Telecoms, gas down, pull Baltic index along

  • 2001-08-23
  • Boriss Epsteins
Last week brought declines in telecommunication companies and in Latvia's gas utility Latvijas Gaze. The euro gained against the dollar, adding to the negative pressure on the Baltic index. The Baltic index of the 15 most liquid and highly capitalized Baltic stocks fell 5.9 percent to 141.14 for the week, even after hitting an all time record high of 155.3 points at midweek. Five of the Baltic List stocks gained and nine lost, with trading in Estonia's Pro Kapital still suspended. Three of the highest priced shares - Eesti Telekom, Latvijas Gaze and Lietuvos Telekomas - all fell, causing the Baltic index capitalization to fall 6.4 percent to 2.64 billion euros ($2.41 billion).

Turnover reached 22.5 million euros, triple the previous week's volume of 7 million euros. Latvian shares controlled 84 percent of trading turnover, with15 percent from Estonian shares and only 1 percent from trade in Lithuanian shares. Baltic List shares dominated action on all the individual Baltic stock markets, making up over 70 percent of the total turnover.


Estonia: EestiTelekom weakness in soft market

The Tallinn Stock Exchange was preoccupied with a weak volume as negative moods prevailed during a gloomy week, with turnover leader Eesti Telekom was off 3.5 percent. The stock index TALSE was down slightly, 0.5 percent, to 130.56. Calculated in euros, the price index of the six Baltic List shares was off 1.3 percent to 124.22. The market's turnover from 563 deals totaled 61.92 million kroons ($3.62 million). "All said, the week was a negative one and Eesti Telekom fell like a stone, but we hope it will stay somewhere at that level now," Hansabank Markets trading chief Mattias Mustonen said. At the weekend it was mostly local investors who were found among the sellers, but more selling may follow from the West as the new week starts, with investors unloading their Telekom shares again, Mustonen predicted.

"Aside from the briskly traded Telekom and Hansapank, turnovers during the outgoing week were not noteworthy," Mustonen said. Eesti Telekom fell 3.5 percent, from 56.75 kroons to 54.75 kroons. A new low of 54.5 kroons was touched August 16. Hansapank posted a gain of 1.9 percent, to 156.25 kroons. Leading analysts have forecasted a drop in Hansapank's second quarter net profit, to between 350 million to 370 million kroons, from its first quarter results of 410 million kroons, hit by the acquisition of Lietuvos Taupomasis Bankas. Hansapank is scheduled to release its second quarter results on August 23.


Latvia: Latvijas Gaze shares hit roof and tumble back

The gas utility Latvijas Gaze saw its upward climb end in a sharp reversal last week. Just as a number of analysts had forecast, the share reached a high of 11.30 lats ($17.94) by midweek before collapsing, taking the Baltic index down with the ship. Over the week the Dow Jones Riga Stock Exchange capitalization index fell by 14.5 percent to 224.24, while the price index RICI was down 0.4 percent to 162.53. Latvia's Baltic List fell 14.9 percent to 236.70.

Thanks to large deals in Latvijas Gaze shares, the stock market's turnover reached 10.75 million lats. Almost 100 percent of the Latvian stock exchange turnover was from deals in Latvijas Gaze shares. Treasury bond trading reached 11.35 million lats.

Latvijas Gaze shares fell 22.7 percent to 8.05 lats, while turnover reached 10.7 million lats. Even though Latvijas Gaze shares fell considerably by the end of the week, August 17 saw a 2 percent block of shares unloaded by Finland's Fortum, at a price of 11.8 lats per share. After selling the stake, Fortum now no longer influences the gas utility. As of this writing, the buyer is still unknown, though there aren't too many candidates to make guessing difficult. It's most likely that the stake was bought by either Itera Latvija or Ventspils Nafta, both having fought over the auction of a 2 percent state-owned stake in Latvijas Gaze only a month ago. The shares may have also been sold to Russia's Gazprom, with whom Fortum has had much cooperation in recent years.

Most experts believe that Latvijas Gaze shares will fall even further next week, as the buyer has most likely reached its goal. Liquidity should fall, along with a continuing drop in price. Analysts warn that interest in the company's shares will remain high until the expected auction of another 3 percent state-owned stake in the company, meaning that it is unlikely in the near future for the price to fall to its July levels of 4.50 lats per share.

Trading on the bourse also focused on shares in the oil terminal Ventspils Nafta and the distillery Latvijas Balzams. Ventspils Nafta shares rose by 19.3 percent to 0.74 lats. Nevertheless, it is still too early to speak of any significant trend, as turnover amounted to only 36,858 lats, while at one point the share price in thin trading jumped 15 percent in a single trading session. Latvijas Balzams' share price increased 5.6 percent to 0.38 lats on a turnover of 4,000 lats. Latvijas Balzams shares increased mainly due to the announcement of regular dividends in the future.


Lithuania: Lithuanian indexes slide as Telekomas hits new low

Lithuania's leading blue chip Lietuvos Telekomas slumped to a record low amid lackluster trading, dragging down the rest of the market. The bourse's benchmark price index Litin-10 edged down 0.9 percent to 989.40, the blue chip official list index Litin eased 4.3 percent to 305.05, and the broad index Litin-G was down 3.8 percent to 779.11. Calculated in euros, the price index of the six Lithuanian Baltic List shares was unchanged at 110.2. Equity turnover reached only 1.44 million litas ($360,000). Treasury securities' trading turnover came to 29.44 million litas.

Lietuvos Telekomas fell 7.1 percent to 1.30 litas, the lowest closing price since the company's IPO in June 2000, with 170,900 litas' worth of shares traded. Traders said Telekomas' slide apparently was tied to the general weakness of hi-tech stocks in the global markets. Another 497,100 litas' worth of shares in Telekomas changed hands via block deals.

Other official list stocks ended the week mostly in positive territory, though trading volumes were less than modest. The TV-tube maker Ekranas climbed 1.2 percent to 5.85 litas on a turnover of 14,100 litas, the brewery Kalnapilis was up 1.1 percent to 4.30 litas in trade worth 15,000 litas, cheese maker Rokiskio Suris firmed 2.6 percent to 20.65 litas in trade worth 20,600 litas, and knitwear producer Utenos Trikotazas was stable at 2.80 litas on a turnover of 5,600 litas. The refrigerator producer Snaige rose 10.7 percent to 31 litas with 32,600 litas' worth of shares traded. Snaige's growth shows that the early August market overreacted on the suspension of negotiations with potential western European strategic partners.

On the current list, the electronic components maker Vilniaus Vingis held steady at 4.50 litas in trade worth 51,700 litas, while Ukio Bankas dropped 13.4 percent to 3.62 litas with 35,800 litas' worth of shares traded.