Baltic List weak on New Year's hangover

  • 2001-01-11
  • Boriss Epsteins
The downward correction of Baltic List stocks continued during the
first week of the new year amid extremely low turnover. The Baltic
Index of 15 blue chips listed on the Riga, Vilnius and Tallinn
bourses dropped 0.6 percent over the week to 126.54 points. Losers
outnumbered gainers eight to six on the List with Estonia's Hansapank
unchanged for the week.

Lithuania's Utenos Trikotazas plummeted 12.7 percent to 0.79 euros
($0.75) while Estonia's Pro Kapital, Latvia's Ventspils Nafta
(Ventspils Oil) and Lietuvos Telekomas fell by an average of 4
percent. The composite Lithuanian index of the Baltic List stocks was
pulled down by a 1.4 percent fall of the litas exchange rate against
the euro.

The Baltic List's capitalization fell sharply, from 3.04 billion
euros to 2.69 billion euros, due to the replacement on the list of
highly capitalized companies Eesti Uhispank and Vilniaus Bankas with
Estonia's construction company Merko Ehitus and LIthuania's
refrigerator maker Snaige, which have significantly lower

The Baltic List's weekly (four day) turnover was 3.27 million euros,
from this Estonian stocks made up 84 percent, or 2.74 million euros.
As now seems routine, Baltic List stocks made up the lion's share of
turnovers on their home bourses. In Latvia, Lithuania and Estonia the
turnovers of the Baltic List stocks made up considerably more than a
half of their respective total turnovers.

Estonia: Marching to its own drummer

The past week on the Tallinn Stock Exchange was quiet as the market
here did not follow the bumpy ride of markets elsewhere in the world.
The TALSE index finished the week 0.6 points, or 0.4 percent, higher
at 141.85. The price index of Estonian Baltic List stocks fell 0.8
percent to 115.17.

"The week got a quiet and calm start, there were no significant
changes in prices," Uhispank trader Mart Helmja told BNS. "The market
held well and probably dependency (on world markets) will be small
also in the future," she said. Hansapank Markets trader Romet Tepper
shared her view. "Foreign investors aren't particularly active,
they're rather observing what goes on in the United States," Tepper
contributed. Hansapank's shares took center stage on the Estonian
stock market, producing a turnover of nearly 24 million kroons ($1.46
million). The price was unchanged at 139 kroons. Eesti Telekom's
turnover during the week was 13 million kroons. The stock posted a
1.1 percent loss, to 85.5 kroons.

On the main list the best performer was Norma, with a rise of 4.8
percent to 49.80 kroons. Tallinna Kaubamaja finished the week 3.6
percent higher at 57 kroons. Pro Kapital Group fell 3.1 percent to
45.5 kroons. Uhispank, the second largest bank in Estonia, was
delisted starting with the new year.

Total turnover on the stock market during the week came to 56.5 million kroons.

Latvia: Trading activity down sharply

Following the New Year's Eve festivities, trading activity on the
Riga Stock Exchange (RSE) slowed significantly. Turnover for the
four- day week was just 174,000 lats ($283,800) for an average of
just 43,500 lats a day. Of this the Latvian Baltic List stocks
accounted for 75 percent with a turnover of 224,078 euros.

Stock indexes and individual share prices in local currency did not
see significant changes over the week, as the capitalization index
DJRSE rose 0.6 percent to 140.09, and the price index RICI, which has
a broader company base, dropped 0.18 percent to 173.79. The composite
Latvian index of the four Latvian Baltic List stocks gained 0.4
percent to 152.36.

The relatively liquid shares of Ventspils Nafta (Ventspils Oil) saw a
correction over the week, dropping 3.1 percent to 0.71 lats on a
40,500 lats turnover. Most analysts have said no further fall of the
oil terminal's share price is expected in the near term given
strengthening world oil prices and the company's good operating
results for 2000. Moreover, interest in the company is expected to be
fuelled further by the announcement from the Latvian economics
minister about following through on the government's commitments to
deal with the sell-off of its remaining state-owned shares this year.

Prices of other relatively liquid shares were fairly stable with the
exception of Latvijas Unibanka, whose share price jumped to 2.10
lats, 0.05 lats above the buy-out price offered by Skandinaviska
Enskilda Banken. Most experts have said that this increase, amid very
low turnover of only 11,000 lats, was incidental, as the merger was
completed last year, and can not provide grounds for serious changes
in the bank's quoted share price.

