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Trading on the Tallinn Stock Market was subdued last week, with total market turnover amounting to only 15 million kroons ($1.12 million). Brokers attributed the sluggish activity to a lack of interest by investors. "No one is interested in selling at these levels and even Hansapank's liquidity leaves a little to be desired at the moment," Hansapank broker Romet Tepper said. "Bigger shareholders are waiting for better days."
Thin trading, though, did not stop the TALSE index from recovering some of last week's Brazil-induced losses, posting a gain of 2.99 percent to finish on Friday at 94.07.
Tepper said that market watchers are again starting to expect Hansapank's trading market share to increase month to month. He added that Hansa's share of the Estonian market is currently 52 percent. Hansapank has made good progress also in Latvia, and in Lithuania it is applying for a license to open a subsidiary. "All those factors together provide security for the investors," Tepper said.
Most analysts' hopes for improved trading volumes are connected with the upcoming initial public offering of shares in Eesti Telekom, due to open on January 25. Expectations are riding high on the Telekom issue, which is viewed as the savior of the stock exchange, to resuscitate both turnover and share prices.
The insurance company ASA Kindlustus' shares showed the way forward for the week and, in one deal alone, soared 87.5 percent to 7.50 kroons a share. Interestingly, one comment heard on the street was that there would be no deals with the shares at such a price level. "I cannot see anything good in that company," Tepper said. This insight supports evidence of a rash of additional problems popping up at the company. On January 22, the stock exchange suspended trading in ASA Kindlustus stock, demanding publication of additional information about the company's financial situation. SRV Ehitus, which is constructing the main building for AB Kindlustuse Grupp in central Tallinn, suspended work at the site last week due to the client's financial problems.
Latvia: Trading activity remains weak
Last week, trading on the Riga Stock Exchange was extremely quiet, with most share prices sliding down. The DJRSE index slid 2.01 percent to 94.23 points and the RICI dropped 2.73 percent to 181.57 points. Turnover for the week totaled 308,000 lats ($540,350).
There was reason to cheer, though, as an auction of Latvijas Balzams shares plus a bevy of repo deals provided turnover activity to keep brokerage houses busy.
Pulling the indexes down was the 16 percent fall in Rigas Komercbanka's share price to 21 santims each. Most investors fear the company's announced loss of 1.2 million lats for 1998 will grow once international auditors take a peek at the books. Mystery still surrounds the still unnamed Western investor who has shown interest in the bank. Shares had been down by nearly a third after the bank's losses were announced but subsequently recovered after speculation surfaced again about the investor's intentions.
Despite Unibanka's announcement of an 8.7 million lat loss, the bank's share price ended the week steady at 0.87 lats. Investors are waiting patiently for the announcement of the conditions of an auction of the state-held 2.17 million share package, which is likely to be decided on Jan. 26.
Analysts do not expect any market surprises this week, with trading remaining slow, and can only recommend investors wait and watch for earnings results.
Latvian investors are probably more interested in Estonian Telekom's IPO rather than the auction of Latvijas Balzams shares. It is worth noting that Ave Lat Group, a strategic investor in the distillery, said that it is not interested in additional Balzams shares either.
Vilnius: Turnover falls while prices stay mixed
Last week trading on the Lithuanian National Stock Exchange experienced a reversal from the previous week's strong performance, with turnover lower and prices experiencing a trade-off between the two indexes. Share prices on the Litin ended the week down 0.85 percent to 531.41 points while the LitinA posted a slight gain of 0.58 percent to 1167.15 points. Turnover came in at only 11.94 million litas ($2,985,000).
Shares in Vilnius Bank, Hermis Bank, Ukio Bank and Lithuanian Shipping Company continued to grab all the attention. While brokers were positive at the beginning of the week, by midweek the mood soured and most banking shares began to fall.
"There were no serious buyers of Hermis' shares, and offers and demand balanced," Baltijos Vertybiniai Popieriai broker Dmitri Dutov told the Baltic News Service. Its share price dropped 11.94 percent to 94.03 litas on a turnover of 2.7 million litas. Additional support for Hermis' share price dried up rather quickly, as it now appears that Vilnius Bank's application process for acquiring a stake in the bank has stalled and won't be reviewed in the near future.
Shares in Ukio Bank pushed higher early in the week but retreated after an unknown buyer of the security unexpectedly disappeared from the market. Dutov said this spooked other speculators, who began to sell, sending the bank's share price to lower levels. Nevertheless, it ended the week up 3.91 percent at 7.98 litas on a turnover of 2.06 million litas.
Brokers agree that Vilnius Bank's shares remain the most attractive on the bourse, but investors remain so cautious that even turnover of VB's shares is relatively low. Its share price was up 2.24 percent to 27.42 litas on a turnover of just 834,000 litas.
Investors are awaiting audited 1998 results of banking shares, due out in early February and March, and only when this new information is out will they have sufficient reason to revalue stock prices. Until then, there should be little change in share prices or trading volume.