Expectations of disastrous second quarter economic figures in Estonia pulled the market down early in the week, with selling pressure starting Tuesday, easing by Thursday and prices starting to bounce back again after positive news on Friday. The TALSE index fell by 3.61 percent to 109.44
"It was an interesting week, with lots of hopes and fears," Optiva Bank broker Kaur Elviste said. The 2.4 percent decline in the gross domestic product for the second quarter was far better than expected, the broker said. The most pessimistic forecasts predicted a decline in GDP of up to 8 percent. Some investors started to sell off their positions in the middle of the week, driving down share prices. Both the financial sector and Norma's stock came under selling pressure.
As moods changed on Thursday, prices of the most-traded shares moved in different directions. Prices recovered Friday morning, following the release of news of better than expected GDP figures. Elviste said a 25-minute breakdown after the first five minutes of trading on the stock market put a brake on the stormy rise.
Of main list shares, Telecom fell the most over the week, down by 8.33 percent to a closing price of 88 kroons ($5.92) on Friday. "We can see the shares were not yet affected by the macroeconomic news on Friday," Elviste said. "The effect will hopefully appear later, it takes time for the news to get to foreign investors," he added. But the broker also said that Telecom's 4.6 million kroon turnover on Friday was the highest over recent trading sessions and gives hope that investors have found a reason to be buying again.
Shares in the Rakvere Lihakombinaat meat-packing company moved up a sharp 9.68 percent, its first jump in some time. The broker said there was one investor's one-off order behind the rise, which has now been met through preliminary agreements.
The highest turnovers in the outgoing week, 21.8 million kroons and 16.6 million kroons respectively, were from deals in Norma and Hansapank stock. In the supplementary list, Saku brewery stock generated the week's biggest turnover of 2.5 million kroons.
Latvia: Waiting for an autumn awakening
The kids are back in school, but you'd think investors are still on vacation from the trading levels seen on the Riga Stock Exchange. Despite the slow trading, the bourse's indexes rose slightly. The DJRSE notched up a 0.27 percent gain to 81.10 points, while the RICI climbed by 2.80 percent to 170.73 points. The RICI's sharper rise is due to the 14.29 percent rebound by the milk cannery Rezeknes PKK to 0.16 lats ($0.28), and the 8 percent jump in Liepajas Metalurgs to 0.27 lats. The turnover in these stocks was low, however, under 6,000 lats or 4 percent of total turnover on the bourse.
The jump in Liepajas Metalurgs stock price was caused by the announcement of an unexpectedly high seven-month profit of almost 1.2 million lats. Large investors remain cautious, however, as experience has shown the company's earnings results are extremely volatile.
Over two-thirds of the bourse's turnover was in shares in both Unibanka and Latvijas Gaze. Unibanka's shares had climbed to 1.02 lats during the week, ending at 1.01 lats on Friday for a 1 percent gain for the week. In addition to worries about the macroeconomic situation in Latvia and concerns over the health of the banking system, investors are concerned over Unibanka's loan portfolio. In particular, loans to sugar producer Jekabpils Cukurfabrika and Tolaram Fibers are bringing some investors fitful nights.
Investors also remain cautious about the Latvian gas company's shares as the Latvian Privatization Agency has still not announced the conditions or date for auctioning a stake in the company. The utility's share price held at 1.70 lats.
Ventspils Nafta's share price also held steady this week at 0.48 lats. There is still the possibility for more bad news to hit the company's stock price further as the Russian government has not come to a final decision on oil export tariffs, and Lithuania is still trying to lure a Russian company into participating in the Mazeikiai Oil complex.
Lithuania: Prices up despite correction
Last week trading on the Lithuanian National Stock Exchange remained fairly active, but the steady rise in share prices broke midweek and a slight correction ensued. Nevertheless, the main indexes ended the week up. The Litin-10 finished the week up 4.36 percent at 1251.20 points and the Litin up by 1.72 percent to 570.94 points.
"On the bourse trading is continuing in certain companies with the hope of the eventual appearance of a strategic investor," said Hansabank Markets broker Aivaras Abromavicius.Only shares in Mazeikiai Nafta were able to break the downward trend at the end of the week, buoyed by the news that talks between the Lithuanian government and Williams International, concerning the sale of the company, are nearing a close. "Trading in the shares was activated by the news that Williams' investment project in Mazeikiai Nafta is moving forward," said Finasta broker Aurelijus Rimkus. Mazeikiu Nafta's share price skyrocketed 28.57 percent to 0.90 litas ($0.23) on a central market turnover of 384,000 litas.
Shares in the refrigerator manufacturer Snaige gained 5.48 percent to 36.97 litas on a turnover 367,700 litas although they had traded as high as 40.11 litas during the week. "On the bourse there are rumors circulating about a possible strategic investor and official offer," Baltic Securities broker Dmitri Dutov.
Shares in Hermis Bank rose 3.94 percent to 114.63 litas on a central market turnover of 394,600 litas, while shares in Vilnius Bank were up 0.3 percent to 27.08 litas on a turnover of 392,900 litas.
On the current list, trading in Ukio Bankas' shares continued to be the heaviest at 1.13 million litas on the central market. The share price slid 1.12 percent, however, to 7.06 litas. Turnover on the bourse totaled 21.28 million litas last week, with central market turnover at 3.5 million litas. Brokers expect prices to stabilize this week but do not forecast a rebound.
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