Stock markets: weekly report (November 27 - December 4)

  • 1998-12-10

Uhispank dominates apathetic trading

Deals with shares in two banks, Uhispank and Hansapank, accounted for most of the turnover at an otherwise apathetic stock exchange in the outgoing week.

The TALSE index slipped 1.74 percent to 101.94 during the week.

"The market is quiet because most investors and local speculators have adopted a let's-wait-and-see attitude," Talinvest Suprema securities specialist Sten Sumberg told the BNS agency.

He said investors are waiting to see the impact of the Russian crisis on Estonia's macroeconomic situation.

The market may yet pick up next week as banks' results for November are expected then, Sumberg said.

"The market may liven up in a couple of months when Estonian Telekom shares will come on sale, provided the country's macroeconomic situation has not deteriorated very much," he said.

The security firm ESS's pulling out of the stock exchange may have given a negative signal to foreign portfolio investors who are not very well informed about the market here, Sumberg noted.

ESS plunged 14.38 percent to 64 kroons ($4.70) during the week.

The biggest change, however, was recorded for the Rakvere Lihakombinaat meat packer, which ended the week 30.77 percent up from last week at 3.40 kroons.


Unibanka no longer dominates trading

For the first time in a considerable period Unibanka's domination of trading on the Riga Stock Exchange was shaken as investors also actively traded shares in Riga Transport Fleet and Ventspils Nafta.

All three companies accounted for about 25 percent of turnover apiece, which totaled 520,000 lats ($896,550). Trading in confectioner Staburadze, Valmiera Fiberglass and Riga Shipyard accounted for 20 percent of trading.

The lack of any desire in buyers or sellers to force a considerable correction in Unibanka's stock led to a drop in speculative interest in the bank's shares and slightly increased more interest in other companies.

The stability of Unibanka's share price led to a divergence between the RSE's two indices - the DJRSE index and RICI index. The RICI posted a gain of 4.56 percent for the week, while the DJRSE gained only 1.53 percent because Unibanka dominated the capitalization weighted index.

Developments at the RSE this week depend mostly on outside factors. Some market players hope the drop in interest rates in Europe might spark more interest in shares, including in the Baltics. However, there has not been too much more interest in stocks in Western Europe so far.

If speculators are able to move Unibanka's share price one way or the other then the bank will likely dominate trading on the RSE again, but otherwise other shares will attract investors' interest.


Prices of liquid shares slump

Last week prices of the most liquid shares slid down on very thin trading.

On the morning of November 30 share prices were still moving upward, with the Litin index climbing to 535 points, its highest point in three months. By midday share prices began to fall, however, and never looked back the rest of the week. The Litin dropped 8.21 percent for the week to 490.02 points. The LitinA was off 1.95 percent to 1152.22 points.

The main reason for the market's fall was a drop in Vilnius Bank's share price by 26.98 litas ($6.75).

"As long as Vilnius Bank doesn't go up, it is hard to see a rise in the market," Hansabank Markets broker Aivaras Abromavicius told BNS.

Vilnius Bank's shares were the most heavily traded, with 4.925 million litas in turnover.

Trading in Hermis Bank's shares, the other bank on the official list, was not quite as active at 1.794 million litas, with its share price falling 8.04 percent to 68.39 litas.

Shares in Rokiskio Suris fell 2.69 percent to 20.23 litas, with turnover totaling 971,000 litas.

On the current list, trading in Ukio Bank's shares was active, with its share price growing for the second week in a row. Brokers describe the rush for Ukio Bank shares a true phenomenon. Investors do not believe in the share, but buy it on rumors of a strategic investor, further driving up the share price.

Over the week the bank's share price soared 31.28 percent to 3.19 litas, with 1.324 million litas in turnover.

The bourse's turnover totaled 19.757 million litas.