FIRST KUNA BONDS INTRODUCED INTO ZAGREB STOCK EXCHANGE

ZAGREB, May 28 (Hina) - Croatian Finance Minister Mato Crkvenac and Zagreb Stock Exchange director Marinko Papuga on Wednesday signed a contract on introducing the first kuna government bonds into the market's First Quotation. #L# Trading in these bonds will start tomorrow. These are government bonds worth a billion kuna, intended for domestic institutional investors as well as citizens. They have a fixed annual interest rate of 6.125 percent and the sponsors and chief arrangers of the issue are Rijecka and Splitska banks. Croatia's economy is stable, solvent and continually growing, and this was a favourable situation for issuing the bonds, Crkvenac said. Last year's economic growth rate of 5.2 percent was among the highest in the world, Crkvenac said, adding that the inflation rate in the first four months was only 1.5 percent. Although the rate of inflation for this year was estimated at 3.5%, the minister said it would be lower, around 2.5 percent. Crkvenac stressed that the first issue of kuna bonds was important because it represented a benchmark for other issues and secured long-term revenues. This year's economic results are better than expected, which makes it possible to secure the state's liquidity and solvency this and next year, said the minister. (hina) lml