Croatian capital market in the year 2000 had a very encouraging start. That year, the opposition won the elections, and this was a reason that share prices started a rise. The most traded stocks this last years on Zagreb Stock Exchange (ZSE) were Pliva, Zagrebacka banka and Podravka. Varazdinska banka also had high volume, but this was mainly due to the takeover bid by Zagrebacka banka. [1] The shares of Pliva and Zagrebačka banka were listed at the beginning of 1996. simultaneously on the Zagreb Stock Exchange and on the London Stock Exchange, but from 2002 only shares of Pliva are on the London Stock Exchange.

Croatian economy registered a recovery with GDP growth estimate at 3.7% after 1.5% in 1999. The recovery was lead by a strong tourism season, export growth and increased private consumption.[2] But it has to be pointed that Croatian tourism did not reach yet its real potential as it had in the past years. In the future, Croatian government expects that Croatia has real chance play the more important role, especially on the Balkan market. This fact is related with slowing of the Euroland growth.

2. Position of Croatia in relation to some other european countries in transition

There are reliable economic indicators, which show the relation of Croatia to other European countries in transition of similar size. Although these indicators are regularly being observed and published in specialized publications[3], they are sometimes inaccessible to the general public.

The increase in gross national product is one of the indicators that show to what extent the production or the value of services increases during a year period in a specific country. If expressed in percentages, it should be very high in all those countries which had a low national product in the previous period (for example: due to war, economic crisis and crisis due to transition, crisis in the region or accidents due to natural forces, catastrophes or similar). Considering that Croatia had a relatively high growth rate of 6.5 percent in 1997 (at the time only the following countries in transition had a higher growth rate: Latvia 8.6 percent, Estonia 11.4 percent, Lithuania 7.3 percent and Poland 6.9 percent), it is very significant that this year's estimates by prominent banks that, after a last year's decline to 2.7 percent, Croatia will show a further decline in national product by 1.5 percent in 1999. Beside Croatia, the following countries show a negative growth rate of national product: Bulgaria –2.5%, Czech Republic –1.0%, Romania –3.0%, Russia –4.0% and Ukraine –4.0%. At the same time, the following countries show an increase in national product in this year: Slovenia +3.0%, Slovakia +1.5%, Poland +3.5%, Lithuania +3.5%, Latvia +3.0%, Hungary +3.8% and Estonia +2.5%.

Croatian real growth rate was about 3.5 percent in 2002 and for the 2003 it could be expected that GDP growth will be from 3,5 to 4 percent.

The main source of high grow rate in the past years in Croatia is connected with increased private consumption, expansion in banking sector, investments in reconstruction and road construction, but also with an increasing import of technology equipment in private sector. Through the 2002 export was not taking the best part in economy activities[4].

The real grow rate during the three years can be best seen in the picture that shows quarter percentages of Croatian GDP (Chart 1.). This significant increase in grow rate is a result of active intern and extern economic policy which was hold by Croatian government. Those economy activities lead Croatia to the one of the best position between fast growing countries in transition.

Chart 1: GDP – Growth rates in Croatia in period from 1998 – 2000.

 Source: Hypo-Alpe-Adria-Bank, Outlook 2001., Croatian Capital Market Research, Available from: www.hypo-alpe-adria.com

The macroeconomic indicators show that industrial production in January 2003 is  0,9 percent bigger than it was in 2002. Also, statistic indicators show that unemployment is  10,7 percent lower than it was January last year. The last year (December, 2002) average salary was 3.839 kuna, what is  5,3 percent more than it was in December 2001. [5]

Croatian Government began implementation of the stabilization program in 1993, which resulted in the decreasing of the relatively high inflation rate to the lowest in all transitional countries what was lead to the stabilization of the national currency.[6]

Increasing credit activity in the banking sector during the 2002 had influence on the most of monetary mobility in the country. However, it is expected that during the 2003 the credit activity will decrease for 50 percent in comparison with last year. The reason for this presumption is connected with new credit policy of The Croatian National Bank. It is expected that new credit policy will have positive direction on new and better investments and this is economy at the first place. 

