Baltic index jumps amid new SEB's offer

  • 2000-11-02
The Baltic index of 15 blue chips listed on Riga, Vilnius and Tallinn bourses last week grew 4.44 percent to 130.1 points.

Its growth was due, first of all, to the announcement by Sweden's Skandinaviska Enskilda Banken to raise the buy-out price for Latvijas Unibanka by 7.8 percent and for Lithuania's Vilniaus Bankas by 25 percent.

The move leaves almost no doubts that SEB will succeed in acquiring full control over the three Baltic banks - Eesti Uhispank, Latvijas Unibanka and Vilniaus Bankas - and remove them from bourse lists.

For the Baltic List, the exclusion of the three banks would mean reduction of capitalization between 15 percent and 20 percent to 2.6 million euros, down from 3.2 million euros.

In terms of turnover, Latvia may face the gravest consequences from the removal of the bank's stock from the bourse as, without Unibanka, trading on the Riga Stock Exchange may lose any sense.

Last week Lithuania gave the biggest contribution to the Baltic index's growth where the local index shot up 5.5 percent to a new record high at 128.98 points on a sharp rise by Vilniaus Bankas and despite falling Kalnapilis and Lietuvos Telekomas stocks.

The growth posted by Vilniaus Bankas, however, was insufficient to increase the local stock indexes as the official list index LITIN fell 3.91 percent over the week closing at 418.93 points and the price index LITIN-10 lost 2.95 percent to 1,012.21 points.

In Estonia all more or less liquid shares posted gains over the week, pushing up the Estonian composite index of Baltic List stocks by 5.12 percent to 113.23 points while the official Estonian bourse index TALSE grew 3.46 percent to 141.45 points.

In Latvia growing stocks of Latvijas Unibanka and Latvijas Gaze pulled the local Baltic index up by 2.6 percent to 161.01 points. The Riga bourse's capitalization index DJRSE grew 2.14 percent to 136.21 points.

The Baltic List's weekly turnover was 8.82 million euros, from this Estonian stocks accounted for 70 percent or 6.16 million euros.

Lithuanian stocks accounted for 16 percent of the Baltic List's turnover with 1.45 million euros, and Latvian stocks 14 percent or 1.18 million euros.

In Estonia, Baltic List's stocks made up 83 percent of the Tallinn Stock Exchange weekly stock turnover, while in Latvia and Lithuania the figures were 55 percent and 35 percent, respectively.

Capitalization of the Baltic List's stocks grew 2.25 percent over the week to 3.18 billion euros on the gains by banking stocks, Eesti Telekom and Latvijas Gaze.

Capitalization of Estonian stocks of the Baltic List on October 27 was over 1.81 billion euros (up 3.7 percent), Latvian stocks 577 million euros (up 2.6 percent) and Lithuanian 773 million euros (down 0.9 percent).

Latvia: Intrigue around Unibanka ends

Last week the last of the intrigues around competing offers for Latvijas Unibanka stocks ended.

Most of the Riga bourse indexes grew in the wake of SEB's announcement about the increase of the purchase price for Unibanka stocks.

Riga Stock Exchange capitalization index DJRSE grew 2.14 percent over the week to 136.26 points while the composite index of Latvian stocks of the Baltic List gained 2.6 percent to a new record high at 161.01 points.

The price index RICI meanwhile dropped 0.22 percent to 176.61 points on losses posted by Ventspils Nafta and Balta.

After SEB announced its intention to raise the offer for Unibanka stocks from 1.90 lats per share to 2.05 lats per share and, investment companies Trigon Capital and High Bridge Services agreed to accept the offer, it became clear that SEB will reach its goal to acquire full control over Unibanka.

The bank's stocks rose 7.4 percent over the week, up from 1.89 lats to 2.03 lats per share on a turnover of 265,800 lats. In euro terms the growth was 8.63 percent to 3.916 euros on a turnover of 507,040 euros.

At the same time, numerous Latvian market makers made it clear they were disappointed in SEB's latest initiative as SEB had earlier pledged it would not increase the offer price before the term of its public offering expires.

By breaking this promise SEB provided a reason for Latvian investors and brokers to speak about unearned profits or even losses due to a lack of consequence in SEB's actions.

While breaking the promise SEB did not break any of the Latvian laws, though this points to deficiencies in Latvia's legislation in the area of protection of the small shareholder rather than the law-obeying nature of the Scandinavian bank.

Apart from Unibanka the investor interest also, like previously, was pointed at Latvijas Gaze as the gas company's stocks jumped 0.8 percent over the week to 3.55 lats (in euro terms the growth was 2 percent to 6.84 euros) on a turnover of 251,100 lats while in euros the turnover was 481,600 lats.

At this stage the gas company's stocks, most likely, have reached their ceiling as some of the company's big shareholders last week said they regard even the price set by the Latvian Privatization Agency at 3.23 lats per share for the sale of 2 percent of Latvijas Gaze's state-owned stocks at a special auction on the Riga bourse as too high.

Moreover, taking into account that most of the small shareholders already have sold their shares in the gas company, it is expected that after the sale of the state-owned shares in Latvijas Gaze the trading of the stock on the bourse may subside to near-zero level.

