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Baltic Index upward growth continues

  • 2000-07-27
Last week the Baltic Index continued to rise for the second consecutive week, boosted by both rapidly climbing shares in Lithuania's Kalnapilis brewery and falling euro exchange rates. The Baltic Index rose 0.91 percent to 107.02 over the week, though ten of the 15 stocks making up the Baltic List ended the week on the negative side. Kalnapilis brewery provided a boost to the Index with its 16.67 percent jump for the week.

The total Baltic List turnover last week increased by one-third to 3.68 million euros ($3.44 million). Estonian stocks accounted for 2.42 million euros or 66 percent of the total, Latvian stocks for 22 percent and Lithuanian stocks only for 12 percent.

In Estonia and Lithuania, the Baltic Listed stocks comprised 70 percent to 75 percent of the turnover on the Tallinn and Vilnius exchanges. In Latvia the share of Baltic List stocks in total stock exchange turnover was just 44 percent. The Baltic List capitalization on July 21 was 3.02 billion euros as compared to 3.01 billion euros the previous week. The Estonian share in the Baltic List capitalization was 1.84 billion euros (+0.65 percent), Latvian 419 million euros (0 percent change) and Lithuanian 754 million euros (-0.5 percent).

Estonia: index shows slight gain

The prices of key shares moved up midweek before giving up much of those gains, reported the Tallinn stock exchange in the outgoing week; Hansapank produced the top turnover figures. The TALSE stock index gained 1.05 percent to 139.44 over the week. Hansapank broker Romet Tepper said if in the first half of the week there was slight buying interest from the West, then the market lost some ground after foreign investors orders were met.

Hansapank, the market's volume leader at a total 26.3 million kroons ($1.57 million), closed the week 0.60 percent down at 123.25 kroons. The broker said that investors are prepared to sell bigger blocks of Hansapank at 125 kroons, while buyers are ready to go into action at under the present market price. As the market price straddles the buying and selling interest at the moment, no major moves are taking place in trade with Hansapank stock, Tepper said.

Tepper also noted Uhispank's turnover has dried up. Over the week, only about one million kroons' worth of Uhispank stock changed hands, and the price fell 0.69 percent to 28.80 kroons. Block deals are bid in the range from 28 to 29.50 kroons a share, the broker said.

The market is expecting Q2 results from both Uhispank and Hansapank due to appear next week. Concerning Uhispank, Tepper said, it is good to know what price the stock of Optiva Bank shares had in Uhispank's books and whether the bank earned a profit or made a loss on the deal (by selling Optiva shares to Sampo). Hansapank is expected to show a profit of 270 million to 300 million kroons in Q2. Tepper said the share price would not move if the profit figure was in that range, but if the result was different, a price movement would reflect the change.

As regards Eesti Telekom, Tepper said the share was slightly affected by a significant rise in Central European telecommunication stocks over the past week. "It is not expressed in the turnover in Tallinn, because of deals made in the form of GDR's, and that does not reach the Tallinn stock market," the broker said. On the Tallinn bourse, Telekom generated 7.8 million kroons of turnover, with shares rising 1.80 percent to 113 kroons.

Shareholders in Optiva Bank received clarity from an announcement by Sampo Finance, which said its takeover price was 7.80 kroons per share. Optiva ended the week at 7.70 kroons on trade of 1.3 million kroons.

The broker said there was new interest in the region and hopefully trading on the Tallinn stock exchange would continue with a moderate rise before the end of summer. Total turnover on the Tallinn bourse was 51.2 million kroons.

Latvia: downward trend resumes

The Latvian stock market saw significant price fluctuations in several leading stocks. The general trend can be described as downward, because all stock exchange indexes fell over the week. The Dow Jones Riga Stock Exchange (DJRSE) capitalization index dropped 1.82 percent to 106.16, and the price index RICI skidded 2.91 percent to 155.99, a record low level for the year.

The indexes were brought down mostly by the 4.36 percent drop of Ventspils Nafta's shares to 1.19 euros. The oil terminal's shares accounted for a turnover of 167,000 euros. The failure of the Latvian Privatization Agency (LPA) and Ventspils Nafta's largest shareholder to reach an agreement on dividend distribution for 1999 is not likely to increase the investors' interest in those shares, however.