Croatia has a reason to be proud of its low inflation during the past several years, and of the stability of its domestic currency.  Nevertheless, such a condition is not a result of a successful economic policy and export but of a strict monetary discipline to the detriment of the poorest social classes. The convertibility of Croatian kuna (HRK) is only with difficulties maintained at the level of national spending, and it is non-existent at the level of capital investments (that is the reason why there is no free investing by Croatian citizens into foreign banks or investment funds and therefore no reciprocity of foreign investors). The inflation estimates for this year foretell that Croatia should have an inflation of only 4.5 percent, but in order to get a realistic picture of other countries one should know that according to same estimates, the inflation will be lower in the following countries: Bulgaria 4 percent, Czech Republic 4 percent, Latvia 3.5 percent, Lithuania 4.0 percent. Still, a higher inflation in some other countries, e.g. Romania 45 percent, Russia 80 percent and Ukraine 55 percent could be to our comfort.

Inflation in Croatia doubled in 2000 from 4.4 to 7.4 percent. But after the government monetary policy the percent of inflation decreased on 2,2 percent what is on the level of Euroland. 30. November 2000 Croatia became a member of the WTO and that was also a reason why the inflation is dampening. Becoming a member of WTO Croatia had to cut certain tariffs and duties on various goods and these activities have influence one reducing some cost.[7]

It is to presume that during the year 2003 the percentage of inflation will be relatively low (under 3 percent). However, possibility of war in Iraq has strong influence on increasing price of oil and oil products. This fact could have strong influence on the growth of the percentage of inflation that could be higher than it was expected at first. [8]

Trade and budget deficits exist in all countries in transition, and unfortunately in Croatia, too. Croatia has signed the stand-by agreement with the IMF under the specify terms targeting a deficit of 4.9% of GDP. However, it is expected that the balance deficit during 2003 could decrease from 5 percent to 4 percent of GDP because of the influence of IMF and The World Bank. But, the external position of Croatia has shown an encouraging development. The current account deficit, that reached USD1,530m or 7.5% of GDP in 1999, had been reduced to around USD768m or 4% of GDP in 2000. [9]

All mentioned economic indicators show that, in joining market economy, Croatia is between fast growing countries in transition. The prognosis for Croatia in 2004 made by The Vienna Institute said that Croatian GDP will grow for 4,5 percent in 2004, what will have strong influence on decreasing the percent of unemployment. Only one country with higher growth than it is in Croatia is Bulgaria with a growth of 5 percent. Hungary, Czech Republic and Poland will have a rate of growth between 3 and 4 percent. [10]

Chart 2: Prognosis for 2004. 

 Source: Hrvatska među brže rastućim zemljama i u 2004., Poslovni tjednik, No. 51, Zagreb, p. 13.

The experience of many developed countries confirms that states with developed capital markets are growing more strongly and are more stabilized than others. Capital market in Croatia is not developed enough, in spite of even two operating stock exchanges.

Figure 1: The total share value in the official turnover in Croatia [11]

(000 kn; 1 E = 7,3 kn)

* From 1996. to 2001. Varazdin SE was organized as OTC Market

Source: Internal statistic data

Figures above show that Croatia’s capital market in total is still undeveloped and turnovers are not comparable even to the medium-sized stock exchanges in small countries (such as Cyprus, for instance). Traditionally, ZSE is major Croatian institution, but due to the listing of investment funds, Varazdin SE is rapidly growing in shares trading sector.

Chart 3: Share turnovers at ZSE and VSE

 Source: Internal statistic data from the ZSE and the VSE

The most traded shares on Zagreb Stock Exchange (ZSE) were: Pliva, Zagrebacka banka and Podravka. Pliva is the largest pharmaceutical company in Croatia. Pliva focuses its business strategy on the pharmaceutical business and but also puts a lot of effort in research and development. Pliva dominates the Croatian market and has a strong position in the neighboring countries[12]. Zagrebacka banka is one of the biggest bank in Croatia. The price of Zagrebacka banka shares was rising almost constantly during last years what was connected with takeover by UniCredito of Italy. The Podravka Group is the largest manufacturer of branded food products and the second largest manufacturer of pharmaceuticals in Croatia. Podravka is also one of the five largest suppliers of branded food products in Central and Eastern Europe[13]. Today the price of Podravka shares is around 200 kuna.

