At the end of last week the Riga Stock Exchange dropped sharply after Latvian Unibanka announced 5 million lats ($8.6 million) in losses for the first 10 months. Unibanka's share price and the DJRSE index dropped 5.5 percent.
Unibanka can be considered to have gotten off relatively lightly for such large losses. No doubt the market had already expected them. At the same time it is also clear that Unibanka's management decided to cover themselves by creating huge provisions and the actual losses may be considerably less.
Unibanka's share price might continue to decline, however. Foreign investors may not have had time to react to the news on Friday Nov. 13 and may move to sell their shares this week. The bank has created reserves for loans going bad due to the Russian crisis, but as they do go sour over the next few months it will create lots of bad news to further rattle investors.
It also can't be excluded that the announcement of such a large loss at one of the Baltic's biggest banks might trigger a wider negative reaction against the market, which in the worst case could affect the stability of the lat and lower the country's credit rating.
Last week 95 percent of the turnover on the RSE was in shares in Unibanka (71.4 percent), Ventspils Nafta (10.3 percent), Riga Transport Fleet (10 percent) and Valmiera Fiberglass (2.4 percent). Other shares were not liquid.
As many experts had forecast, shares in Olainfarm dropped (39 percent to 0.22 lats) to near the level of the other pharmaceuticals manufacturer, Grindex (0.17 lats, down 19 percent).
Both companies remain in a difficult position. It looks increasingly unlikely that Olainfarm will get serious financial help from the government and Grindex continues to be beset by problems in its Tallinn subsidiary, which had part of its stock attached by Hansapank to secure an unpaid loan.
Estonia: Uhispank traded most briskly on Tallinn bourse
Uhispank shares were the most-traded on the Tallinn bourse last week, enjoying a solid gain.
The TALSE index ended the week at 102.48 points, up by 4.05 percent from last week. All main-list shares closed higher as well.
Forekspank broker Peeter Koppel said the week clearly showed investors' continued lack of interest.
Trading was extremely sluggish at the beginning of the week.
It seemed as if speculators took time off, going into action again on Wednesday when the exchange system's turnover again surpassed 5 million kroons ($370,000), the broker said.
Although the week's aggregate turnover shrank, the daily turnover on Friday amounted to 11 million kroons, half of which came from deals with Uhispank.
"In Uhispank's case, a speculative buying interest that keeps the price from slipping is continuously felt," Koppel said. The bank's stocks generated the biggest turnover of any individual share this week at 14.7 million kroons, making up almost 40 percent of the week's total.
Uhispank soared 7.53 percent during the week to end at 24 kroons.
The bank continued to be embroiled in a dispute with Huvitusfond (Compensation Fund) over forward deals.
The market leader, Hansapank, suffered from the investors' negative reaction to news of its problems with several troubled companies - the computer maker Pennu, Tallinna Farmaatsiatehas (Tallinn Pharmaceutical Factory), and the Laatsa fish processing firm.
Hansapank ended the week at an average 59,14 kroons, up by 4.97 percent from the previous week. The week will see the end of the bank's 14.7 million kroon share issue guaranteed by Swedbank.
Merko Ehitus (Merko Construction) received a boost from the announcement of its 10-month economic results, Koppel said. Although the firm's performance was as expected, it's a positive sign that it is well on the way to meeting its annual profit target, which is relatively rare in the present economic situation.
Merko soared 6.70 percent over the week to 11.25 kroons.
The construction company EMV on the supplementary list also did well, charging ahead by 5.38 percent to 16.44 kroons on a turnover of 1.8 million kroons.
"Apparently there is a buyer in the market who is prepared to buy also larger quantities at the present price level," Koppel said. "The construction sector's future in the changed economic environment is a different matter."
Lithuania: Banks and cheese dominate trading
Last week trading on the central market of the Lithuanian National Stock Exchange was sluggish, with investors showing interest only in the two banks on the official list and Rokiskio Cheese dairy.
Trading in those three companies at 3.17 million litas ($792,500) accounted for over 40 percent of share trading.
Vilniaus Bankas held on to the top position with 2.17 million litas worth of its shares changing hands. Its share price fluctuated throughout the week, ending up 2.48 percent, at 21.92 litas.
Trading in Hermis bank shares was not as active. At the beginning of the week demand dropped and the price followed. After rumors of talks with strategic investors hit the market, demand picked up and it closed the week up 1.09 percent, at 65.71 litas. Turnover totaled 641,000 litas.
Demand for shares in Rokiskio Cheese shares did not dampen and turnover totaled 359,500 litas. Its share price slid 4.43 percent to 17.04 litas.
Current list shares went practically untraded on the central market, and there were few direct deals as well.
The only major deals were in shares in Panevezio Pienas shares, which had a turnover of 2.3 million litas.
Last week the Litin index edged up 1.10 percent to 436.48 points. The Litin A index fell 22.96 percent to 1124.66 points.
Turnover of the bourse totaled 27.26 million litas, 70 percent of which was trading in T-bills.
The head of Altera Invest's market analysis department, Gintaras Lesinskas, said investors began to leave the market at the end of the week following the steadily rising share prices.
"There isn't enough good news and rumors aren't being confirmed," the analyst said. He predicted more investors could leave the market this week and share prices could begin to slip.