engleski

FINANCIAL MARKET AND FUNDAMENTAL DATA – THE CASE OF CROATIA

Abstract. Stock price movement is in the focus of numerous scientific papers. Most of these researches were performed for Asia and US stock markets while very few researches deal with European emerging markets. In this paper we perform fundamental analysis in order to access connection of financial ratios with stock price and stock returns on Croatian stock market. We observe ten stocks from CROBEX 10 index from Zagreb Stock Exchange (ZSE) in four year period (2014 – 2017). CROBEX 10 is index of ZSE composed from top 10 CROBEX index constituents by Free Float Market Capitalization and Turnover. In selected period we observe five financial ratios: Debt to Equity Ratio (DER), Return on Assets (ROA), Current Ratio (CR), Price Earnings Ratio (PER), and Total Assets Turnover (TATO). We apply panel data regression analysis in order to investigate connection between selected financial ratios and stock prices and stock returns. Main characteristics of Croatian stock market are small number of quality stocks to be traded with and infrequent trading. According to these market characteristics two dependent variables were observed, stock price and stock return. Due to lack of substantial literature for observed market, proposed research design is based on the most frequently used financial ratios.

stock price, stock returns, financial ratios, emerging markets, illiquidity

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