 The most of turnovers on the Varazdin OTC market in the passing years was made with privatization investment funds (PIFs). At those years, PIF shares in trading growth rapidly, but also initially increases and later a falling in their prices.

Chart 4: Comparation of all turnovers ZSE and VSE in 2002.

 Source: Internal statistic data from the VSE

Zagreb Stock Exchanges is a dominant institution in Croatia by its turnover because it trades very active with state bonds. However, VSE gives an attribution to the development of Croatian capital market, especially in trading with shares. With this kind of orientation (transparency in trading with domestic and foreign papers) VSE helps in creating and increasing investment climate in Croatia. This is its way for encouraging foreign investors.   

The picture above shows that VSE made higher turnover with shares and rights than it was trade with same papers, in the same period at ZSE which was for long time leading national stock exchange. This positive affect could be explained as a needed and wanted reaction from Croatia capital market. In the big success of VSE the main role had PIFs. With theirs shares it was intensive trade in the moment when they were transferring it self from PIFs to close-end investment funds.  By intern statistic data of VSE, the trade with those shares was about 45 percent of all turnovers from the last years. The VSE uses several types of quotation for its activities.  There are: Quotation I., Quotation II., PIFs Quotation, Quotation of Rights and several segments of trading: Free market, Auction market and Public auction. In the last year, VSE by its turnovers made a record what is the best presented at the picture.

Viktor Lenac, Croatia’s only large shipyard and Pliva, Croatia’s largest pharmaceutical company have shares listed in the Quotation I. on the ZSE. Since 1996, Pliva’s shares have been listed on the London Stock Exchanges too. There is only one company with its shares in the Quotation I. on the VSE. This is Dom fund, the first investment fund that is in the highest Quotation on Croatian capital market.  Pliva shares, Podravka shares and Dom fund shares are the most active shares at this moment on Croatian capital market.

Rapid develop of VSE shows that Croatian capital market becoming more open and flexible through the region and this is a realistic sign that Croatian economy becoming more open for foreign investors.

Without regard to the real cause of the obvious standstill in trading on Croatian capital market, the consequences imply that the Croatian capital market is sensitive to all unfavorable influences, exogenous as well as endogenous[14]. The decline in turnover on the underdeveloped market lead to an even greater falling behind the markets of developed countries, which nevertheless, very quickly recovered from the shock and ended the year with record values of their stock exchange indexes. The standstill in the development of the Croatian capital market was mostly influenced by the following endogenous factors:

·         high interest rate which induced small shareholders and trading companies to invest high amounts into dubious savings-banks and unreliable banks, and

·         insufficient political security and stability, as a result of the events in the whole region, but additionally intensified by internal affairs of the country, which discouraged foreign investors.

If one bears in mind that in Croatia institutional investors are not so active as they should be, that there is not enough domestic free capital, and that foreign capital bypasses the whole region, then it stands to reason why the Croatian capital market is not one of the better markets between transitional countries.

3. Actual influencing factors in Croatia

There are several influencing factors actually connected to the Croatian capital market. The so-called banking crises are not a topic any more. The crisis ensued upon the extraction of capital out of some banks, which led to their insolvency few years ago. The investors who invested in those banks were only partially reimbursed for their losses because the state assumed the obligation of securing saving deposits only to the amount of HRK 100,000 (ca US$ 14,000). Even for this limited intervention the state had to reach for the budget funds, filled by taxpayers' money. The citizens and economic subjects recovered thus by mutual efforts the bank losses, which were a result of their bad placement policy or of political tolerance used by some debtors who did not pay off their debts with no consequence whatsoever. It is well known that some individuals, so called Croatian tycoons, took up enormous loans in order to buy companies at privileged prices and when they became major shareholders they did not fulfill their obligations toward banks nor did they invest efforts in conducting the business activity of their companies. Their primary aim was to sell assets (in most cases real estate) and afterwards to transfer the capital to their private accounts abroad or to finance different political activities which were economically not founded and completely inaccessible to the public. According to opinions of some analysts, approximately US$ 5 billion were transferred from Croatia. There are numerous examples which show how some companies were bought and sold far from the eyes of the public, without stock exchanges, brokers and without control of the Croatian Securities and Exchange Commission.

