Today, we decided to present you with a brief overview of CROBEX constituents’ free float as the H1 publishing season is over.

In our analysis we considered free float to equal all individual shareholdings lower than 5%, while pension funds and UCITS funds were considered as free float regardless of their shareholding percentage.

Just more than half of CROBEX constituents have free float higher than 50% indicating that 50%+ of CROBEX constituents are still held by a small group of majority shareholders. Of the constituents, only Adris (pref.) has a free float of over 90%.

On the other hand, ZABA and Kutjevo have less than 10% of free float. ZABA has a free float of 3.8% and is almost completely owned by Unicredit with 96.2% ownership. ZABA is followed by Kutjevo, Brodogradilište Viktor Lenac, and Jadroplov with a free float of 6.7%, 18%, and 29.6%, respectively.

We note that the only significant change during this quarter occurred in Podravka’s shareholder structure, where Braća Pivac acquired >5% of the total shares outstanding, partially lowering Podravka’s free float on ZSE.

The prime market is the most demanding market on the Zagreb Stock Exchange regarding the requirements set before the issuer. It is worth noting that it requires the issuer to have a free float of at least 35%. If we were to compare CROBEX to that parameter, a few of the constituents would not meet the criteria (ZABA, Kutjevo, Brodogradilište Viktor Lenac, and Jadroplov).

If we were to calculate the free float of CROBEX constituents while excluding pension funds, the results would be slightly different for some, but significantly different for the majority of companies. Namely, Croatian pension funds held EUR 2.52bn of the current total market capitalization of ZSE. This amounts to 11.9% of the current market cap of ZSE equity which amounts to EUR 21.26bn.

Yesterday, One United Properties announced the initiation of a Share Buyback Program, with a maximum of 10m shares to be bought, at a price between RON 0.2 and RON 1.75 per share.

Following the approval of the Board of Directors (BoD) last week, One United Properties initiated its share buyback program yesterday. The program will aim to buy back a maximum of 10m shares, at a price between RON 0.2 and RON 1.75 per share. The maximum daily volume is 25% of the average daily quantity of shares that are traded on the market on which the acquisition is made. The maximum value that can be bought back is set at RON 10m. The intermediary employed for the SBB program is BRK Financial Group.

The program will run for 18 months from the date of the publication of the EGSM decision in the Official Gazette of Romania, part IV. The EGSM decision referred to here is the one from the 26 April 2022 OGSM meeting. The date of the publishing of the decision is 16 May 2022, effectively meaning that the 18-month period is to be calculated from this date. As such, the SBB program will actually last for 2 more months only, as the 18-month period will effectively end on 16 November 2023.

Following this development, an EGSM was also called for last week and approved by the BoD, to be held on 9/10 October 2023. According to the press release related to this, another Share Buyback Program was proposed. Delving into the details, the buyback program will be done at a price range between RON 0.2 and RON 1.50 per share, with an aggregate value of RON 15m. This program will target to buy back 10m shares as well. It will also last for 18 months, from the date of the publishing of the EGSM decision in the Official Gazette of Romania. If approved, this would mean that ONE will have an SBB program that would last for 20 months (2 months remaining for the 1st one, and 18 months for the 2nd one, yet to be approved), with a maximum possible amount of shares that can be bought back at 20m, with a maximum aggregate value of RON 25m. Following this news, ONE’s share price rose by 3.2% yesterday and closed at RON 0.9390 per share.

One United Properties share price change (2021* – 2023 YTD, RON)

Source: Bloomberg, InterCapital Research

*As of the IPO date in July 2021