TALLINN - The Estonian casino operator Olympic Entertainment Group made a stunning debut on the Tallinn Stock Exchange, raising almost one billion kroons (63.9 million euros) through its share market float on Oct. 23. In the past week, shares have climbed 32.8 percent, from the launch price of 73 kroons to 97 kroons as of Oct. 31. Trade in Olympic shares made up almost half of all market activity on the combined Baltic exchanges in the week following the launch.
The initial public offering from the well-established gambling group was the biggest float on the Talllinn exchange since shipping line Tallink debuted almost a year ago.
Olympic eclipsed even that event. With a paper value of about 5.8 billion kroons, the company now makes up a sizeable chunk of the overall Baltic listed market. It entered the Tallinn Stock Exchange as the second biggest listed company, trailing only Estonian Telecom.
Brokers said other privately-owned companies may soon be looking to cash in on the strength of the ten-year old exchange, which has now proven an effective capitalization vehicle for several of Estonia's largest corporations.
Institutional investors from Estonia and overseas were the first to snap up the hotly sought-after shares through the public offering, which was managed by Hansapank and enjoyed a seven-fold over-subscription from interested buyers.
The float occurred simultaneously in Estonia, Latvia and Lithuania, the first time in history a company has floated in all three countries.
Observers said the initial success of the float meant investors saw growth prospects ahead for Olympic, which operates 74 casinos in Estonia, Latvia, Lithuania, Ukraine and Belarus.
SEB Eesti Uhispank broker Karoly Kirber told The Baltic Times the Olympic float was the biggest movement on the exchange this year.
"Many investors think it's a very well valued company," Kirber said. "In the last two years there have been quite a lot of IPOs (initial public offerings). Before that there was a big pause. In the Baltics, you can see that raising money from capital markets and through IPOs is not a possibility that has been fully explored.
"Many companies don't care much about the stock exchange. The interest rates have been so low that it is easy enough to get money from banks. But when interest rates become higher, and the competition between the banks is not so aggressive, I think we will see a lot more companies turning to the stock exchange to raise capital."
Kirber said the oil transit group Estonian Oil Service was the next company hotly rumored to launch an IPO on the Tallinn exchange in the coming months.
The rest of the market was buoyed by the results of the float, although Kirber said other stocks probably would have performed strongly regardless.
"The reaction was positive, but it was positive before the IPO," he said.