3.1. Financial and banking system

Last year several changing processes happened in Croatia at domestic financial market. The most important issues were developing of pension funds, financial crisis in Rijecka banka, taking over of Zagrebacka banka by UniCredito of Italy and implementation of Euro.

The Law on Privatization Investment Funds regulates the programme of free distribution of shares to Homeland War victims. According to this Law, seven privatization investment funds (PIFs) have been established so far in Croatia. In the period of five years from registration into the court register these funds have to be convert to close-end investment funds. They have very important role on the capital market, especially in developing domestic bonds market.

The crisis in Rijecka banka started at March 2002 and it was reaction on unethical and irresponsible management. However, the Croatian government and the Croatian National Bank solved this banking crisis in a short time period. This could be also a good sign that Croatian banking system became stronger than it was few years before.

The best example of a crisis that prevails on the Croatian capital market is surely connected with the banking scandal. Namely, in the new state banks became companies with the weakest business activity. Although they were the first to be privatized, this administrative procedure was far removed from the independence of banks from the influence of the state. A bank was considered to be private if most of companies that invested their capital in the bank were private too, i.e. if their deposits in the bank's capital exceeded 50 percent. Since the companies were also privatized only in administrative terms, without actual payment for their value, the circle was closed: companies which invest their capital in banks are at the same time their biggest debtors and individuals which could have taken over the companies as new owners got loans from banks, but did not pay them off. At the same time, private banks emerged with capital gained from savers by promising them unrealistically high interest rates (most often up to 30 percent annually). Soon enough, such banks found themselves in a difficult situation because the companies, which borrowed money from them, at interest rates higher than 30 percent annually were not able to service their debts. It is not difficult to guess that the ones who were left without their money were actually the citizens who hoped that high interest rates on their saving deposits will help them make ends meet. In such a situation banks were no longer able to fulfill their main role, which is the financial servicing of economic subjects and providing support for their development. In order to secure an economic recovery whatsoever, the state began reconstructing some banks at the expense of taxpayers whose money was primarily used to save those banks from which politically influential individuals first extorted money used for their enormous enrichment, and to finance political activities of the ruling party.

Another example of warming up the banking crisis was one of private banks established a couple of years ago, in which mostly Croats from abroad deposited their savings. The newly formed state used its diplomatic missions in some developed countries in the whole world in order to encourage their citizens of Croatian origin, to invest their capital in a Croatian bank. National enthusiasm and the sense of belonging to their roots had naturally had an impact, and many people invested their savings in a Croatian bank, trusting that this was a way of directly supporting the economy of a young state. Unfortunately, influential individuals managed to use even this capital for their personal benefit or for political support of their patrons and not for economic development. This bank was soon entirely ruined together with a great number of its clients. Still, some companies that extorted their capital out of this bank, not repaying it afterwards were spared in the whole scandal.

It stands to reason that the banking crisis, regardless of unconvincing statements of some state institutions that it was under control, was not without impact on domestic and foreign investors. They recognized the danger threatening to their investments so that they decided to invest in securities as far as possible from the reach of Croatian state and parastate institutions.

3.2. Production and service industry

The direct involvement of state departments in economy has recently been reflected in the case of the crisis of the only national newspaper and cigarette distributor, which owns shops and kiosks in places all over the country and at all important traffic points, which basically makes it a monopolist company. The new owner, one of the privileged tycoons whose empire includes about a hundred of different companies completely impoverished one of the most successful companies in such a way that he extorted the daily turnover in the amount of US$ 1 - 2 million for some other purposes and he did not pay neither newspaper companies nor tobacco factories for months. And while the cigarette distributors managed to cope by selling in other shops, newspaper companies were left with no income, and were also under pressure of their debts toward printing companies owned by the state. Thus, the entire newspaper industry of a small country became a victim of the malversations of its distributor. There is no need to emphasize that these circumstances opened the way to state influence on the newspaper and information business. Nevertheless, under the pressure of international public the state decided to reconstruct the distribution company, in such a way that some ministers used their influence with domestic banks to persuade them to assume the distributor's obligations toward publishers. It is difficult to explain how can private banks in a free economy be forced by political measures to make up for the losses of another private company, i.e. the newspaper distributor. While the distributor was a successful company a couple of years ago, in the course of privatization process the state practically gave the company away to its preferees, so that nobody else could get hold of its shares. The takeover was conducted without involving a stock exchange and without public control, and when the company due to bad management almost went bankrupt, the state intervened again as if the company were its own and not in private hands. There is no need to emphasize that this intervention is financed by the taxpayers' money as well.

