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FIMA Daily I n s i g h t

IN FOCUS - STOCK EXCHANGE October 24, 2011 Croatian equities continued to struggle today, as investors wait for a w resolution on European debt. CROBEX lost 0.09% to 1,800.98 pts and blue chip CROBEX 10 declined 0.33% to 989.11 pts. Regular stock turnover amounted to HRK 6.3 million. Food producer Belje (BLJERA CZ) topped the liquidity board collecting HRK 1.6 million in turnover while price surged 6.76% to HRK 103.50. Three weeks ago Croatian Financial Services Supervisory agency (HANFA) came out with order to concern to announce takeover bid for theirs listed subsidiary food producer Belje. Integrated telecom HT (HTRA CZ) followed with HRK 1 million in turnover while price decreased 0.2% to HRK 247.5. Construction sector stocks posted mixed performances. While engineering Ingra (INGRRA CZ) slipped 1.2% to HRK 8.20 and heavy constructor (VDKTRA CZ) slumped 0.91% to HRK 110.0 while power trunk and montage (DLKVRA CZ) was in green rising

1.03%. -6,0% -4,0% -2,0% 0,0% 2,0% 4,0% 6,0% 8,0%

BLJE-R-A KNZM-R-A Schedule of publication of 3Q2011 results: -R-A PTKM-R-A 27.10.2011 (ERNTRA CZ) ADPL-R-A ZABA-R-A 27.10.2011 (ATGRRA CZ) ERNT-R-A DLKV-R-A 27.10.2011 Končar (KOEIRA CZ) ATPL-R-A ISTT-R-A 28.10.2011 (HTRA CZ) LKPC-R-A KOEI-R-A 28.10.2011 (PTKMRA CZ) HT-R-A DDJH-R-A 28.10.2011 (PODRRA CZ) IGH-R-A ULPL-R-A 31.10.2011 AD Plastik (ADPLRA CZ) PODR-R-A KRAS-R-A THNK-R-A INGR-R-A ADRS-P-A RIVP-R-A ATGR-R-A KORF-R-A LKRI-R-A * data is calculated using last traded price Source: www.zse.hr

CROBEX 3 MONTH MOVEMENT

Source: www.zse.hr

2.400 70

2.300 60

2.200 50

2.100 40

2.000 Daily news headlines (more available on www.fima-securities.com): pts 30

1.900 Markets steady ahead of euro plan HRK Millions 20 1.800 Oracle to buy RightNow for around $1.5 billion

1.700 10 Exclusive: EU weighs insurance, SPV options to boost euro fund 1.600 0 Ryanair boss outlines growth plan Turnover CROBEX Pick-up in Chinese manufacturing

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FIMA Daily I n s i g h t

IN FOCUS -

SDP would call IMF, HDZ wouldn’t Asked about possible arrangement with the IMF next year, at the TV debate on Nova TV, finance minister Martina Dalic said did not need the IMF – neither as an alibi, nor as an excuse for making decisions. On the other hand, Slavko Linic (SDP), representing the opposition coalition, believes that in 2012 it will probably be necessary to negotiate and use IMF’s funds. He explains that IMF offers a much lower interest rate than will be available for Croatia at an open . Linic argues that the government should be guided by an economic interest and not fear the IMF. Dalic replied that these funds were not sources of budget financing, but are intended for strengthening reserves held by the Central Bank. Linic however argues that IMF’s programs have changed. Since huge deficits are the main problems of many countries today, IMF’s funds are being used for settling budget issues as well, he claims. (Source: www.limun.hr original text was published on www.banka.hr)

Economists: Insolvency can be solved only with bankruptcies and swift judiciary

Croatia’s economy is struggling with almost HRK 40bn in outstanding liabilities. While these are mostly old debts, it also includes HRK 14bn in unpaid taxes and contributions, which would be sufficient to settle the annual budget deficit. Matko Bolanca of the Croatian Employers Association (HUP) believes that as much as HRK 33bn should be written off. HUP is aware that fictitious uncollectable debts by non-existing companies make for the largest part of insolvency. Therefore, it suggests deleting 13,555 such companies, together with their liabilities worth HRK 8.6bn. HUP suggests carrying out swift bankruptcy over another 12,400 companies to write off HRK 10bn. A law on payment deadlines should prevent further piling up of outstanding liabilities. It would get close to the EU regulations and payments within 30 days, with an exception for the health sector and extraordinary situations (60 days). (Source: www.limun.hr original text was published in Vjesnik)

9,0 Croatia has too high combines tax rates

8,0 Croatia has much higher combined rates of income tax and social payments than 7,0 new EU member states, KPMG’s research on 96 countries shows. In the category 6,0 of gross income of USD 100,000, Croatia has the third highest combined rate, at

5,0 45.2 percent. For example, Romania has 24.9 percent, Bulgaria 12.4 percent,

4,0 32.1 percent, 29.7 percent. In many old EU member

3,0 states, the highest income tax rate is much higher than in Croatia – in UK it is 50 percent, in Denmark 55.4 percent. However, Croatia’s lowest rate of 40 percent is applied from a low starting point – from taxable income that exceeds USD HRK/EUR HRK/USD Source: www.hnb.hr 24,795. (Source: www.limun.hr original text was published in Poslovni dnevnik)

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FIMA Daily I n s i g h t

IN FOCUS - ZAGREB STOCK EXCHANGE

CROATIAN EQUITIES (FUNDAMENTAL MULTIPLES)

“ - “ stands for negative value of multiple

* multiples for Adris Group calculated on diluted basis

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FIMA Daily I n s i g h t

IN FOCUS - ZAGREB STOCK EXCHANGE

CONTACTS FOR INSTITUTIONAL IN VESTORS:

KREŠIMIR ČULO [email protected] +385 1 63 98 357

IRENA FIŠTREK [email protected] +385 42 660 964

GORDAN TOMLJENOVIĆ [email protected] +385 1 63 98 352

TRADING DEPARTMENT: [email protected] Phone : +385 42 66 09 60

RESEARCH DEPARTMENT:

NIKOLA BAKŠAJ [email protected] +385 42 66 09 74

STIVEN TOŠ [email protected] +385 42 66 09 75

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FIMA Daily I n s i g h t

IN FOCUS - ZAGREB STOCK EXCHANGE

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