Development Of The Corporate Bond Market In Croatia
| Located in the Mediterranean region in South-Central Europe, Croatia is a beautiful European nation situated along the Adriatic Sea. Unlike its neighboring countries, Republic of Croatia is a cosmopolitan country with around 4.5 million inhabitants. |
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It is a small nation that does not have a large supply of low-priced labor or a huge domestic market. In spite of these hurdles, Croatia has the most advanced and stable functioning market economy in the South-Eastern Europe with a GDP of US $66.7 billion. According to the European Union reports, Republic of Croatia is slowly but steadily pushing itself onto the world investment map.
Depending on the ratio of private sector loans and GDP, the World Bank classified Croatia under the group of “higher middle-income countries” during the year 2003. However, in terms of ratio of stock market transactions and GDP, Croatia still remains in the group of least developed countries. This is because investors in Croatia are least interested in stocks and shares. It is mostly the bond market where a major portion of investment goes in. Bonds issued by the Government are the major securities dominating Croatian bond market. The other major bond issuers in the Croatian bond market are the banks and lastly the corporate sector. Among the corporate, the most prominent bond issuers are those that belong to the paper and tourism sectors. While the government bond issue size is from 105-500 millions of Euros, the corporate bond issues are much smaller, equaling 12-17 millions of Euros.
All these figures indicate that there is further need of corporations to participate in the market and support the growth of the country. Corporate bonds are expected to have a great future in the Croatian market. Although, a range of factors contribute to the speed at which a country's corporate bond market develops, it is clear that, in the case of Croatia, there needs to be a better financial education among youngsters about the institutional and legal frameworks already in existence.
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Development Of The Corporate Bond Market In Croatia