Stock markets: weekly report (July 2 - 9)

  • 1999-07-15
Estonia: Buckle up for ride with Norma

Shares in the automobile seat-belt maker AS Norma was at the center of attention on the Tallinn Stock Exchange during the outgoing week, rising 23 percent to 29.90 kroons ($2.09) following reports that talks were under way for the sale of a strategic stake in the company.

The TALSE index rose 3.75 percent for the week to 116.82.

Norma began with a jump of 8 percent on Tuesday, after which it made an announcement that it is holding talks with Swedish car safety- equipment maker Autoliv on the possible sale of up to a 50 percent interest in the firm.

Veikko Maripuu, sales chief at the securities brokerage Suprema, said the overall picture continued to favor Norma's moving to higher ground. He said Norma's position could well move above 35 kroons.

"The clearer the picture gets concerning [Norma's] relations with Autoliv, the bigger foreign investors' interest in Norma will be," Maripuu said.

Norma's position in talks with Autoliv is quite good, according to Maripuu, because the Estonian company has a highly trained work force to offer.

"Autoliv's participation will give the company additional value," Maripuu said. "It's much better to be a flexible branch of a concern than try and manage on one's own."

Shares in Merko Ehitus rose 17.57 percent to 21.75 kroons during the outgoing week on a turnover of 3.5 million kroons.

Hansapank climbed 5.73 percent, Uhispank 4.96 percent, and Telecom 2.22 percent.

"A positive mood continues and all things bad are forgotten," said Maripuu dreamily.

The one standout on the supplementary list was Saku Olletehas, which moved up 14.51 percent to 50.50 kroons.

Maripuu said the share was strong enough fundamentally to continue its upward trend.

The market's activity picked up on Friday, when nearly 29 million kroons' worth of shares changed hands. The week's leaders in terms of turnover were shares in Hansapank, with 42 million kroons. Norma's turnover was 12.9 million kroons.

The total turnover of the stock exchange during the week was 89 million kroons, of which 74.7 million kroons constituted deals from the main list, 11.2 million kroons from the supplementary list and 2.6 million kroons from the free market.

Latvia: Government's fall rejuvenates bourse

The fall of Vilis Kristopans' government lifted stock prices on the Riga Stock Exchange last week, with the indexes posting their first substantial gains in weeks.

The cap-weighted DJRSE index climbed 3.36 percent to 83.92 points while the RICI price index rose 3.24 percent to 166.27 points.

Shares in Balta led the rise with a 10.71 percent increase, to 3.10 lats ($5.17). The insurance company's shares could rise even further as the market is convinced that the Finnish insurance company Sampo is trying to boost its stake in Balta.

Shares in Latvijas Unibanka rose 5.05 percent to 1.4 lats while the oil terminal Ventspils Nafta climbed 3.92 percent to 0.53 lats.

The rise in Ventspils Nafta's share price is connected with the jump of the price of Russian oil on the world market. In the past half year the price of Urals crude exported through Ventspils has more than doubled to 18 dollars a barrel.

With such a rise in price Russian oil companies now are interested in breaking the government-imposed export quotas, which only helps fatten Ventspils profits.

Unibanka's shares have more room to grow as analysts expect the bank to post 5 million to 6 million lats in audited half-year profits, which should attract more interest among foreign investors.

The change in government might also be to Unibanka's benefit if Andris Skele returns as prime minister. The bank has made large loans to Skele to buy the Ave Lat company, which has caused some concern.

No matter who becomes the next prime minister, foreign investors will be waiting for quick and decisive steps to put the country's fiscal house back in order. Only then will there likely be a major improvement in the stock market.

Lithuania: Slow holiday week

As expected, there was little activity on the Lithuanian securities market during the short holiday week; there were only four trading sessions, including Saturday, July 3.

The markets were closed Monday and Tuesday for public holidays.

Nevertheless the bourse's indexes ended the week up. The Litin inched up 0.05 percent to 504.71 points with the Litin-10 climbing 1.25 percent to 980.16 points.

The total turnover at 64.28 million litas ($16.07 million) was impressive, though almost 90 percent of it was in a direct deal for Lifosa fertilizer plant's shares. The turnover on the central market was just 917,200 litas.

On the official list, trading in Birzai dairy's shares was the most active, with 109,200 litas in turnover. The company's shares slid 1.60 percent to 1.85 litas.

Baltijos Vertybiniai Popieriai broker Dmitry Dutov believes that an investor sitting on the sidelines is waiting and, at these prices, might be ready to step in and buy a large number of the company's outstanding shares.

Investors ignored Vilniaus Bankas last week. Its share price slipped 0.38 percent to 26 litas on a turnover of just 56,000 litas.

Shares in Rokiskio Suris dropped 1.09 percent to 19.94 litas on a turnover of 50,300 litas, while shares in the refrigerator manufacturer Snaige were down 2.79 percent to 52,200 litas.

Shares in Lietuvos Energjia returned to the top spot with 353,800 litas in turnover. The utility's share price held firm at 5.00 litas.

On July 8, 15 percent of Lifosa went to the U.S. company Cargill, which will distribute Lifosa's products abroad. A total of 57.2 million litas in shares changed hands in the deal. Cargill paid 34.54 litas per share with a 20 litas par value.

Almost 1 million litas in Lietuvos Draudimas shares traded, with the share price sinking 7.49 percent over the week.