One of the recent problems is surely the case of a previously successful meat factory, which was one of the biggest in the country. This case also shows how great is the power of some individuals in Croatia, not only in gaining personal wealth and prominent political and economic positions, but also in completely bypassing of all institutions on the capital market. Information accessible to the public show how in this case the ability to pay cedes to political power, meaning that the factory is not bought by the one who has the money, but by one who has the influence on the administrative decision making including: offer for sale by tender, canceling of tender, money deposit, appointing members of supervisory and executive boards. Regardless of the fact that all necessary mechanisms (legal and technical) of regular share trading have been established on two stock exchanges in Croatia, the state institutions usually bypass these institutions. The direct selling of shares from the portfolios of some ministries of state funds through the alleged public tenders creates possibilities for different manipulations. By selling the shares of a great number of only formally privatized companies the state, still acting as an owner of shares, tries to gain money for rents or for reconstructing of certain banks and companies, whose future it determined on its own. In a hectic search for cash, which is to cover the budget deficit, the shares from the state portfolio are never listed on a stock exchange. The shares are simply sold by direct settlement in the so-called public tender. The public tender mechanism should allegedly secure an equal participation of all interested in the purchase of a certain block of shares, but instead of this, the public is in the dark as to two most important pieces of information: the real economic condition of an issuer and the price of the entire transaction. Thus, in the case of the meat factory one buyer deposited money for the purchase of company in the authorized bank, but in an orchestrated tender the company still fell to the share of another buyer, former minister of agriculture, who removed the supervisory board from the office and became the leading person of the company without actually transferring the payment to the account of the seller. Such transactions affect the reputation of the state as well as the security of investing into shares, even when successful companies are concerned. Subsequent announcement of the tender results is completely irrelevant because no foreign investor thinks about transactions post festum, and the possible concealment of the truth about the real circumstances of the company is again only in the interest of those who brought it to the collapse.

The government role in supporting capital market development consists of new legal framework which makes obligations for so called public companies to start official listing. Public companies are large entities with more than one hundred shareholders which are not permitted to act as private companies, i.e. they must include their shares in SE quotation.

3.3.  Privatization process

The legal framework for privatization in Croatia has been set up in 1991. It was changed later on, but its essence did not change significantly[15].

The so-called coupon privatization or voucher privatization resulted in forming privatization investment funds (PIF) which with huge costs collected coupons from people who suffered the consequences of the war. The state gave away the vouchers to those people in order to compensate for their suffering and afterwards they independently of through funds took the shares of the companies ceded to them by the Privatization fund in the course of an auction. A huge number of shares belonged to companies whose value is almost equal to zero or to such companies whose shares have ten percent of nominal value at most. Since shares with no value entered the funds' portfolio, the value of their newly issued shares was also very low. It is therefore no wonder that the first turnover of privatization investment funds on the Varazdin over the counter market showed two things: firstly, there was almost no interest for the buying of shares of privatization funds that owned large amounts of shares of less valuable Croatian companies and secondly, the price of PIF's shares does not exceed the limit of 20 percent of their accounting price. However, after five years what is formal time for fulfill the agreement, they started convert it self from PIFs to close-end investment funds. In the time of converting the price of theirs shares started to grow very rapidly and they have became the most wonted shares in domestic stock exchange. Because of shares of PIFs, Varazdin SE have became stronger competition to ZSE.

