The sharp drop of Eesti Telekom and Optiva Bank's shares pushed the Tallinn Stock Exchange's TALSE index down 6.4 percent to 160.86. The index of the seven Estonian shares now quoted on the Baltic Index was down considerably less, dipping only 1.18 percent to 108.18. This strength was due mostly to the addition to the Index of shares in Pro Kapital and Tallinna Kaubamaja.
The four Latvian stocks quoted on the Baltic Index also fell, pushing down their component of the index 3.05 percent to 123.95. The four Lithuanian shares quoted on the Baltic List managed a 0.6 percent gain to 119.33, accountable to gains in Kalnapilis brewery.
Turnover of Baltic List stocks climbed 30 percent compared to the previous week, to 11.52 million euros ($11.05 million).
For the first time since the launch of the Baltic List Latvian stocks accounted for most of the turnover. Latvian stocks generated a turnover of 7.46 million euros, or 63.5 percent of the total. Estonian stocks had a turnover of 3.96 million euros, 33.78 percent and Lithuanian stocks just 318,000 euros, 2.70 percent. Baltic List stocks accounted for 88 percent of turnover on the Tallinn Stock Exchange, 85 percent on the Riga Stock Exchange and 42 percent on the Lithuanian bourse.
Market capitalization fell 3.2 percent to 2.78 billion euros on Friday. The Estonian stocks had a market capitalization of 2.07 billion, down 7 percent. Market capitalization of Latvian stocks slipped three percent to 429 million euros, while market capitalization of Lithuanian stocks was down just 0.5 percent to 202 million euros.
Traditional industrial stocks enjoyed a boost on western markets last week, with the New York DJIA gaining 1.74 percent to 11,111 points.
Estonia: Tracking world markets
Movements of the Tallinn Stock Exchange were influenced by world markets in the outgoing week, with Telekom receiving the strongest hit. The TALSE index fell 6.40 percent to 160.86 for the week. Uhispank analyst Sven Kunsing said the week was interesting and affected by movements of the U.S. Nasdaq. The Estonian market followed the tumble on foreign and Nordic markets early in the week, but matched the recovery toward weeks end.
Insecurity generated by Nasdaq kept foreign markets in a negative mood in the first days of the week. By now, this has become replaced by expectations of the first quarter's results, Kunsing said. "This period of the publication of results may be exceptional because the results will not come as a surprise," Kunsing said. "And in many investors' opinion, it is useful to give up their shares briefly, despite relatively good growth figures." "In the long term, it may have an effect also on our shares, particularly Telecom," Kunsing said.
In the outgoing week, it was Telekom that sustained the biggest loss, plunging 11.02 percent to 135.25 kroons ($8.29). During the week, it dropped to as low as 125.25 kroons. After the price fall, Telekom has moved closer to its justified price, Kunsing said. "But nothing justifies even the present price level," Kunsing said. "In a year, inhibited growth and decreasing margins as well as confusion over tariffs will bring the price down from the present level," he forecast.
In the case of other stocks, Kunsing said, the price levels are more justified both in view of the companies' growth prospects and current results. Hansapank ended the week at 138.75 kroons, down 0.36 percent, Norma at 43.60 kroons, up 1.40 percent, and Uhispank at 30.80 kroons, down 1.28 percent. Uhispank is recommending to investors to BUY shares in Norma and Hansa, Kunsing said, but to avoid investments into Optiva Bank stock.
Continued unclarity about the sale of Bank of Estonia's holding put Optiva into a slide of as much as 9.50 percent to 8.10 kroons over the week. The week's lowest price was 7.60 kroons.
Of supplementary list shares, Kunsing mentioned Saku brewery, whose share has fallen a little bit too much following the dividend payment. The share lost five kroons in price during the week and closed at 57 kroons.
Turnover on the Tallinn Stock Exchange totalled 71 million kroons last week.
Latvia: Bears are back
Last week most official list shares slipped as speculative interest subsided, but strong gains by several secondary list shares helped cushion the fall on the Riga Stock Exchange's indexes. The Riga Stock Exchange's DJRSE index fell 2.19 percent to 114.02 under the influence of downward pressure from the heavily capitalized stocks. But the RICI price index ended up 0.88 percent to 200.03 points thanks to strong gains by Valmiera Fiberglass, up 18 percent to 0.49 lats ($0.82) and Olainfarm pharmaceutical company, up 17 percent to 0.12 lats.
Shares in Latvijas Gaze have lost speculative interest following their March 27 auction on the Riga Stock Exchange, falling 2.43 percent to 1.91 lats. Nevertheless, the shares were the leader by turnover with 3.42 million euros worth in trades. It can't be excluded, however, that the large direct deals were just formal transfers from one account to another.
Interest in other stocks has also waned. Shares in Ventspils Nafta may have reached their ceiling, an indirect confirmation being the pessimistic forecast by the director of the RSE about the forthcoming auction of five percent of Ventspils Nafta's shares. Over the week shares in Ventspils Nafta dipped 3.6 percent to 1.575 euros. Trading in Unibanka's shares has been quite calm, and any enlivening is unlikely before publication of first quarter results.
Uncertainty still casts a shadow over Balta's shares as talks over selling a controlling stake to Finland's Sampo drag on.
In the upcoming week Balta's shares are likely to be influenced by the announcement, after closing on Friday, that it has sold to Parex its stake in the Lithuanian insurance company Baltic Polis. But most of the shares in the company will be blocked until the April 19 shareholders meeting.
Among non-Baltic List shares, there were big gains by Grindex, Olainfarm and Valmiera Fiberglass. One possible explanation for the sharp rises is that major investors want to increase their holdings at these bargain prices.
Turnover on the bourse jumped three-fold to 4.9 million lats.
Lithuania: No news leaves market unchanged
Share prices remain stable in thin trading on the Lithuanian National Stock Exchange, a depressing situation which local investors now view as normal. The official list LITIN index slipped 0.12 percent to 587.28, the LITIN-10 price index was down 0.39 percent and the current list LITIN-A index dropped 0.42 percent to 1100.83.
"This week was just as inactive as the last, only the previous week prices slid, and this week prices fluctuated less," Suprema broker Arvydas Jacikevicius said. Of Official list shares trading volume in Vilniaus Bankas stock was most active at 1.18 million litas ($295,000). It slipped 2.12 percent to 8.18 euros. "The share price of that bank rarely changes significantly - yesterday it went up a couple of cents, today it could fall a few, because investors are waiting for first quarter results before making serious decisions," said Jacikevicius.
On the current list trading continued to be active in Lietuvos Energija's shares with 313,795 litas in turnover, with the share price remaining unchanged at 5.00 litas. Share turnover on the bourse totaled 2.89 million litas.
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