The Baltic List capitalization fell to a record low of 2.25 billion euros ($2 billion), down by 11.5 percent from the previous week, as practically all highly capitalized stocks followed a downward trend. Out of 15 stocks included in the Baltic List, seven saw their euro price slip, while seven rose and the Estonian retail chain Tallinn Kaubamaja remained unchanged. Losses overpowered gains, however. The Latvian gas company Latvijas Gaze slumped by as much as 36 percent, to 8.03 euros per share, and Estonia's Pro Kapital real estate company, whose listing was temporarily reinstated, nosedived 27 percent to 2.78 euros. Eesti Telekom was down 11.2 percent to 3.02 euros, and Lietuvos Telekomas ended the week at 0.35 euros, down 4.1 percent, which were record lows for both shares.
In the absence of any auctions or large block deals, the total Baltic List turnover dropped six times from the previous week to 7.6 million euros. Estonian stocks contributed 62.7 percent, Latvian stocks 25.3 percent and Lithuanian shares 12 percent of the total. The Baltic List stocks remained absolute volume leaders on their respective home stock markets in Estonia and Latvia, generating over 75 percent of the total share turnover while in Lithuania this figure was just 9 percent.
Estonia: Selling pressure hits Telekom
Global pessimism continued to influence the mood on the Tallinn Stock Exchange, with continued selling pressure on Eesti Telekom stock remaining strong. Over the week, the TALSE index fell 7.1 percent to 118.47, its lowest level in 20 months. Calculated in euros, the price index of the six Estonian Baltic List shares was off 8.7 percent to 111.85 points, an 11-month low. The week's turnover was nearly 80 million kroons ($4.5 million). "The whole market is acting in keeping with the negative sentiments under which shares are sold down," Uhispank capital markets strategist Aivo Kangus said. "Also remarkable is the end of speculation, in which a desired deal between major shareholders of Eesti Telekom failed to affect the share price in the way the deal makers had wished it to," Kangus said. "Their announcement proved only to be useless information and only served to increase uncertainty," he added.
Of the most traded shares, Telekom suffered the biggest fall, 11.2 percent, ending the week at 47.25 kroons on trade of 12.8 million kroons.
Shares in Hansapank fell 2.7 percent to 147.25 kroons on a turnover of 56.5 million kroons, which accounted for 71 percent of the market's total turnover during the week. Kangus said that according to his forecast, market uncertainty would be carried into the next week. "Before a strong clash on global markets there will be no reason to expect the prices to start moving up in the local market," he added.
Trade in shares in Pro Kapital has resumed for one month. The stock fell 26.7 percent to 43.50 kroons on 2.14 million kroons' worth of turnover. "It was a move that had been expected and I wouldn't expect any significant downward movement before its delisting. But volatility may increase," Kangus said.
Latvia: Latvijas Gaze falls back
Shares in the Latvian gas company Latvijas Gaze fell back to price levels not seen since before the auction of state-owned shares on July 19. Experts believe that the current price level is economically substantiated and do not expect any significant move, in either direction, in the future. Due to the loss in Latvijas Gaze shares, the Dow Jones Riga Stock Exchange capitalization index slipped 25.5 percent to 150.85 points. As compared with August 15, when the index hit 290, the capitalization index has dropped nearly 50 percent. At the same time, many other stocks quoted on the main lists on the Riga Stock Exchange posted gains, pushing the price index RICI up 0.19 percent, to 155.13, despite the loss by Latvijas Gaze. The euro price index of the three Latvian Baltic List stocks followed suit, losing as much as 23.3 percent, to 162.05, and likewise suffering a nearly 50 percent decline as compared with Aug. 15 - from 304.91 to 162.05. The weekly turnover of stocks on the bourse was 1.39 million lats ($2.22 million).
