ECONOMY

Stock purchasing frenzy in Croatia

ZAGREB (Reuters) – A frenzy gripped Croatia yesterday as thousands of ordinary people, brokers, banks and the local exchange geared up for the sale of national telecom operator T-HT, in the country’s largest initial public offering. The government was scheduled to list 32.5 percent of T-HT, which is majority-owned by Deutsche Telekom, on the bourse in Zagreb and London at 0800 GMT today. It set the price at 265 kuna per share, which values the whole company at 21.5 billion kuna ($4.15 billion). The IPO has generated unprecedented interest. More than 358,000 Croats subscribed for 37.5 billion kuna worth of shares, more than five times the 7 billion kuna on offer. The oversubscription forced the government to halve the maximum number of shares allowed per person. Media reports said the expected rush to buy shares in T-TH – which analysts said had sizable room for growth – could create bottlenecks and bring the entire stock market trading system down. «It is difficult not to expect system crashes. This is a record high transaction on the local market and the congestions are almost certain through next week, maybe even longer,» said Hypo-Alpe-Adria bank analyst Hrvoje Stojic. Systems at the central depository agency SDA, where people had to register, briefly collapsed yesterday. «I have to say we were blocked in the morning, it seems every Croat wanted to be the first to register. I hope the system will be able to handle the rush,» SDA head Vesna Zivkovic told state radio yesterday. The Zagreb Stock Exchange said it had doubled its capacity, introduced new lines and communication channels and set up teams to deal with any emergencies today. «We have done everything we could, from the technical and organizational aspect. However, there are no 100 percent guarantees. Stock exchanges around the world have been known to crash,» said spokesman Zeljko Kardum. Of the total 32.5 percent on sale, the government has allocated 25 percent to Croatian citizens. Of the remaining 7.5 percent, roughly one-third has gone to local and two-thirds to foreign institutional investors. Hypo’s Stojic said he expected lively trading on the opening. «There should be enough clients on the sell and buy side and prices should jump in the first few days.» T-HT is the dominant fixed-line operator and Internet provider in the country and competes on the mobile market with two other foreign-owned operators.