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Although Latvijas Gaze rose sharply, a big part of the Latvian shares' growth was secured by a weakening of the euro exchange rate against the Latvian lat. Except for Latvijas Gaze, the price for other stocks, in lats, either remained unchanged, as with Balta, or fell, as was the case with Latvijas Unibanka and Ventspils Nafta.
In Lithuania the fall in the euro rate was even more evident, although prices were relatively stable in terms of litas. The 7 percent gain posted by Lietuvos Telekomas would have pushed the index up even higher if not for the falling price of Utenos Trikotazas.
The Baltic List stocks generated a turnover of 6.89 million euros ($5.83 million), of this Estonian stocks accounted for 72.5 percent, or 5 million euros. Latvian stocks accounted for 18.6 percent of the list's total turnover, or 1.26 million euros, and Lithuanian 9.1 percent, or 0.626 million euros. In Estonia the Baltic List stocks made up 98 percent of the national bourse turnover, whereas in Latvia and Lithuania the indicators were 85 percent and 45 percent, respectively.
Baltic List capitalization last week grew 4.1 percent to 3.11 billion euros on increasing prices of telecom companies and Latvijas Gaze. Estonian stocks made up 1.75 billion euros of the list's total capitalization on Oct. 20, Latvian 577 million euros and Lithuanian 780 million euros.
Estonia: Shares strong in Tallinn
Share prices strengthened on the Tallinn Stock Exchange in the outgoing week. The TALSE stock index gained 3.10 percent to close at 136.83 Friday, on a total volume of 94.3 million kroons ($5.1 million). Substantial gains were posted by blue-chip stocks including Eesti Telekom, Hansapank and Norma. Hansapank Markets broker Lauri Lind said the past week brought as a positive surprise Hansapank's nine-month results. Hansapank posted a consolidated net profit of 933.9 million kroons, according to un-audited figures. "At the same time, investors interpreted the proposal to increase the bid for shares in Lietuvos Taupomasis Bankas as news of a negative coloring," the broker added, referring to Hansapank's offer for the Lithuanian bank. After Hansapank had upped its offer, the Lithuanian State Property Fund asked it on Friday to increase its offer even further. Hansapank has until the end of the next week to make a new offer. Hansapank stock was the most traded during the week, generating 47.8 million kroons of turnover. The price of the share rose 1.98 percent to 129 kroons.
The steep recovery in the world stock markets in the second half of the week also had a positive effect. "More buyers emerged on the market and interest in the more liquid shares increased," was Lauri Lind's comment.
Investors are now looking forward to positive financial results from Telekom and Norma. Car safety belt maker Norma rose 3.31 percent during the week, ending at 43.70 kroons on 12.5 million kroons turnover. Trading volume in Eesti Telekom stock totaled 8.37 million kroons, with the share price soaring 5.56 percent to 95 kroons.
Latvia: Latvijas Gaze pulls indexes higher
A rising share price in Latvijas Gaze stock propelled the Latvian trading floor higher last week, with all Latvian bourse indexes posting gains. The capitalization index DJRSE was up by 1.18 percent to 133.4 while the price index RICI jumped 0.12 percent to 177.
A 5 percent loss by Riga's shipyard operator Rigas Kugubuvetava weighed on all local indexes, although interest in Latvijas Gaze outweighed all negative trends, as the stock shot up 8.3 percent during the week, closing at 3.52 lats ($5.64). The stock reached a record high of 3.64 lats in the middle of the week. The strong interest in the stock is explained by the expected auction of 2 percent of the company's shares, currently owned by the state. The present shareholders are trying to increase their influence in the company by purchasing additional shares on the bourse, as the block to be sold through the auction appeared significantly smaller than expected.
The anticipated growth in trading activity with Latvijas Unibanka did not take place last week as the shareholders still have not received clear guarantees from High Bridge Services (HBS), holder of a 9.9 percent stake in Unibanka, as to whether it will indeed buy the bank's stock for a price higher than 1.9 lats per share, the price offered for Unibanka shares by Sweden's Skandinaviska Enskilda Banken (SEB). Unibanka shares fell 1.05 percent over the week to 1.89 lats while in euro terms grew 1.27 percent to 3.60 euros. The intrigue surrounding Unibanka will most likely continue until the second week of November - when the deadline for SEB's offer to buy Unibanka stock, at 1.9 lats per share, expires. But HBS hardly could be blamed for the delay, as this is due mainly to deficiencies in Latvia's legislation in the area of protection of rights of the small shareholders, which so far has not allowed HBS to settle formalities for a competing offer for the purchase of Unibanka shares.
Other news on the market shows a 5.1 percent fall in Ventspils Nafta to 0.74 lats. The start of construction of oil reservoirs for Russia's project in Primorsk, as well as the possible decision by the Russian government to sell to private shareholders a part of the state-owned Transneft company to raise additional funds for the construction of a Primorsk port, came as bad news for Ventspils Nafta. Moreover, the Lithuanian Constitutional Court's ruling that privatization of oil refinery Mazeikiu Nafta by the United States company Williams had been illegal may strengthen the position of Russian oil company LUKoil in Lithuania, another negative for Ventspils.
Share turnover on the Riga bourse reached 778,500 lats over the week.
Lithuania: Calm trading prevails
Level-headed trading prevailed on the Lithuanian stock exchange for most of the week, led by blue-chip Lietuvos Telekomas. The mellow mood on the market was interrupted only by the increased trading in LISCO shares in the wake of the news about the signing of the Lithuanian Shipping Company (LISCO) sales deal, announced at the end of the week. The bourse's benchmark index Litin-10 climbed 3.00 percent to 1043.02, the blue-chip Official List index LITIN jumped 3.67 percent to 435.89, and the secondary Current List index Litin-A rose 2.62 percent to 1119.89.
Lietuvos Telekomas soared 5.6 percent to 2.17 litas ($0.54) on 1.92 million litas turnover. According to brokers, more active trade in Lietuvos Telekomas was slowed by a considerable spread between the sale and purchase prices. However, it seems that the current price at 2.17 litas has satisfied both buyers and sellers.
Trading in Vilniaus Bankas shares was less active. Vilniaus Bankas edged down 0.11 percent to 39.67 litas on moderate 183,700 litas turnover. According to Finasta broker Aurelijus Rimkus, the current price works out to a 10-12 percent annual return, at which investors can gain by buying shares now and selling them to Skandinaviska Enskilda Banken (SEB), which has offered to buy all outstanding shares in the Lithuanian bank for 40.00 litas a share. The broker believes that previous estimated trading gains, based on SEB's purchase price of 40.00 litas per share, were based on speculators' expectations that small shareholders, holding a combined stake of around 26 percent in Vilniaus Bankas, would aggressively oppose SEB's offer. However, these assumptions may not prove true.
Cheese maker Rokiskio Suris held steady at 20.80 litas on weak 33,000 litas turnover, with other stocks on the Official List at even less trading activity. Outside the major list, LISCO shipping company's stock was the best performer, rocketing up 20.00 percent to 2.34 litas on 365,300 litas turnover. Some 66,100 litas worth of shares were sold through block deals. According to Martynas Kulvinskas, head of the securities department of Agricultural Bank, LISCO shares might reach 2.5 litas a share, and if the trading remains active, it can go up even more.
Overall equity turnover on the bourse reached 4.67 million litas.