Block transactions represent an important way of trading in less liquid markets as they are used to lessen the impact that a large transaction has on the price of certain security. For this reason, we decided to present you with an overview of how much value is traded through equity block transactions as opposed to regular market transactions on the Croatian market.
A block trade represents a transaction between two parties that involves the sale or purchase of a large number of securities. Such a transaction involves a significantly larger number of equities or bonds being traded at an arranged price between two parties, sometimes outside of the open markets. Currently, the minimum amount for a block transaction on the Zagreb Stock Exchange is HRK 2m. Such transactions represent an important way of trading in less liquid markets as they are used to lessen the impact that a large transaction has on the price of certain security. For this reason, we decided to present you with an overview of how much value is traded through equity block transactions as opposed to regular market transactions on the Croatian market.
Equity Turnover Breakdown (HRK m)
Looking at the charts one can notice that the share of block transactions in the total equity turnover has been gradually increasing over the years as the liquidity of the market has decreased with 2016 being the year when block transactions had the highest share. Meanwhile 2018, thus far, records the second-highest share of block transactions. In 2021, the share of block transactions in total equity turnover increased slightly to 21%. In Q1 2022, the Croatian Stock Exchange already achieved 67% of last year’s block transactions and 40% of the total 2021 equity turnover. If block transactions in 2022 would continue at this pace, it would surpass previous years and they may achieve the levels of 2016 block transactions. In the case of multiplying the result of Q1 2022 by the number of quarters in a year, we can expect block transactions to reach levels around HRK 1.4bn.
Block Transaction as % Of Total Turnover
