Market surge halted

The explosive rally since the start of the year came to a halt last week, as trading turnover of Baltic Index shares dropped by half. The Index of the 13 blue-chip shares slipped 0.36 percent last week to 102.38 points. Only the Lithuanian component posted a small gain, while Latvian and Estonian stocks fell.

The Lithuanian shares of the BI crawled up 0.26 percent to 105.27. The Lithuanian bourse's LITIN-10 index climbed 1.04 percent to 1243.90, while the blue-chip LITIN index slipped 0.37 points to 551.37. The Estonian shares on the Baltic List fell 1.14 percent to 98.03, while the Tallinn Stock Exchange's TALSE index was down 0.58 percent to 138.5. Latvian stocks on the Baltic List were practically unchanged at 104.94, with the fall in Unibanka and Balta nearly matching gains by Ventspils Nafta and Latvijas Gaze. But overall the trend on the Riga Stock Exchange was down, with the RICI index posting a 1.99 percent drop to 178.34 and the DJRSE index slipping 0.83 percent to 99.05.

Turnover of shares on the Baltic List was 6.4 million euros, a drop of nearly half from the previous week.

Trading in Estonian shares continues to dominate on the Baltic List, accounting for 85.6 percent of the last week's total. Latvian stocks accounted for 10 percent of the total and Lithuanian stocks just four percent.

It is also worth noting that the Estonian and Latvian stocks on the Baltic List accounted for more than 85 percent of turnover on their bourse, while in Lithuania the figure was just 25 percent.

Total market capitalization of the Baltic List shares on January 21 was 2.29 billion euros ($2.36 bil.), a drop of 0.4 percent for the week. Estonian stocks accounted for 1.775 billion euros of capitalization, Latvian stocks 0.342 billion euros and Lithuanian stocks 0.173 billion euros. Other regional equity markets saw corrections as well. Warsaw's WIG-20 lost ground last week, sliding 3.24 percent to 1975. In Russia share prices plunged 10 percent at the start of the week, but the RTSI rebounded to end the week down just 0.28 percent at 202.14. A positive sign for the Russian market was Hansapank's decision to start quoting seven of Russia's most liquid shares in Tallinn.

Estonia

Hansapank was the only gainer for the week among the three Estonian bank stocks. Obviously the publication of the bank's results, as well as that of its Latvian subsidiary, did not disappoint investors. The TALSE index slipped 0.58 percent last week to 138.50. The five issues that make up the Estonian part the Baltic Index fell 1.14 percent last week to 98.03, with Hansapank the only gainer among them. "The banks' results were overall predictable, with only Optiva Bank giving a couple of surprises," said Optiva Bank's Sulev Raudsepp.

Optiva Bank posted an 18.7-million-kroon ($1,220,000) loss for last year after taking 30 million kroons in provisions in December. Raudsepp said that the market reacted calmly to the news and didn't punish the bank's share price.

New foreign investors with considerable sums to invest haven't appeared on the market, Raudsepp believes, and that is visible in the increasing concentration in trading in Hansapank's shares at the expense of Telekom. Raudsepp added that the arrival of long-term foreign advisors would cause share prices to move up and stay at that new level, while it is local investors which cause the current yo-yo in share prices. Turnover on the bourse totaled 100.4 million kroons, with 59 million kroons in deals with shares in Hansapank, 8.8 million in Norma's shares and 7.9 million in Telekom's shares.

Latvia

Last week trading on the Riga Stock Exchange stabilized, as prices pulled back in the most liquid shares. Both of the bourse's indexes fell for the week. The DJRSE index slipped 0.83 percent to 99.05. The RICI price index dropped 1.99 percent to 178.34.

The biggest drama was with shares in Unibanka, whose share price fluctuated by up to 20 percent, trading between 1.27 lats ($2.18) and 1.53 lats. By week's end, however, the shares stabilized at 1.45 lats, down 2.5 percent for the week. First Latvian Bank broker Janis Neimanis noted that last week, especially on Tuesday, speculators had good opportunities to profit in the price movements in Unibanka shares. But most specialists believe that the period of active trading in Unibanka shares has already passed, though Unibanka analyst Janis Purgailis doesn't rule out the possibility that interest will return to the shares.

The 3.46 percent rise in Latvijas Gaze's share price, to 2.0 lats, is completely understandable in the run up to the tender on March 27 of a large state-owned stake in the company. The price in the tender is likely to rise from the initial level of 1.80 lats per share to 2.0 lats. The jump in Ventspils Nafta's share price on Friday was most likely due to the news that Russia's LUKoil is interested in buying the stake in the oil terminal that will be privatized later this year.

Turnover on the Latvian market, including off-bourse deals, totaled almost 1.27 million lats. Official and second list shares generated a turnover of 465,000 lats.

Lithuania

Last week the rally in share prices halted, with trading volumes on the most popular shares thinning. The Litin-10 gained 1.04 percent to 1243.90, while the blue-chip Litin index slipped 0.37 percent to 551.37. The Lithuanian component of the Baltic Index crawled up 0.34 percent to 105.26 thanks to the strength of Kalnapilis, which compensated for a loss by Utenos Trikotazas.

"Turnover of shares decreased. You could say that after almost two weeks of gains the normal market correction has begun," said Finasta broker Aurelijus Rimkus. On the central market trading was fairly active in shares of Rokiskio Suris, at 494,400 litas ($123,600), which slid 0.5 percent to 24.0 litas. "The share price slipped a little, but demand remained. Most likely local investors are trying to play with them," said Rimkus.

Shares in Vilnius Bank climbed 1.6 percent to 28.20 litas on 477,200 litas volume on the central market. Brokers said demand for Vilnius Bank's shares was strong below 28 litas but thinned out above that price. Shares in Kalnapilis brewery jumped 4.99 percent to 3.72 litas on a small turnover of just 36,500 litas.

On the current list, trading in shares of Lithuanian Energy, Lithuanian Shipping Company and Mazeikiai Nafta were most active. In direct deals trading was most active in Ukio Bank's shares, with 1.3 million litas in turnover. Total turnover on the Lithuanian bourse was 44.5 million litas.