Stock markets: weekly report (December 4 - 11)

Estonia:

Share prices fall throughout week

Share prices fell throughout the whole week on the Tallinn Stock Exchange, and the TALSE index dropped under 100 points as a result.

Over the week, TALSE lost 7.48 percent of its value and closed at 94.31 points on Friday.

Hansapank broker Mart Meerits said that one of the reasons for the fall of the market is talk about the kroon's instability, and therefore many investors have given up plans of investing in shares in favor of more liquid instruments, such as different promissory notes.

Another reason for the fall of prices is that most brokerage companies do not hold their positions and proceed from the rule of thumb that the most important thing is to trade.

"As the market believes that there will be trading on a lower level, the price levels are lowered," the broker said. In case of Hansapank, Meerits said, the psychological barrier is at 50 kroons ($3.75).

The fall in Hansapank stock, which was traded rather actively in the past few days, is due to a number investors who, for fear of a general fall, have sold off their last positions, Meerits said.

Meerits said that the likelihood that the market will continue a downward trend next week is relatively high. The key event next week, he said, will be the publication of banks' results for November.

"The market has adopted the clear vision that the banks' results for November cannot be better than they were in October," Meerits said. "Probably the banks are going to report some of the worst results in their history."

The key words for next year are loan default and, to avoid them, decisions to sell may be taken before the end of the year. Over the week, Hansapank stock was the biggest loser on the main list, falling a total of 12 percent to 50.50 kroons per share. The price of shares in Uhispank fell by 11 percent to 21.80 kroons. The only share on the main list to gain was that of Tallinna Kaubamaja; it rose by 5.62 percent to 16.90 kroons. Of the stock market's total turnover during the week, deals with Uhispank accounted for 39 percent or 13.7 million kroons. Hansapank followed with a 12.1 million kroon turnover.

EVP privatization vouchers changed hands for a total of 3 million kroons. Also Pro Kapital's and Norma's stock achieved at least 1 million kroons in turnover this week.

Latvia:

Unibanka's top position not regained

Last week Unibanka failed to return to its traditional position at the top of trading on the Riga Stock Exchange. Neither Unibanka's nor Ventspils Oil's shares attracted the attention of speculators, which explains their stable prices. Speculators trained their sights on the more or less liquid shares on the official and current lists, driving most of their prices up considerably.

The RICI index's price rise of 10.5 percent, from 175.78 on Dec. 11 to 194.16 on Dec. 14, blew away the DJRSE's rise of 2.5 percent. The difference is due to the drop in Unibanka's share price by 3 percent and Rigas Komercbanka's by 13 percent, which reflects the great weight they have in the DJRSE's calculations.

The uncontested leader in terms of rises in price and turnover was Valmiera Fiberglass. The factory's share price rocketed up 33.33 percent with more than 150,000 lats ($263,160) in turnover.

Specialists attributed the price rise to speculation the company's 1998 results could turn out to be considerably better than previously forecasted. Another plus is that the factory has a steady market little affected by the Russian crisis. Shares in Balta, Daugvapils Drive Chain Factory, Riga Shipyard, Riga Transport Fleet and Staburadze were also actively traded, each accounting for between 5 percent to 11 percent of total turnover and posting gains of 13 percent to 33 percent.

The pre-Christmas period on the RSE may not be as sleepy as in previous years. With its significantly improved financial situation, shares in Unibanka may rise.

The positive attitude of speculators indicates that several companies, in particular Staburadze confectionery and Ogre textile factory, may end up finishing the year in better shape than the pessimistic forecasts made this fall. Latvia's macroeconomic indicators leave plenty of room for improvement, however. Particularly worrisome is the growth in unemployment to an annual rate of 8.8 percent. This fall the official number of unemployed has soared by 20 percent.

On the other hand it must be noted that the recent rises in the share prices of several companies do not have any basis on underlying fundamentals and corrections cannot be ruled out.

Lithuania: Trading goes on with intermittent success

Last week trading continued on the Lithuanian National Stock Exchange with intermittent success with investors traditionally focusing on the same companies from the official list. Early this week trading was slow but the prices finally got more stable after the decline registered in the previous trading sessions.

Trading became more active towards the end of the week after Hermis bank stated on Wednesday its intention to complete negotiations with a strategic investors this year. However, Gintaras Lesinskas, Alterna Invest Brokerage's market analysis unit head, said that Hermis' shares had not been bought as recklessly as shares in Vilniaus Bankas when it released a similar statement. More active trading at midweek resulted in Hermis outranking Vilniaus Bankas in terms of turnover. During the week close to 8.48 million litas ($2.12 million) worth of Hermis Bank's shares were sold and their price grew by 7.62 percent to 73.60 litas per share. Vilniaus Bankas' shares edged up by 0.96 percent during the week to 27.24 litas. The bank's shares weekly turnover totaled 1.25 million litas.

Shares of Rokiskio Suris were in great demand as usual and increased by 4.84 percent to 21.21 litas per share with a turnover of 575,000 litas.

Shares of the other companies on the current list were nearly stagnant as usual and came to complete stop Wednesday with the disappearance of a mysterious buyer that previously had showed interest in Ukio Bankas' shares. Kestutis Kvainauskas, a broker at VB Vilfima, told the BNS agency that the privatization process could give some impetus to the trading of shares on the current list, but it will happen only next year.

During the week the Litin index grew by 3.27 percent to 506.56 points while the LitinA index increased by 3.87 percent to 1198.55 points. The total turnover of the stock exchange was 25.99 million litas with share trading deals accounting for 60 percent of the amount.