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Baltic Index gains despite lower turnover

  • 2000-03-23
The Baltic Index continued to climb last week despite a fall in turnover. As in the previous week, the rise was driven by shares in Ventspils Nafta, which soared 18.5 percent.

The Baltic Index registered a 1.56 percent increase to 118.57, though it managed to break the 120 level on Wednesday. The Baltic List of the Baltic states' 13 top stocks had seven stocks moving up and six down.

The Latvian stocks were the biggest gainers once again due to Ventspils Nafta. The Latvian composite index jumped 2.44 percent to 123.10, propelling the four Latvian stocks past the Lithuanian shares into first place. The RSE's indexes also climbed. The DJRSE cap-weighted index gained 2.40 percent to 113.04, while the RICI climbed 2.62 percent to 190.48.

The Lithuanian stocks gained 1.65 percent to 122.71. All three of the Lithuanian National Stock Exchange's indexes ended the week up. The official list LITIN index climbed 2.04 percent to 622.20. The current list LITIN-A was up 2.14 percent to 1138.69 and the LITIN-10 price index posted a 2.32 percent gain to 1270.01.

Despite thin trading Estonian stocks also posted a modest 0.73 percent gain, to 111.64, although they continue to lag behind both Latvian and Lithuanian stocks. Thanks to small gains by Hansapank, Eesti Telekom and Optiva Bank the TALSE posted a 1.56 percent increase to 170.32.

The turnover of Baltic List shares dropped 20 percent for the week to 7.4 million euros ($7.15 mln). The Estonian stocks generated a turnover of 4.6 million euros to account for 62 percent of the total. Latvian shares accounted for 24 percent and Lithuanian stocks 14 percent. Baltic List shares accounted for 83 percent of the turnover on the Tallinn Stock Exchange, 50 percent in Lithuania and, in Latvia, only 41 percent due to large direct dealing in non-member Baltic list - Staburadze shares.

The Baltic List's market capitalization on March 17 was 2.82 billion euros, a 1.8 percent increase over the week. Estonian stocks account for 2.20 billion euros in capitalization (+1.85%), Latvian stocks 420 million (+4.2%) and Lithuanian stocks 203 million euros (+1%).

In New York, with investors pouring back into "traditional" stocks after a long romance with internet stocks, the Dow Jones Industrial Average jumped 6.71 percent to 10,595.23.

Estonia: Share prices up in thin trading

Estonian blue-chips rose last week despite thin trading on the Tallinn Stock Exchange. The TALSE stock index gained 1.56 percent and closed at 170.32 despite turnover dropping by one third from the previous week. Three of the five Estonian stocks on the Baltic List posted gains, with the Estonian composite index rising 0.73 percent to 111.64.

Positive news was in the form of an upgrade in ratings of both Hansapank and Uhispank. Uhispank capital markets strategist Aivo Kangus noted that the ratings change did not have a significant effect on stock prices. Hansapank stock, which generated by far the week's biggest turnover of 47.2 million kroons ($2.91 mln), climbed 1.85 percent to 137.50 kroons.

At the same time, Uhispank fell 1.78 percent to 33.20 kroons. "Bank shares are at fundamentally high stable levels," Kangus said. "This should keep the market relatively stable and there shouldn't be any major fluctuations next week either."

Experts explain the 2.06 percent rise in Eesti Telekom's share price, to 148.50 kroons, to foreign investors not yet having sufficiently considered the risks the company faces, such as a delay in the approval of a tariff increase and a large fine from the government. Kangus said that publication of the current account deficit figure next week would be a guidepost for the stock market. Uhispank's forecast of the current account deficit in the fourth quarter is in the range of 13 to 15 percent, Kangus said.

EVP privatization vouchers continued strong this week, in accordance with a long-term forecast. The vouchers, with a nearly 4.7 million kroons turnover, leaped 5.45 percent to 0.46 kroons. Kangus' technical charts show the vouchers' resistance level at 0.50 kroons.

Of main list shares, Merko Ehitus construction group had the biggest change in terms of percent. Its share price rose 4.87 percent to 28 kroons. "Merko Ehitus has been holding relatively strong thanks to its contracts covering nearly 90 percent of this year's turnover target," Kangus said. He added that this provides certainty to investors' earnings forecasts. Kangus allowed for the possibility that positions in Merko are also being taken on the presumption of a change in the company's majority ownership.

Turnover on the Estonian exchange totaled 87 million kroons. Baltic List shares generated a turnover of 4.6 million euros, or 83 percent of the total.

Latvia: Ventspils Nafta up again

Last week Ventspils Nafta's share price continued to rise strongly, as most other stocks were slipping. The DJRSE cap-weighted index gained 2.40 percent to 113.04, while the RICI climbed 2.62 percent to 190.48. The index of the four Latvian stocks quoted on the Baltic List jumped 2.44 percent to 123.10, taking the lead position among the Baltic shares.

Ventspils Nafta's share price soared 18.49 percent to 1.30 euros. In a little over two weeks the company's share price has skyrocketed 56 percent. The oil terminal's price/earnings (P/E) ratio has risen from 2.3 to 5.0.

Shares in Unibanka fell 6.06 percent this week to 2.91 euros. The lack of news about the bank seemed to have contributed to a lack of interest in the stock by investors. Its turnover of 409,000 euros was in third place on the bourse, behind Staburadze and Ventspils Nafta. Activity with the bank's shares should pick up before the March 22 fixing of the shareholder list for the dividend payment, however.

Latvijas Gaze's share price climbed 1.96 percent last week to 3.64 euros, however the news that Gaz de France will not participate in the upcoming auction of state-held shares in the company no doubt chilled interest in the issue.

Among non-Baltic List stocks, most notable was the sale by Italian businessman Earnesto Preatoni of his 43 percent stake in Staburadze. The RSE reported the sale at the current market price of 1.10 lats ($1.85) per share, resulting in a 1.5 million lat turnover.

Shares in Staburadze accounted for 56 percent of the total weekly turnover of 2.58 million lats. Baltic List stocks accounted for 1.81 million euros, or 41 percent of the total.

Lithuania: Pullback follows surge

Share prices started the week up sharply in Vilnius but later fell back as turnover thinned. Brokers believe that after the surge in share prices during the first half of the week a correction was inevitable. But they expect the worst is already over and share prices should start rising again this coming week. Trading in Vilniaus Bankas' shares was the most active with 3.65 million litas ($912,500) in turnover. The shares climbed 0.51 percent to 8.48 euros. Hansabank Markets' analysts see the bank's shares rising to 10.7 euros within six months.

The turnover of the three other Lithuanian stocks quoted on the Baltic List was insignificant.

Rokiskio Suris' share price slipped 0.5 percent to 6.07 euros on a turnover of 117,500 litas. Hansabankas broker Tomas Andrejauskas noted that Rokiskio Suris' share price has begun to move in sync with Vilniaus Bankas, but the turnover shows that investors don't have that strong an interest in the stock.

On the current list trading was most active in Lietuvos Energija, which climbed 0.20 percent to 5.01 litas on a central market turnover 359,500 litas. This is the first time since May 5 last year the company's share price has been shaken from 5.00 litas.

Turnover on the bourse totaled 8.04 million litas. Baltic List stocks accounted for half of the total turnover.