Ventspils Nafta fell 2.7 percent over the week to 0.72 lats (in euro terms 1.6 percent to 1.389 euros) while Balta lost 1.56 percent to 3.15 lats (in euros fell 0.44 percent to 6.076 euros).

From Latvian stocks outside the Baltic List, Grindex pharmaceuticals maker was noteworthy with an 8.7 percent gain to 0.5 lats on a turnover of 425,000 lats.

The stock turnover on the Riga bourse reached 1.15 million lats during the week, with Baltic List's stocks making up 55 percent of the bourse's stock turnover during the week or 1.2 million euros.

Estonia: Hansapank catches big interest

Most shares moved higher on the Tallinn Stock Exchange during the outgoing week, with Hansapank shares accounting for most of the trade.

The TALSE index gained 3.46 percent during the week to finish at 141.56 on Friday.

"Strong interest in Hansapank's stock set the tone, which is why the share crossed the 130 kroon limit," Trigon Securities trader Kristel Kivinurm said. "Thus the falling trend of the share has been reversed."

Hansapank put on 4.46 percent during the week to close at 134.75 kroons (8.612 euros) on Friday.

With a turnover of 65.3 million kroons, Hansapank was the most traded issue on the stock exchange during the week.

There has also been strong interest toward Eesti Telekom which was supported by the strong U.S. dollar and the rise of central European telecoms.

Eesti Telekom finished the week 2.63 percent higher at 97.50 kroons on a turnover of 11.5 million kroons.

Norma, which on Friday released nine-month results surpassing analysts' expectations, was the second in terms of turnover on the secondary list with 17.8 million kroons.

Its price went up 6.86 percent to close at 46.70 kroons on Friday.

Eesti Uhispank stayed unchanged at 37.90 kroons over the week as analysts said nine-month net profit of 51.7 million kroons clearly remained below the market's expectations.

"One can only imagine what would have happened if the offer for Uhispank [shares] hadn't been made at that level," Paavo Pold, analyst with Suprema, said. "Apparently such results would have had a very strong impact on the price of the share."

Suprema chief analyst Veikko Maripuu added that the figures indicate the bank has not been able to efficiently turn itself around and meet the expectations.

On the secondary list, Viisnurk shot up 18.52 percent to 44.80 on a turnover of 2.0 million kroons.

"The share went up vigorously thanks to very good economic results," Kivinurm said.

The total TSE turnover concluded in the five days was 117.4 million kroons. The Baltic List stocks accounted for 6.2 million euros, or 83 percent.

Lithuania: Bourse full of surprises

The Lithuanian stock exchange was full of surprises this week as the price of Lietuvos Telekomas stock, which suddenly started to fall on Monday, influenced many investors, while the decision of SEB to buy all the outstanding shares of Vilniaus Bankas increased their value by 10 litas.

Stock indixes had been falling since Monday, however, on Friday when the trading in Vilniaus Bankas was resumed, part of the losses was compensated. The bourse's benchmark price index Litin-10 fell 2.95 percent to 1,012.21 percent, the blue-chip Official List index slid 3.91 percent to 418.83 points, and the secondary Current List index Litin-A skidded down 1.91 percent to 1098.48 points.

The local euro index of the Lithuanian Baltic List stocks moved in opposite direction, however, jumping 5.58 percent to new record-high of 128.98 points.

Lietuvos Telekomas was the most active trading stock posting a turnover of 3.88 million litas (1.15 million euros). However, the price started falling on Monday and continued till it reached 1.89 litas a share on Friday, 13.76 percent (in euros -10.82 percent) down over the week.

Brokers said that one big investor or several of them decided to sell a large number of shares. The rumors were going round on the bourse about the reasons of this sell-off, however, still not much is known about the investor. Other market participants, however, buy shares willingly, because the price is rather low.

The trading in Vilniaus Bankas became more active just on Friday after SEB increased its offer for all outstanding shares in Vilniaus Bankas from 40 litas a share to 50 litas a share only on Tuesday evening.

Vilniaus Bankas rocketed up 24.92 percent to 49.5 litas (in euros - the share posted 27.77 percent growth to 15.031 euros) posting a turnover of 838,00 litas.

Cheese maker Rokiskio Suris held steady at 20.80 litas (in euros - up 2.39 percent to 6.316 euros) amid moderate 140,100 litas turnover, though active trading in this stock was seen only on Monday.

Brewer Kalnapilis crashed 14.29 percent to 3.00 litas (in euros - down 12.23 percent to 0.911 euros) on tiny 1,200 litas turnover, whereas, refrigerator producer Snaige and knitwear producer Utenos Trikotazas saw no trade this week.

The falling price of Lietuvos Telekomas sent stocks on the Current (Second) List down with the exception of electric component maker Vingis and TV-tube maker Ekranas. Vingis grew 13.51 percent to 4.20 litas on 212,900 litas turnover, and Ekranas soared 10.57 percent to 4.43 litas amid 142,900 litas turnover.

Brokers say the active trading in these securities is due to good performance of the companies.

The intentions of the new government to analyze (and possibly to suspend) the privatization of the Lithuanian Shipping Company sent its price falling. LISCO slumped 25.21 percent to 1.75 litas.

Overall equity turnover on the bourse reached 13.55 million litas with 1.45 million euros, 35 percent of the total, generated in trading with the Baltic List stocks.