Head-over-heels selling of Telecom stock on Thursday brought down
nearly all share prices in Tallinn in the outgoing week. The TALSE
index fell by a total of 5.76 percent to 104.84 points for the week.
"Overall during the week, the market was affected by Telecom's free
fall on Thursday," Hansapank broker Romet Tepper said. Tepper said
the reason for Telecom's fall was a major sell order in London. "As
local investors were unable to buy up the share any more, the share
went into a free fall, pulling down Hansapank with it as well,"
Tepper said.
Telecom stock fell by 4.36 percent on Thursday and by 8.52 percent
for the week, closing at 83.25 kroons ($5.50) a share on Friday.
Shares in Hansapank closed at 83.75 kroons, down 3.74 percent from
the previous Friday. "Little attention was given to fundamental
indexes in this situation," Tepper said. "Hansapank's profit figure
was forgotten overnight."
On Wednesday, Hansapank reported a 47.6 million kroon profit figure
for August. The bank's eight-month profit stands at 323.3 million
kroons. Uhispank earned a profit of 9.6 million kroons in August and
its eight-month profit totals 64.4 million kroons.
Starting off slowly, trading gradually gathered momentum during the
week. If on Monday turnover totaled only six million kroons, on
Friday it was 23.3 million kroons. The week's total turnover was 74.7
million kroons, and the biggest turnover was from Hansapank stock -
28 million kroons, followed by Telecom and Norma at 15.3 million and
14.4 million kroons respectively.
Brisker trading in main list shares resulted in lower turnover in the
supplementary list, which accounted for just under 6 percent of the
total turnover during the week.
Latvia: Record-breaking blues
The Riga Stock Exchange's indexes were locked in a dubious
competition last week to see which could set the worst performance
record. The DJRSE "won," setting record lows every day of the week
while the RICI price index set record lows only four out of the five
trading sessions. The DJRSE index sank 6.69 percent to 73.18 points,
while the RICI slid 3.9 percent to 156.60 points. Prices of almost
all liquid shares fell sharply. Unibanka and Rigas Transporta Flote
were both down between six and eight percent, while Latvijas Balzams
and Rigas Kugu Buvetava shipyard fell 10 percent to 11 percent.
Shares in Ventspils Nafta plunged 17 percent to 0.39 lats ($0.67).
The scandal in the change of management of the Russian pipeline
operator Transneft is not in Ventspils' favor, despite what the
Russian press says to the contrary.
Only three stocks on the official and second lists posted gains last
week. Shares in fiberglass manufacturer Valmieras Stikla Skiedra and
milk cannery Rezeknes PKK rebounded in light trading.
Grindex's share price shot up 12 percent last week. Roberts Idelsons,
Suprema brokerage's director, says the stock is enjoying solid demand
by an unknown buyer. Latvijas Gaze's share price held at 1.70 lats.
Apparently its major investors are prepared to maintain their stakes
at this price.
Share prices are likely to stabilize next week and a slight
correction is possible, but turnover is likely to remain low. The
news of the government endorsing a 2000 budget with a fiscal deficit
of two percent of GDP is likely to be well received. Unibanka's
shares will continue to be influenced by developments surrounding two
near-bankrupt companies to which it has lent large sums - Tolaram
Fibers and Jekabpils Cukurfabrika.
The situation with Tolaram Fibers is particularly risky for Unibanka,
not only for the size of its loan, but for the potential damage to
its reputation among the public and local government as the bank is
likely to be portrayed as the bad guy responsible for turning
thousands out of work.
Lithuania: Banks merger drives trading
Trading in most shares remained passive on the Lithuanian National
Stock Exchange last week, with bank shares the one bright spot. The
Litin-10 index climbed 0.51 percent last week to 1246.80 points, with
the blue-chip Litin index jumping 2.57 percent to 564.83 points.
The gains were due mostly to the rise in Bankas Hermis after the
announcement that the Lithuanian central bank went ahead and approved
the bank's merger with Vilniaus Bankas. According to unconfirmed
reports Vilniaus Bankas is prepared to pay 128.50 litas ($32.12) per
Hermis share. Last week Hermis' share price jumped 12.33 percent to
119.68 points on a turnover of 398,000 litas. But Baltic Securities
broker Dmitri Dutov noted it is still not clear when Vilniaus Bank
will begin buying Hermis' shares.
Dutov believes there will be few buyers of Hermis' shares above 120
litas, and in the near future the shares will stabilize around
115-120 litas. Trading in Vilniaus Bankas' shares was even more
active (460,300 litas on the central market and 720,000 litas
overall), but its share price unexpectedly fell 2.26 percent to 25.96
litas. "The drop in Vilniaus Bankas' share price seems illogical
because demand in the near future should jump considerably," Dutov
said.
Trading in other Official list shares was subdued, not breaking
70,000 litas. Suprema broker Arvydas Jacikevicius said investors
haven't lost interest in the shares, but the spread between bid and
offer prices is too wide. On the current list trading in Ukio Bankas
was most active with 684,000 litas in turnover. "Rumors of a
strategic investor in Ukio bank made the rounds of the market once
again, but such talk has continued for three months," said Hansabanka
Markets broker Aivaras Abromavicius.
On Tuesday two direct deals in shares of the Kaunas-based brewery
Ragutis totaled 23.99 million litas, as half the company was sold
from Czech brewery Plzensky Prazdroj to Finland's Olvi. The average
price per share was 22.01 litas.
The Ragutis trade boosted overall market turnover to 37.05 million
litas. Central market turnover was just 2.46 million litas.
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