Thanks to Ventspils Nafta, Latvian stocks were able to show the strongest gains last week. Estonian stocks were also firm. In Lithuania, prices in litas remained mostly stable, but the euro exchange rate increase brought down prices and indexes calculated in euros.
The Baltic List turnover reached 18.5 million euros ($16.3 mln) in the outgoing week, with Latvian, Lithuanian and Estonian stocks accounting for an almost equal share of the total figure. Nearly 85 percent of the Baltic List turnover was from deals in shares of the three Baltic banks - Eesti Uhispank, Latvijas Unibanka and Vilniaus Bankas - being bought by the Swedish bank SEB.
Latvian stocks, with help from Latvijas Unibanka and repurchase deals, provided 38 percent of the total turnover, or 7 million euros. Estonian stocks accounted for 35 percent, or 6.4 million euros, and Lithuanian stocks the remaining 27 percent, or 5.05 million euros.
In Estonia and Latvia the Baltic List stocks made up over 89 percent of total turnover on their respective home bourses while in Lithuania this figure was closer to 17 percent. The week's minimal contribution by Baltic List stocks to the total turnover in Lithuania was due to large block deals in shares of companies quoted on the Vilnius' secondary list.
The Baltic List capitalization rebounded by 1.3 percent from the previous week's drop, to 3.05 billion euros. As of September 29 the capitalization of Estonian Baltic List stocks was 1.74 billion euros (+2.02 percent), for Latvian stocks it was 560 million euros (+6.05 percent) and for Lithuanian stocks 755 million euros (-3.3 percent).
Shares up strongly in Tallinn
Key shares rose in thin trading on the Tallinn Stock Exchange in the outgoing week. The TALSE stock index gained 1.75 percent to close at 135.64 on Friday. Trigon Securities broker Kaur Elviste said the week on the stock exchange was very unstable. "The investors' moods were rather changeful this week," he said, adding, "low-liquidity trading dominated." "The last two weeks have been unstable and causing alarm," warned Elviste. "When we get over the liquidity gap, the investors will start regaining confidence and return to the market."
Over the week, Hansapank climbed 2.22 percent to 126.50 kroons ($7.11). Eesti Telekom moved up 2.72 percent and ended at 94.25 kroons. Norma soared 6.56 percent to close at 43.70 kroons.
Additionally, the price of EVP privatization vouchers rose to a new high of 0.62 kroons. The high prices of the vouchers are maintained both by land privatization with no pre-emptive right and a planned issue of the Compensation Fund.
In long-term prospects, the market could be positively affected by Fitch's upgrading of Estonia's credit rating, to BBB+.
The TSE weekly turnover was 112.5 million kroons. The turnover of shares in Eesti Uhispank, open to SEB's cash offer, was again the week's biggest event, with volume of 74.2 million kroons. The turnover from deals in Hansapank stock was 16.8 million kroons, while Eesti Telekom stock saw turnover of 4.2 million kroons.
Oil and gas fuel Latvian shares higher
Rocketing share prices in Ventspils Nafta oil terminal and Latvijas Gaze gas company last week boosted all Latvian stock exchange indexes. Dow Jones Riga Stock Exchange capitalization index (DJRSE) grew 6.91 percent to 134.7 over the week and the price index RICI moved up 3.79 percent to 181.28.
Latvian energy stocks shot upwards in solid trading. Investments in Latvian stocks which are included in the Baltic List have already yielded a return of more than 50 percent since the beginning of the year.
Latvijas Unibanka became the absolute leader by turnover in Latvia at a total of 3.42 million lats ($5.56 mln) worth of shares traded hands. The price quoted for Latvijas Unibanka's shares reached 1.90 lats, and are now trading at the purchase price offered by Swedish bank SEB. Against the euro's strength, however, Latvijas Unibanka's shares slipped 2.21 percent to 3.49 euros.
To date it still cannot be ruled out that shares in Latvijas Unibanka are being bought by High Bridge Service (HBS), another large shareholder in the Latvian bank. HBS announced earlier that by mid-October it will consider the possibility of making a cash offer for Latvijas Unibanka's shares at a price above 2.0 lats per share. Evidently, a significant part of the bank's current shareholders will keep their shares until HBS makes up its mind, and this is not likely to happen before October 18.
Nevertheless, the current stock exchange trading interest in Latvijas Unibanka's shares was sufficient to push upwards the prices for shares in Ventspils Nafta and Latvijas Gaze as well. In lats, Ventspils Nafta's shares rocketed up 22.8 percent to 0.86 lats. Most experts are certain that the oil terminal's shares are being bought by one of its current shareholders seeking to increase his influence ahead of the coming shareholder meeting. Latvijas Gaze's shares meanwhile gained 6.6 percent to 3.22 lats.
The weekly stock exchange turnover reached 3.88 million lats. The Latvian Baltic List stocks contributed 7 million euros or 97 percent of this total figure.
Swedish bank SEB closer to acquiring Vilniaus Bankas
Major indexes of the Lithuanian Stock Exchange ended the week in positive territory. Investor attention remained focused on leading blue-chips Vilniaus Bankas and Lietuvos Telekomas, as well as a few secondary stocks. The bourse's continuously tracked price index Litin-10 rose 4.08 percent to 1064.24, the blue-chip Official List index Litin firmed 0.65 percent to 440.44, and the secondary Current List index Litin-A edged up 0.81 percent to 1120.42. The prices of blue-chip Lithuanian shares priced in euros fell, however, due to the euro exchange rate gains against the litas.
Lietuvos Telekomas and Vilniaus Bankas led the market in terms of turnover. Telekomas started the week on a strong note but later came under selling pressure and gave up most of the gains. The stock ended the week 0.4 percent higher at 2.21 litas ($0.55) amid 1.5 million litas turnover. "It is very difficult to predict Telekomas` share price movements at the moment. Turnovers are moderate, with a large number of small deals concluded, so the price goes down when there is a larger seller, and goes up when a larger buyer emerges," Suprema broker Arvydas Jacikevicius said.
Vilniaus Bankas ended the week 0.43 percent higher at 39.85 litas on 16.2 million litas turnover. The Lithuanian Competition Council on Thursday, September 28, approved Swedish bank SEB's intention to acquire up to 100 percent of shares in Vilniaus Bankas. Market reaction to the news was muted, however, because investors had little doubt that SEB was going to secure all the approvals it needed. The market now is waiting for the Swedish bank to formally launch the cash offer, brokers said.
Elsewhere on the Official List, cheese maker Rokiskio Suris was off 0.19 percent at 20.80 litas amid 66,300 litas turnover. Refrigerator producer Snaige surged 20.0 percent to 24.0 litas in light trading, while other Official List stocks were largely neglected during the week. LISCO and electronic component maker Vilniaus Vingis led the way on the Current List. LISCO charged ahead by 17.06 percent to 1.99 litas amid 253,300 litas turnover on the news that negotiations on the shipper's privatization were nearing completion.
Vilniaus Vingis soared 18.12 percent to 3.39 litas on 221,400 litas turnover. "The company is really worth attention from investors. It has boosted sales, profits and market share. Several serious buyers have turned their eyes towards the stock already," said Martynas Kulvinskas, head of the Securities Trading Unit at agricultural bank Zemes Ukio Bankas. Some 9.86 percent of the stock capital in acetate thread producer Dirbtinis Pluostas was sold for a total of 40.90 million litas via two block deals on Friday.
Because of these large deals, the week's overall equity turnover on the bourse came to 99.7 million litas.
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