SEE stock exchanges gain momentum in 2012, as regional hubs stand out

by Gabriela Tzekova

The stock markets in SEE closed 2012 on a positive note as the majority of the TOP 100 public companies saw their market value increase and the blue-chip indices reversed their downward trend. Despite the upturn, the indices failed to erase the losses accumulated in 2011. Meanwhile, the overall growth in the combined capitalisation in SEE was mostly prompted by the good performance of the three leading stock markets in the region: Zagreb, Bucharest and Ljubljana.

SEE stock exchanges market capitalisation


Romanian and Croatian companies asserted their dominance at the lead of SEE publicly traded companies, the 2012 ranking by market cap showed. Slovenia, Macedonia and Serbia each had a representative in the top 10 of market value heavyweights, making the list more mixed. A year earlier only one Slovenian and one Bulgarian company made it to the big league.

Last year was particularly strong for oil and gas firms on the bourse. Romania’s OMV Petrom topped the ranking with market capitalisation of 5.48 billion euro. The oil and gas group earned two spots, after closing 2011 with 3.8 billion euro. Investors were reassured by its improving financial results. “After a recent period of volatile crude prices and macroeconomic uncertainty, 2012 was a year of relative stability, with strong operational and financial performance for Petrom,” CEO Mariana Gheorghe commented on the annual figures.

Due to a change in the methodology of the ranking, the 2011 leader, Vienna-based Erste Group Bank, listed in Bucharest, dropped out of the 2012 snapshot.

INA-Industrija Nafte, the Croatian refiner controlled by Hungary’s MOL, cemented its runner-up position with a market value of 5.2 billion euro, up 3.0% on the year. While its bourse positions remained strong, INA’s financial results suffered as the company halted its gas and oil business in Syria to comply with EU policy on the politically unstable Middle Eastern country.

Blue-chip indices of major SEE bourses in 2012


Blue-chip indices in some SEE countries


Croatia’s Hrvatski Telekom climbed one spot to number three last year although it saw its market capitalisation fall to 2.14 billion euro from 2.63 billion euro. HT faced multiple challenges, including prolonged recessionary environment, tougher regulatory pressure ahead of Croatia’s accession to the EU and increasingly aggressive competition, Erste said in a note to investors.

Slovenian drugs company Krka ranked fourth with market capitalisation of 1.77 billion euro, down from 1.87 billion euro in 2011, when it was fifth. Brokers identified the stock as an attractive opportunity for investors despite cost-trimming measures in the healthcare sector in Central and Eastern Europe (CEE) which continued to take a toll on Krka’s results. Erste added Krka to its top 10 picks in CEE and Turkey for the fourth quarter of 2012, pointing out that the stock has lost its premium and is now trading at a discount.

Financial groups also had a major presence on the list of the 10 largest SEE companies. Romanian investment fund Fondul Proprietatea was fifth with market capitalisation of 1.71 billion euro, up 25.5% on the year. Banks as a whole lost some of their market value last year. Croatia’s Zagrebacka Banka ranked sixth with 1.595 billion euro, down from 1.726 billion euro. Another Croatian lender, Privredna Banka Zagreb, bucked the trend of its peers with its market value of 1.289 billion euro, which put it in the seventh place, up from 1.2 billion euro. Romania’s BRD, a unit of France’s Societe Generale, came eighth as its market cap slid 26% to 1.276 billion euro.


The newcomers to the SEE top 10 were Serbian oil group Naftna Industrije, whose market capitalisation grew to 1.06 billion euro, from 945.6 million euro, and Makedonski Telekom, whose value stood flat on the year at 810.3 million euro.

The top public companies of the other SEE countries were also either banks or telecoms. Montenegro’s Crnogorska Komercijalna Banka ranked eleventh as its market value grew to 734.5 million euro from 688.1 million euro. Bosnia and Herzegovina’s BH Telecom saw its market cap rise to 607.1 million euro from 592.9 million euro, which put it in the 13th place.

The largest Bulgarian company by market value ranked only 19th. Bulgarian Telecommunication Company’s market value tumbled to 391.3 million euro from 649.6 million euro. In 2011, Bulgaria had a surprising participant in the top 10 list – energy specialist Energoni, whose market value slumped by 93.30% at end-2012, which put it in the 97th spot.

The Croatian stock exchange asserted its leadership in the region with 25.39 billion euro in combined market capitalisaiton of the listed firms at end-2012, versus the yearearlier 24.53 billion euro. Overtaking the bourse in Ljubljana, the Bucharest Stock Exchange closed 2012 with combined market value of 22.06 billion euro, up from 16.39 billion euro.

Unlike the other top bourses in the region, the Ljubljana Stock Exchange saw a decline in the combined market cap of its public companies to 17.66 billion euro, from 19.35 billion euro.

The good performance of the three top markets in the region widened the gap between the leaders and the smaller SEE bourses. Although the overall combined value of all SEE markets grew to 86.16 billion euro, from the year-earlier 83.47 billion, the combined value of smaller bourses slid to 21.04 billion euro from 23.2 billion euro.

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