In addition, last week saw many reports from Russia about concrete plans to build the Baltic Pipeline System (BPS), another reason for investors to worry. The prospects of a strictly centralized oil business in Russia can hardly serve as a basis for predictions of further reloading increases through Ventspils in the coming years.

The negative impact of falling Ventspils Nafta's shares was compensated by a 4.4 percent gain of Latvijas Gaze shares to 4.27 euros. The gas company's shares accounted for a turnover of 160,000 euros. Although dividends on these shares have already been calculated, Latvijas Gaze kept climbing as large shareholders continued to buy shares in the company. Last week the Itera-Latvija company confirmed its unrelenting interest in Latvian Gas shares.

The still unsettled issue about the possible sale of remaining state holdings in the company also helps to maintain interest in Latvijas Gaze At present the Latvian Privatization Agency is considering two options - either to sell a two percent stake of state-held shares in Latvijas Gaze or sell the entire 10 percent in the company still held. In the latter case the auction price per share in Latvijas Gaze is likely to increase possibly up to 3 lats ($4.95).

Latvijas Unibanka's statement showing 5.05 million lats semi-annual profit did not have any considerable effect on investors, and the bank's shares skidded 1.26 percent to 2.68 euros on a turnover of just 66,000 euros. The target annual profit set by the bank at 10.5 million to 11 million lats still seems realistic enough, therefore there are no grounds to expect further rapid declines in Latvijas Unibanka's share price.

Large block deals in Balta's shares put the insurance company in the leading position among Latvian Baltic List stocks by turnover. Balta's shares saw turnover of 413,500 euros last week while the price per share edged down 0.31 percent to 5.34 euros. Suprema's analysts believe that the great amount of block deals should be seen as evidence of a large shareholder disposing of her holdings in Balta.

Grindex shares worth 583,000 lats were transferred from one account to another during the week. This deal accounted for half of the weekly turnover on the Latvian bourse and was required by the pharmaceutical company's owner, Arials, as a pledge of Grindex shares to Estonia's Optiva Pank.

Due to the Grindex deal, the Riga Stock Exchange turnover reached 1.11 million lats.

Lithuania: Telekomas down again

The Lithuanian stock exchange remained mired in the summer doldrums last week. Turnovers were modest on the central market, and benchmark stock Lietuvos Telekomas moved lower, ending a relatively stable period of two weeks.

The market ended the week mostly in negative territory because of Telekomas' losses. The bourse's continuously tracked price index Litin-10 eased 1.48 percent to 1014.96, the blue-chip official list index Litin slid 1.75 percent to 465.20, while the secondary Litin-A dropped 1.97 percent to 1048.65. "Trading is traditionally slow in the summer. Activity fails to pick up, even with the release of semi-annual corporate results," Hansabankas broker Tomas Andrejauskas said.

Blue-chip Lietuvos Telekomas' share price was down 1.35 percent to 0.68 euros, close to the historically lowest level of 0.67 euros. The stock's turnover was 1.61 million litas ($402,500). "This was an unexpected fall as in London (Telekomas' share price) holds at much higher levels," Suprema broker Arvydas Jacikevicius said. "Interest had been low on both the buy and sell sides, and the price dropped when supply increased."

Vilniaus Bankas slipped 0.93 percent to 7.86 euros with 31,900 litas worth of shares traded on the bourse. It seems that Vilniaus Bankas has been staying in the background since Telekomas' flotation in mid-June, Andrejauskas said.

Cheese maker Rokiskio Suris was off 0.76 percent at 20.81 litas with 83,300 litas turnover. Brewer Kalnapilis charged ahead by 16.67 percent to 3.50 litas, but turnover was thin at a mere 6,400 litas.

On the Current List, power utility Lietuvos Energija was the focus of investor attention, staying flat at its usual 5.00 litas on 203,100 litas turnover.

Siauliu Bankas slumped 15.54 percent to 40.54 litas with 72,100 litas worth of shares traded, and fertilizer firm Lifosa jumped 22.58 percent to 15.20 litas on 48,000 litas turnover.

The overall equity turnover on the bourse came to 2.34 million litas last week.