Baltic Index: Estonian shares up, no support from Lithuania

Heavy buying of Estonian stocks last week put upward pressure on prices, outweighing the negative effect falling Lithuanian shares had on the Baltic index. During the week from August 4-11 (12) the Baltic Index gained 0.32 percent, closing at 105.82. Gainers overtook losers eight to six on the Baltic List of blue chips traded on Tallinn, Riga and Vilnius bourses, with Estonia's Pro Kapital unchanged.

The stock prices in Estonia were pushed up by Norwegian company Linstow's announcement about its share purchases in Reval hotel group from minority shareholders. These sellers in turn reinvested their newly found wealth in other Estonian stocks, pushing up the indexes.

Early last week the Lithuanian market reached record lows under intense selling pressure. The Latvian stock market price index RICI also fell to a record low last week, though Latvijas Gaze posted significant gains.

The turnover of the Baltic List increased more than 1.5 times to 5.23 million euros ($4.78 mln). Estonian stocks accounted for 70 percent of the total with 3.5 million euros turnover, Latvian stocks 23.5 percent and Lithuanian stocks 9.5 percent of the list's total turnover.

Due to major transactions in Estonia's Reval Hotel shares, the Baltic List's stocks made up just 34 percent of the Tallin Stock Exchange turnover. In the Riga Stock Exchange the respective indicator was 92.5 percent and in Lithuanian National Stock Exchange slightly less than 50 percent of the turnover.

The Baltic List's capitalization as of August 12 was 2.92 billion euros, up 0.3 percent from 2.91 billion euros a week ago. The Estonian stocks made up 1.81 billion euros of the Baltic List's total capitalization, up 1.8 percent over the week, Latvian stocks 414 million euros, up 1.2 percent, and Lithuanian stocks accounted for 694 million euros of the list's total capitalization, down 3.5 percent from the previous week.

Norwegian investment spurs Estonian trading

Buying by local investors determined the mood of the stock market here during the past week as cash set free by the buyout offer from Reval Hotelligrupp's new majority owner Linstow International of Norway found their way into other stocks. The TALSE index climbed 2.49 percent during the week, finishing at 139.39.

In the words of Hansapank trader Lauri Lind, Monday's news about the sale of Reval Hotelligrupp shares to Linstow shaped the entire week. Having bought a 44 percent holding in Reval from Baltic Republics Fund, Linstow began buying Reval's shares from small shareholders on the open market at 74 kroons ($4.32) apiece.

The week's trading turnover of Reval Hotelligrupp shares was 83.3 million kroons. "Predominantly there were those investors on the buying side during the week, who were selling Reval," the trader said.

The investors are speculating that forthcoming buyout offers are on the way for shares in Viisnurk, Tallinna Kauba-maja, Merko Ehitus and Baltika, four issues which rose respectively 7.06, 11.90, 8.22 and 11.28 percent during the week. Hansapank too saw more activity as money withdrawn from Reval headed in its direction, Lind said.

On the other hand, Hansa was affected by news of a loan fraud which prompted the bank to set aside an additional 66 million kroons in provisions. The news took Hansapank sharply lower by mid-week, but on Friday's final tally, Hansapank gained 3.3 percent, closing at 125 kroons. The week's turnover of Hansa's shares came to nearly 40 million kroons. "It seems that the news didn't shake investor confidence much," Lind said. He added, however, that Hansa's resistance level presently stands at the current price of 125 kroons. "At that level there's selling interest on the market which keeps the market in place," the trader said.

Lind also said further growth in stock prices was impeded by the lack of buying interest from the West.

Because of huge deals with Reval shares, the TSE weekly turnover climbed to 160.8 million kroons.

Latvian stock market weakness continues

Most stocks fell in quiet trading last week on the Riga Stock Exchange (RSE). Both of Riga's stock market indexes closed lower as price index RICI lost 2.66 percent over the week to 154.52. The index fell to 153.66 points in the middle of the week, the lowest level so far this year. The capitalization index DJRSE meanwhile lost just 0.83 percent thanks to significant gains by Latvijas Gaze, and closed the week at 102.74.

Latvijas Gaze gained 6.52 percent over the week to 4.44 euros. But the weekly turnover of Latvijas Gaze amounted to a mere 31,000 euros, as investors are still awaiting the decision by the Latvian Privatization Agency about the size of the block sale to be offered at auction.

Ventspils Nafta led trading on the Latvian bourse, with shares worth 628,000 lats ($1.02 mln) changing hands. As expected, the company's shareholders, in their August 10 general meeting, decided not to pay dividends from the previous year's profit. The company's shares ended down by 3.44 percent, to 1.10 euros.

News about Latvian Unibanka's seven month net profit amount of 6 million lats for the time being did not arouse any enthusiasm from investors, as this number shows the bank meeting its profit targets for 2000. Nevertheless, the shares weakened 2.14 percent to 2.57 euros on a weekly turnover of just 66,000 euros.

Slow activity on the stock market today is characteristic of trading in Eesti Uhispank and Vilniaus Bankas as well, the other Baltic banks of the Scandinavian SEB group.

Other substantial moves on the Latvian market include falls of between 3-8 percent posted by companies the likes of Staburadze, Liepajas Metalurgs (Liepaja Metallurgy) and Daugavpils Pievadkezu Rupnica (Daugavpils Motor Chain Factory).

The weekly turnover on the RSE was 735,000 lats.

Lithuania: Telekom again finds new low, major indexes follow

Investor's eyes were trained on market trendsetter Lietuvos Telekomas, which moved higher towards the end of the week after Tuesday's slump to an all-time low. The stock exchange's continuously-tracked price index Litin eased 3.92 percent to 968.36, the blue-chip Official List index Litin slid 3.88 percent to 424.34, and the secondary Current List index Litin-A was even at 1066.60.

Blue-chip Lietuvos Telekomas, looking very blue these days, ended the week 3.71 percent lower at 2.25 litas ($0.56), recovering slightly from Tuesday's fall to 2.14 litas. Brokers say Telekomas came under heavy selling pressure at the start of the week, which eased later when bargain hunters stepped in.

Analysts say, however, that the upward trend is likely to be short-lived. They say Telekomas should stabilize in the near-term amid investor worries that the price will fall again when employee shares appear on the market. The government sold a five percent stake in Telekomas to the company's employees a year ago, subject to a lock-up agreement, which is valid until the end of August. Telekomas' turnover reached 1.09 million litas for the week.

Vilniaus Bankas slid 2.69 percent to 7.94 euros amid 620,000 litas turnover, and cheese maker Rokiskio Suris held steady at 20.80 litas on 77,200 litas turnover. Other Official List stocks were largely ignored by investors last week. Energy firm Lietuvos Energija, flat at its usual 5.00 litas, led trade on the Current List, generating a turnover of 1.31 million litas. Klaipeda Stevedoring Company (KLASCO) rose 2.05 percent to 4.49 litas on 25,100 litas turnover, and natural gas company Lietuvos Dujos ended the week 0.98 percent higher at 1.03 litas on 25,200 litas turnover.

With Lietuvos Dujos' privatization approaching, investor interest in the stock is gradually increasing, said Dmitrijus Dutovas of Baltijos Vertybiniai Popieriai (Baltic Securities).

A state-owned stake of 4.55 percent in tile maker Dvarcioniu Keramika was sold for 443,100 litas through a public offering on Monday, just five days before an unusual landslide crushed company's warehouses and communications.

The bourse's equity turnover came to 4.05 million litas.