Stock markets: weekly report (September 1 -Ê7)

  • 1998-09-10
Estonia: Investor activity subsides

Last week Hansapank's shares remained the focus of attention, but there was no longer aggresive buying.

The TALSE Index fell 3.89 percent over the week to close at 144.91.

Hansapank broker Romet Tepper said that if previous mergers were greeted with enthusiasm, the announcement of Forekspank and Estonian Investment Bank's planned merger wasn't.

The steep fall of Norma's shares also caught brokers attention, which was attributed to foreign investors fleeing from companies with ties to Russia.

"Maybe speculators like Norma's and Forekspank's shares, but they have a steady falling tendency," said Tepper.

Norma's shares showed the largest fall on the main list last week, crashing 19 percent to 20 kroons ($1.38).

In addition to the merger announcement, the news that Forekspank's latest stock emmission wasn't fully placed also hurt its share price, which fell 6 percent over the week to 32.56 kroons on Friday.

"Those who held onto privatization vouchers found a major buyer last week," said Tepper. Most likely their order has been fulfilled and the price will drop.

Vouchers soared 17 percent to 0.28 kroons.

Tepper noted that interest in Hansapank shares remained strong, but not aggessive as in the previous week. Hansapank's share price was off 0.40 percent to 87.64 kroons.

Uhispank's share price slipped two percent to 30 kroons. Uhispank's shares are trading at a yearly low on the Helsinki exchange.

Shares in the Pro Kapital real estate development firm appeared on the additional list last week. More that 1.25 million kroons in deals were conducted at the price level of 50.85 kroons.

Brokers expect this weeks trading to be quiet. Investors will be following events in Russia, particularly the confirmation of a prime minister and any hints of future financial policy.

The announcement that the economy grew at 5.5 percent in the second quarter didn't affect share prices. According to brokers, investors have already expected a slower pace of economic growth.

"It is completely logical that economic growth slowed under severe regulation," Tepper noted. "Falling share prices also played a role in that, reducing the weight of the financial sector."

"The positive side is that a recession hasn't begun," he said. "The third quarter figure will be very important."

Brokers expect growth in the third quarter to be about 2-3 percent over 1997.

Latvia: Trading in bank shares brisk

Last week the Riga Stock Exchange was rocked not only by bad news at home and abroad but by attempts by several investors to use the crisis to obtain significant stakes in banks.

The DJRSE index skidded down 6.4 percent to 124.50 points.

Turnover totaled 1.1 million lats, with about 80 percent in Unibanka shares. Rigas Komercbanka accounted for another 10 percent and Balta and Daugvapils Drive Chain Factory 2 percent each. Shares in Kaija and Riga Transport Fleet each accounted for 1 percent.

Shares in Kaija, Komercbanka, Daugavpils PKR and Balta dropped by 10-40 percent as investors were tryingÊto get out of companies tied to the Russian market.

On the other hand the sharp price rises in Rezeknes Canned Milk Factory, Staburadze, Rigas Transport Fleet and Riga Ship Yard by 10-35 percent can't be taken too seriously because of small turnovers.

Shares in Unibanka finished the week up 1.16 percent. The bank's share price jumped sharply at the beginning of the week and slid down thereafter following the news of a major theft.

Despite the confidence of Unibanka's management that Lloyd's of London will fully compensate the bank's losses, several experts are more doubtful following police comments about the bank's poor security. Even if Lloyd's fully compensates Unibanka for the theft it will be unlikely to find insurance at low rates, which will further affect the bank's profits.

At the same time it should be noted that even large packages of the bank's shares found buyers last week. Several Latvian analysts compare today's situation with Estonia, noting that Unibanka's shareholders may change as Hansapank's recently changed.

Lithuania: Share prices stabilize at end of week

After an extended fall, share prices on the Lithuanian National Stock Exchange stabilized at the end of last week, with some of the more liquid shares posting strong rebounds on Thursday.

Brokers said the stabilization was expected given the gradual rise in demand and good news on neighboring markets.

"It appears that the panic on the market is subsiding," Suprema broker Arvydas Jacikevicius told BNS. He said share prices have fallen so far that an upward correction was due.

Shares on the Official list began the rise led by Vilniaus bankas, the only stock to end the week on the positive side, up 4.88 percent at 21.27 litas ($34).

Shares in Rokiskio Suris were the worst hit on the Official list, losing almost a third of their value to end the week at 14.54 litas.

Despite the burst upwards on Thursday the Litin index ended the week down 13.05 percent at 460.37 points. The Litin A index was off 2.66 percent for the week at 1332.44 points.

The most liquid shares on the Current list continued to fall but at a somewhat slower rate. Shares in LISCO lost 3.72 percent last week compared to 14 percent the previous week.

Lietuvos Energija's shares continued to hold at five litas under high demand.

After Akmenes Cementas forcasted record profits its long ignored shares were suddlenly rediscovered by investors and rose by 6.25 percent to 3.04 litas.

Brokers believe share prices should remain fairly stable at the beginning of this week.

Russia: stocks inch into positive territory

Russia's ghostly stock market gained a dab of colour by the weekend, with blue chips putting on much needed weight, but equities were still down some 5 percent on the week.

Russian Trading System (RTS) index closed on September 4 at 63.13, down 5.45 percent for the week. However, with volumes still under $3 million , traders said many values were still scarcely indicative.

Leading blue chip Unified Energy Systems (UES) closed at 0.032 dollars, still less than one tenth of its value six months ago. LUKoil closed at $3.70.

Equities have lost more than 80 percent of their value this year due to a combination of factors which would humble the most bullish of markets: a currency crisis, a political power struggle, and an ailing president fending off calls for his resignation.

The ruble shed more than 30 percent of its value during last week.

At the end of Sept 4, the currency had fallen to a range of 20.7 to 21.5 rubles to the dollar. Operators said the new plunge was due particularly to the announcement of an increase soon in the money supply, aimed at payng arrears in retirement benefits and salaries. The money creation is expected to depress the ruble further and is leading banks to buy dollars.

The ruble has lost 62.9 percent of its value in less than three weeks, since the devaluation announced on August 17.

(Compiled from BNS, brokerage companies reports.)