Latvijas Gaze's share price fell to the 4.3 lats-4.5 lats trading range already in the first half of the week, closing at 4.51 lats, off 37 percent, by the weekend. The current price corresponds to the price paid for Latvijas Gaze shares before the auction of the 2 percent state-held stake July 19. At this price, and with the expected profits for 2001, Latvijas Gaze shares have a price/earning ratio of approximately 17, well in line with market expectations. At the end of the week it became obvious that Latvijas Gaze shares, at their current price, have the support of buyers, therefore a majority of analysts do not expect the stock to sink further. It is just as obvious, however, that we are unlikely to soon see a share price of 11 lats.
Interest in other stocks was comparatively low on the Riga Stock Exchange. The oil terminal Ventspils Nafta jumped 4.2 percent to 0.73 lats per share on 38,000 lats in trade, responding to the increasing cargo turnover at the terminal, though the company's long-term prospects are still unclear.
The stock market still maintains a certain interest in the pharmaceutical company Grindex, though the shares were flat at 0.5 lats. Investors are watching the improving financial results of Grindex's subsidiary in Tallinn and are factoring in the company's expected award of the international quality certificate ISO 14001.
Lithuania: Snaige steals spotlight
Blue chip refrigerator producer Snaige stole the spotlight on the Lithuanian stock exchange in the outgoing week, staging an impressive rally under brisk trading. Traders said, however, that it is too early to speak about a general recovery on the market, as trading volumes were mostly low, noting that trading in Snaige shares sagged toward the end of the week.
The bourse's benchmark price index Litin-10 edged up 0.4 percent to 1,025.38, the official list index Litin was down 4.2 percent to 302.30, while the broad index Litin-G fell 1.1 percent to 779.33. Calculated in euros, the price index of the six Lithuanian Baltic List stocks gained 4 percent for the week, closing at 118.17. The euro-exchange-rate's weakness against the dollar also helped boost the Lithuanian Baltic index. The bourse's equity turnover reached 36.1 million litas ($9.02 million). Trading in government securities generated 6.51 million litas in turnover.
A total of 1.46 million litas' worth of shares in Snaige changed hands on the central market. Another 1.41 million litas' worth of shares changed owners through block deals. Snaige's share price reached a 52-week high of 41 litas on Sept. 5 but later took a downward turn, to 36.50 litas, still, ending the week with a 1.3 percent gain.
On Sept. 3, Snaige said it raised its annual sales forecast for 2001 from 156 million litas to 178 million litas. A revised annual profit target is to be announced in mid-September. Many market participants said, however, that, apart from the company's revised performance targets, there should have been other reasons behind Snaige's rally. Still some analysts believe that the rise in Snaige's share price could have been linked to some new information about negotiations on the sale of the company to a strategic investor. A representative of the Baltic Investment Fund management, one of Snaige's shareholders, initially said last week that the talks had not been resumed. On the next day, however, the same representative said he could neither confirm nor deny information about resumed negotiations.
Lietuvos Telekomas ended the week at 1.26 litas, its lowest level since the company's IPO in June 2000, with trade worth 244,500 litas. Elsewhere on the official list, trading volumes remained low. The cheese maker Rokiskio Suris climbed 4.6 percent to 22 litas on a turnover of 88,100 litas, the brewer Kalnapilis was up 4.6 percent to 4.50 litas in trade worth 47,300 litas, while TV-tube producer Ekranas slid 2.5 percent to 5.85 litas with 7,800 litas' worth of shares traded. Shares in the knitwear producer Utenos Trikotazas were not traded.
On the current list, dairy producer Zemaitijos Pienas dropped 4.2 percent to 3.65 litas in trade worth 77,200 litas, and yarn producer Trinyciai skidded 7.7 percent to 0.71 litas in trade worth 56,400 litas. The gas company Lietuvos Dujos climbed 3.3 percent to 1.55 litas on a turnover of 44,700 litas as news about changes in its privatization terms hit the media. The brewer Ragutis firmed 5 percent to 10.50 litas in trade worth 56,400 litas, while Ukio Bankas was down 4.2 percent to 3.65 litas in trade worth 32,800 litas. A huge deal worth 32 million litas was registered during the week for shares in the non-listed hotelier Muperlukas, in which almost 50 percent of its shareholders' equity traded hands.
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