Latvijas Gaze shares meanwhile rose 1.3 percent to 3.65 lats on
turnover of 60,500 lats, the highest turnover on the Riga bourse last
week. Turnover in the gas company's shares, though, most likely will
remain weak until the government and the Latvian Privatization Agency
make their final decision on terms and conditions of a state sell-off
of its remaining holdings of 8 percent of the company. Moreover,
given that the amount of the gas company's shares remaining in public
circulation is not very large, the shares could see major price
fluctuations on the bourse, although these fluctuations are unlikely
to go beyond the trading range of 3.40 - 3.80 lats per share in the
coming weeks.

Lithuania: Snaige edging towards merger disclosure

Slow to start after the holidays, trading on the Lithuanian stock
exchange picked up steam towards the end of the week thanks to
renewed speculation about the possible sale of blue-chip refrigerator
manufacturer Snaige to a strategic investor. The benchmark price
index Litin-10 firmed 2.8 percent to 1169.60, the blue-chip Official
List index Litin was off 0.2 percent at 456.52, and the secondary
Current List index Litin-A edged up 0.7 percent to 1114.73. The price
euro index of the Lithuanian Baltic List stocks was off 2.4 percent
to 119.54, mainly due to sharp gains by the eurocurrency. Brokers
said stock prices took an upward bent towards the end of the week.
They said it was too early to speak about continued stronger growth
but added that the holiday season is over for the bourse.

On the Official List, Snaige ended the week 3.6 percent higher at
37.07 litas ($9.26) on 538,644 litas turnover. Undoubtedly, investor
interest was fuelled by some fresh news about the appearance of a
strategic investor. On Wednesday, Jan. 3, Antanas Andriulionis,
Snaige's president, predicted that foreign strategic investors would
purchase the company within five years, and would pay at least 44
litas a share. Some market players were skeptical about Snaige's
rally, however. "The news affects investors' moods but this can only
lead to another bout of speculative activity," Suprema broker Arvydas
Jacikevicius said on Thursday, Jan. 4.

On Friday, Jan. 5, Snaige's president came up with another surprise
when he said that the company might be sold to a strategic investor
by the end of this year. "The market always reacts to such comments
by a company's CEO," said Hansabankas broker Tomas Andrejauskas. He
predicted that Snaige should remain active in the coming week but was
unlikely to break through the 38 litas ceiling.

Lietuvos Telekomas held steady at 2.10 litas with turnover for the
week reaching a moderate 538,643 litas, and brokers said the stock
was likely to remain stable in the near term. Cheese maker Rokiskio
Suris inched up 0.05 percent to 20.81 litas on just 54,700 litas
turnover; brewer Kalnapilis slid 1.6 percent to 3.60 litas amid
22,500 litas turnover; Vilniaus Bankas was flat at 50.00 litas in
trade worth 18,100 litas; and knitwear producer Utenos Trikotazas
slumped a huge 11.8 percent to 3.00 litas with 17,800 litas worth of
shares traded.

TV-tube manufacturer Ekranas led the way on the Current List as it
climbed 3.5 percent to 7.00 litas on 356,500 litas turnover. "It
seems that buy orders are coming from foreign investors who see
(Ekranas) as an alternative to investment in Vilniaus Bankas,"
Andrejauskas said. With selling interest being fairly strong at the 7
litas level, Ekranas is likely to find its limit at this point, he

Oil concern Mazeikiu Nafta, seen as one of the market's most liquid
stocks, along with Lietuvos Telekomas and Ekranas, also enjoyed some
investor interest as it firmed 2.5 percent to 0.82 litas on 171,600
litas turnover. Shipping company LISCO ended the week 10.2 percent
higher at 2.26 litas on 89,600 litas turnover. Brokers attributed the
rise to the news that the Lithuanian government would negotiate a
LISCO privatization deal with the Danish shipping company DFDS Tor
Line, rather than with the Netherlands registered consortium
B.B.Bredo B.V. Taupomasis Bankas (Savings Bank) charged ahead by 7.5
percent to 9.00 litas on 47,200 litas turnover in what Jacikevicius
described as a speculative rise, which was not supported by the
company's financial results and future outlook.

The bourse's equity turnover for the week reached 2.13 million litas.