Bourse merger stirs markets

The announcement of a planned merger of the Helsinki, Tallinn and Riga stock exchanges into a single trading entity by May 2004 was the center of investors' attention and helped lift the Baltic Index to a new two-year high at 170.8 points.

"Our goal is that when Estonia and Latvia join the European Union in May next year, we would be able to create a single trading environment from the customers' point of view," Jukka Ruuska, CEO of the HEX Group that owns the three exchanges, said.

It is still unclear whether the Vilnius Stock Exchange would join the alliance.

Riga Stock Exchange President Guntars Kokorevics said that integration would definitely benefit stock market players in all three countries. "The goal of the RSE is to join an expanded chain of stock exchanges. The merger with HEX, one of the strongest stock exchange groups in Europe, is a chance to do this and we are working on it actively," he said.

Trading activity was brisk on the Riga Stock Exchange, with two blue chips - Latvijas Kugnieciba (LASCO) and Latvijas Gaze - seeing important developments. Since LASCO employees only bought some one-fifth of the shares offered to them, the remaining shares - 9.8 million, or 4.9 percent of outstanding stock - will be sold at the RSE. This will probably take place next year in order to gain maximal profit from the auction, according to officials at the privatization agency.

Latvijas Gaze's methodology for calculating gas rates was approved last week by the Public Utilities Regulatory Commission, thereby bringing the debate on the change of tariffs to an end.

LASCO was the bigger winner of the week, up 8.6 percent, and Ventspils Nafta one of the losers, down 3.8 percent.

In Vilnius, Lithuania's blue chips accounted for 52 percent of the total central market turnover, with the LIPI Index closing at 172 points. Refrigerator maker Snaige saw its shares jump 2.6 percent to 28.24 euros, while Lietuvos Telekomas decreased 6.3 percent on deregulation worries.