Slovenian Stocks Slump as Political Crisis Extends
Slovenia’s benchmark stock index posted the second-biggest drop worldwide on concern the country’s political crisis will delay state-asset sales.
The SBITOP index of the seven most-traded stocks dropped 2.2 percent to close at 645.01 in Ljubljana, the steepest daily drop worldwide after Malaysia’s benchmark stock index. Energy company Petrol Group d.d. and former state monopoly Telekom Slovenije d.d. led the declines.
Slovenia was thrown into political turmoil in the second week of January when the anti-corruption agency accused Prime Minister Janez Jansa of failing to declare his private assets, prompting his coalition partners to demand his resignation and increasing the risk of an early election. Jansa’s ruling group, the Slovenian Democratic Party, on Jan. 18 accused the coalition partners of undermining the government at a critical time for the country.
“Buyers have withdrawn from the Ljubljana bourse, which isn’t surprising since politics has such an important role and decisions are being delayed,” Ani Klemencic, president of the management board of brokerage Gorenjska Borznoposredniska Druzba, said in an e-mail. “It seems it’s more important who will oversee the 11 billion euros ($14.6 billion) of state assets and gain from its sale, which is worrying and sad.”
Slovenia’s political crisis and possible early elections may push back the overhaul of the economy, including a bank recapitalization plan, Moody’s Investors Service said in a Jan. 17 report adding such an outcome would “result in a disruptive political transition.”
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