Zagreb Stock Exchange: Successful ETF market rollout (upgraded to HOLD)
The stock is down almost 13% since we initiated with a Sell in October last year. In view of this correction and a slight increase in our revenue forecasts, we have decided to upgrade Zagreb Stock Exchange (ZSE) to HOLD, from Sell, and we have increased our price target (PT) by 5.6% to HRK 15.1/share. We have increased our forecasts mostly on the back of the successful implementation and rollout of the ETF market, which seems quite popular among both retail and institutional investors. At this stage, however, when the company is not paying out a dividend, the liquidity of the shares remains low and the shares are trading at a discount of c.17-27% vs. ZSE’s peers on our 2021E-22E EV/EBITDAs, our HOLD recommendation is reasonable, we believe. As we have argued previously, an acquisition could trigger a change in our view.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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