In the meantime, there are attempts to take over what is left of the value of some companies without participation of institutions that act through the capital market. Some PIFs, take on considerable equity holdings in some companies and place their own people in the supervisory boards, instead of former members who represented the state privatization fund or pension funds in the supervisory board. It would be completely all right because private funds took the place of state funds and it can be said that a great part of formerly nationalized assets has nevertheless been privatized in this process. In addition, representatives of state funds showed that the state is a bad manager, because numerous companies dominated by public ownership conducted their businesses very badly so that new owners have to take on their recovery.

Unfortunately, neither PIFs nor  former state funds do not invest any efforts to secure the recovery of the companies whose shares they own in their portfolio (by which they could achieve value increase of their portfolio and thus better market price of their shares, and in the interest of all those who entrusted them with their vouchers). For them it is important to extort whatever they can from the newly conquered company and they have an excellent receipt for that: through the decision of the supervisory board they appoint an external consultant who gives useful advice to the management, and who is bound by contract for six months with the possibility of prolonging it to three years. It is an entirely harmless relation, at least when the contract provisions as to the payment of these consultant services are not concerned: namely, the ingenious consultant gets 30 percent of the profit calculated prior to taxation, in such a way that neither depreciation nor financing costs are included in the expenditures. In this way a huge amount of money is being legally extorted from the company, which until the end of the accounting period only increases the loss and which is not even perceptible to careless observers and shareholders at the assembly. This is surely another way to remove potential investors from Croatian capital market.

Last year lots of Croatian financial institutions and some companies passed the process of privatization. Croatian largest insurance company “Croatia osiguranje” sold 51 percent of theirs shares, UniCredito of Italy have bought the shares of Zagrebacka banka, the biggest national bank. At this moment Croatian government tries to influence on privatization of the biggest oil company INA, but also they are discussing about enrolling the third operator in mobile phone company on the domestic market.

4. Conclusion

All legal and other institutional prerequisites for capital market functioning are fulfilled in Croatia. There are even two stock exchanges, Croatian Securities and Exchange Commission is active, Central Depositary Agency and approximately fifty authorized brokerage houses are ready for offering their services. The financing of company development through primary issue (Initial Public Offering) is unknown to Croatian companies and it has to past the time to develop it self. The state did not enough stimulate the capital market development because it sold all companies which had their shares in the portfolio of state funds through the so called public tenders or direct settlements so that only selected individuals could buy attractive companies, at privileged conditions at that. Domestic institutional investors are still not established enough and pension fund reform, which should result in activating investment pension funds, is yet to be realized with the support of the World Bank.

Internal problems and some scandals in banking system ruined the reputation of domestic financial market in the eyes of foreign investors. The rest of the responsibility for the failure in animating international investors is still in the sphere of bad internal economic policy and inability of Croatia to comply with economic and political standards of developed countries.

References:

1.Aggarwal R., Inclan C. and Leal R. (1998), Volatility in Emerging Stock Markets, Proceedings for the Conference: Alternative Structures for Securities Markets, Capital Markets Research Center, Georgetown University, School of Business, Washington, D.C., September 10-11

2. Cingula, M. (1999): Capital Market as a Stimulating Factor of Croatian Integration into the European Union, II. International Conference: Economic System of the EU and Adjustment of the Republic of Croatia, Rijeka, April 21-23 

3. Šonje, V. (1996), Capital markets development in Croatia, December 1996., Available from: http://www.hnb. hr/publikac/ pregledi / cmdic/cmdic1.htm#Executive 

4. *** (1999), Economic Barometer (Erste Bank), Central European Economic Review, Vol VII, Number 5

5. *** (1998), Market Watch, Central European Economic Review, Vol.VI, No 10

6. *** (1999), Market Watch, Central European Economic Review, Vol.VII, No  6 

7. *** (2001), Hypo-Alpe-Adria-Bank, Outlook 2001., Croatian Capital Market Research, Available from: www.hypo-alpe-adria.com

8. *** (2003), Pliva d.d., Company description, Available from: http://www.zse. hr/ listed1 /plva-r-a.html

9. *** (2003), Podravka d.d., Company description, Available from: http://www. zse.hr /listed1 /podr-r-a.html

10. *** (2003), Hrvatska među brže rastućim zemljama i u 2004., Poslovni tjednik, No.51, Zagreb

11. *** (2003), Ekonomski monitor, No. 11, January, 2003.