Last week share prices on the Tallinn Stock Exchange were bouyed by speculative trading sparked by Sweden's Swedbank buying more than four percent of Hansapank's shares.
Swedbank increased its stake in Hansapank to more than 10 percent.
Swedbank's buying up Hansapank shares helped prop up the entire market while it lasted. When it ended the market fell considerably on Friday.
Uhispank broker Priit Jarviste said that most of the activity on exchange this week was due to Swedfund which helped mitigate the impact of drops in neighboring markets.
"When Swedfund stopped buying on Friday prices crashed," he said.
Jarviste said worries about a possible devaluation of the Russian rouble could seriously hurt Estonian exporters. "This problem could knock down the market," he warned.
"On Friday Russian exchange was able to improve considerably," Jarviste noted. "If the panic subsides there, then the Estonian securities market should be able to hold on, although uncertainty will remain."
Jarviste pointed out that Swedfund or another major investor may want to increase their holding in Hansapank. In his opinion only the interest of Scandinavian investors in Estonian shares can lead to a turn-around of the market.
Estonian banks are to release consolidated earnings this week, on which investors will base their further calculations of the bank's effectiveness. "These results won't have an impact on the market immediately but they will influence it," said Jarviste.
Last week the TALSE Index fell 4.07 percent to 128.75 points.
The largest falls were for shares in Reval, EVEA Pank, and Leks Kindlustus insurance company, which lost 19, 16 and 13 percent respectively.
On the major list shares in Farma were the worst hit, losing 10 percent to 17.11 kroons.
Hansapank's share price rose 5.44 percent to 61.59 kroons, but closed on Friday at 58 kroons.
Shares in Forekspank and Uhispank both fell about six percent.
The leading stock last week was ASA Kindlustus, which posted a 63 percent gain to 12.56 kroons.
Latvia: Bears and pessimists haunt RSE
Last week brought nothing positive to trading on the RSE with share prices continuing to fall at a brisk pace. The same can be said for turnover and market capitalization.
The DJRSE Index fell more than seven percent last week to 179.93 points while the RICI Index shed six percent. Turnover was down 6.75 percent and market capitalization 3.5 percent.
In contrast to Latvia, shares on the Tallinn and Vilnius exchanges fell considerably less, by 3 to 4 percent. The only good thing that can be said is that share prices in Russia fell even more, by 13 percent.
Unibanka's shares continued to help drag the market down. The bank's shares fell by 9.3 percent last week to 1.47 lats. Among the reasons for the fall two stand out Ñ one objective and the second psychological.
The objective reason is that the bank's share price should fall because an additional three million shares will begin trading on August 20, and investors are just reacting to this development.
The psychological factor is that the price of the bank's GDR on the London exchange keeps on falling. On Friday Unibanka's GDR was quoted between 1.30-1.40 lats. Even though trading was negligible (even by Riga's standards) the fall of the price on the London market has a psychological effect on traders in Riga.
Unibanka's seven month profit indicates that the bank is unlikely to meet its 8.5 million lats profit target. It must also be said that the conservative bank is not known for its ability to earn profits in the chaotic situation in neighboring markets.
However it does look like Unibanka will be able to attain the seven million lats in profit it earned last year, which would give it a P/E coefficient of six, sufficiently attractive to take a position in the bank.
Looking at the rest of shares, those companies heavily dependent on the Russian market took hits of 6 - 10 percent, such as Daugvapils Drive Chain Factory, Riga Shipyard, Riga Transport Fleet, Staburadze confectionery, Valmiera Fiberglass and Olainfarm.
Of liquid shares only Rigas Komercbanka held its ground and with a P/E ratio of 4.5 remains very attractive.
Trading this week is likely to be nervous. Investors will be watching developments in Russia and Asia closely. The price of Unibanka's GDR on the London exchange is also likely to continue to strongly influence the Riga exchange as well.
Lithuania: Vilnius exchange catches Russian bug
The financial crisis in Russia accelerated the decline on the Lithuanian exchange last week despite assurances from Lithuanian experts that it would have no effect.
The fall of all of the exchange's indexes picked up speed on Thursday, and even shares which had been rising caught the Russian bug and began to fall.
Vilniaus Bankas' share price had been rising, but on Thursday and Friday it suffered a big reverse and ended the week down 7.15 percent at 30.15 litas.
However brokers note that VB's share price stabilized and even picked up a little in continuous trading on Friday, which gives brokers from Suprema hope that it will rebound. They don't exclude the same could happen for Hermis' shares, whcih ended this week down 3.26 percent at 125.44 litas.
Trading on the exchange was light last week, with a total turnover of 10 million litas, of which only about half was in shares.
Lietuvos Energija continued to hold at five litas with one million litas in trades.
Trading in the Klaipeda brewery Svyturys was also active, but its share price fell 2.62 percent under selling pressure to 58 litas.
The Litin Index fell 3.59 percent last week to 632.08 points, while the LitinA ended the week down 2.25 percent at 1526.44 points.
Experts were too timid to make forecasts for this week, save that much will depend on how the situation in Russia and Asia develops.
Russia: Stocks rebound after a wretched week, but few see long rally
Russian stocks bounced back remarkably before the weekend after a gloomy week of panic-stricken trading, the oil sector pulling the market out of the abyss, though traders remained sceptical that a rally was round the corner.
Trading was briefly suspended for the third time last week, only this time because of sharp gains rather than losses, as equities wiped out half of the losses recorded in what had been a wretched week for Russia's bedraggled financial markets.
At 6:00 p.m. on August 14 the leading Russian Trading System (RTS) index stood at 115.00, up 13.67 percent from previous day's close and well clear of the two-year lows set with alarming regularity earlier in the week. But volumes were thin and the index was still almost 13 percent lower than last Friday's close.
Oil stocks fared particularly well, LUKoil closing up 28.2 percent at 6.09 dollars and the other main oil blue chip Surgutneftegaz closing at 0.1 dollars, up 26.6 percent.
Traders were somewhat mystified by the rally, singling out helpful noises from the US administration overnight, a robust defence of the ruble offered by President Boris Yeltsin and a slight improvement in Asia.
Few held out much hope however of a long-term rally, and some said that Friday's oil-led turnaround could actually have been motivated by investors snapping up export-oriented stocks, which would likely outperform the market in the case of a ruble devaluation.
"The buying is very specific to the export sectors, oil and gas," said Loren Bough, a trader with Brunswick Warburg. "The feeling is that devaluation is very close. So we're seeing oil and other export stocks moving ahead."
Meanwhile bond yields, indicative of confidence in the government's ability to pay its way, eased before the weekend from vertiginous heights hit during a week.
"Sentiment is slightly better and we are trading higher in price terms, which has brought yields down," said Maxim Safonov, a fixed income trader with ING Barings in Moscow.
The one-month paper was yielding a giddy 153 percent, the six-month bond was yielding 160 percent and the one-year paper was yielding 140 percent. But all yields were substantially lower than on the previous few days.
Government bonds plummeted this week as fears deepened that the country's fiscal crisis could bankrupt the government, trigger a debt default and force a sharp devaluation of the ruble.
Yeltsin said in Novgorod on Friday that he would defend his currency and that his government had the situation under control. "There will be no devaluation," the Kremlin chief said.
However, on Monday, Aug. 17, the ruble was de facto devalued by 50 (!!) percent.
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