HToffering

Frantic Trading Follows Listing of Croatian Telecom Shares on Stock Exchange

ZAGREB, Croatia: Shares in Croatia's top telecommunications company — bought in massive numbers by Croatians last week — were listed on the stock exchange Friday, triggering frantic trade and raising the price by about 50 percent.

The government sold a 32.5 percent stake in Hrvatske Telekomunikacije d.d. (T-HT) in a public tender that closed on Monday. The company is controlled by Deutsche Telecom, which acquired 51 percent of it in 2001.

It was only the second time that one of the country's most profitable companies was being sold in a public tender. About 350,000 Croatians — a record number — rushed to buy shares as analysts predicted swift and certain profits.

The government reserved 25 percent of the shares for Croatians and 7.5 percent for institutional investors.

It set the price per share at 265 kuna (euro36; US$51) — significantly lower than the real value — acknowledging that it did so to enable people to make a profit.

As soon as the shares were listed at the Zagreb stock exchange at 10 a.m. (0800 GMT), the price per share reached 402 kuna (€55; US$76). It hovered around that mark all morning.

In the first hour, the trade reached 109 million kuna (€15 million; US$21 million), the bourse said.

The shares were simultaneously listed at the London stock exchange.

Prime Minister Ivo Sanader said he hoped Croatians would "make good profits and continue to do so."

Since it was the first time individual Croatians participated on a mass scale in the purchase of a company, analysts dubbed it the "awakening of popular capitalism."

Interest was so great that the government halved the maximum purchase allowed per person to allow more people to buy shares.

The government expects to make about 7 billion kuna (euro959 million; US$1.36 billion) from the sale. It is expected to spend most of that making up pension payments that were frozen by a cash-strapped government 14 years ago.

The sale also could help Sanader's Croatian Democratic Union before parliamentary elections in November. Paying off the debt to pensioners would please about a third of eligible voters. And Sanader may be hoping that voters who a profit from their T-HT shares will show their appreciation at the ballot box.