What is the Progress Market?
The Progress Market is a dedicated segment of the Zagreb Stock Exchange (ZSE) created to support small and mediumsized enterprises (SMEs) that exhibit strong growth potential. Launched in 1999, it operates under a set of lighter regulatory requirements compared with the main market, while still ensuring transparency and investor protection.
Its primary objective is to provide a bridge between privatelyheld entrepreneurs and the public capital markets, enabling companies to raise equity, improve corporate governance, and increase their visibility both domestically and internationally.
History & Evolution
The idea of a separate growthoriented platform emerged in the late 1990s when the ZSE recognised that many promising Croatian firms struggled to meet the stricter criteria of the main market. The Progress Market was officially introduced in November 1999 with an initial list of 12 companies.
Key milestones:
- 20012005: Rapid expansion; the number of listed firms doubled.
- 2008: Introduction of a digital trading system that reduced settlement times.
- 2013: Alignment with EU MiFID II standards, improving market integrity.
- 2018: Launch of the Progress Market Green Bond pilot, encouraging sustainable financing.
- 2022: Integration of an online investor portal offering realtime data and analytics.
Today the Progress Market hosts more than 60 listed entities, spanning sectors such as information technology, renewable energy, biotechnology, and niche manufacturing.
Listing Requirements
While the requirements are less demanding than those for the main market, they are designed to safeguard investors and ensure a minimum level of corporate maturity.
| Criterion | Requirement |
|---|---|
| Legal form | Jointstock company (d.d.) or limited liability company (d.o.o.) that has undergone a conversion to a jointstock structure. |
| Operating history | Minimum of 2 consecutive financial years with audited statements. |
| Equity capital | At least HRK 5 million ( 660k) of paidin capital. |
| Free float | Minimum of 15% of shares must be publicly available. |
| Financial performance | No specific profitability threshold, but a positive net equity is required. |
| Corporate governance | Adoption of a code of conduct aligned with ZSE Corporate Governance Guidelines. |
| Disclosure | Quarterly financial reports, material event announcements, and a prospectus approved by the Financial Services Agency (FSA). |
Companies may also benefit from a fasttrack admission route if they have already been listed on a recognized EU regulated market.
Trading Mechanics & Liquidity
Trading on the Progress Market occurs through the same electronic platform as the ZSEs main market the ZSE Trading System (ZTS). Orders are matched on a continuous doubleauction basis during regular trading hours (09:0016:30 CET).
Key features include:
- Marketmaking: Designated market makers (DMMs) are obliged to provide bid/ask quotes for most listed securities, helping to narrow spreads.
- Liquidity incentives: Reduced transaction fees for trades involving securities with a free float below 20%.
- Settlement: T+2 settlement using the Central Securities Depository (CSD) of Croatia.
- Shortselling: Permitted under the same regulatory framework as the main market, subject to borrowing arrangements.
While average daily turnover on the Progress Market is lower than on the main market, the presence of active DMMs and a growing number of institutional participants has steadily improved liquidity.
Investor Profile & Benefits
The Progress Market attracts a diverse set of investors:
- Domestic retail investors: Many Croatians view the market as a way to support local innovators.
- Regional venture funds: Funds based in Central and Eastern Europe use the platform to gain exposure to earlystage growth companies.
- Foreign institutional investors: Interest has risen after the EU accession, especially in sectors such as renewable energy and biotech.
Investment benefits include:
- Potential for higher capital appreciation compared with more mature bluechip stocks.
- Access to companies that are often undercovered by analysts, offering opportunities for diligent investors.
- Eligibility for certain taxadvantaged investment schemes offered by the Croatian government for SME financing.
Future Outlook
Several trends are expected to shape the Progress Market over the next decade:
- Digital transformation: Adoption of blockchainbased settlement and digital securities could reduce costs and increase transparency.
- Sustainable finance: The market is positioning itself as a hub for green and social bonds, aligning with EU taxonomy requirements.
- Crossborder listings: Companies from neighboring countries are showing interest in a duallisting model, leveraging the markets SMEfriendly environment.
- Enhanced analytics: The 2022 investor portal upgrade introduced AIdriven sentiment analysis, helping traders identify emerging trends.
- Regulatory alignment: Continued harmonisation with EU capital market directives will improve investor confidence and attract more foreign capital.
Overall, the Progress Market is poised to become a catalyst for Croatias economic diversification, providing essential capital to innovative firms while delivering attractive opportunities for investors seeking growth beyond traditional markets.
