Baltic trading mood rides the crest of a wave

  • 2001-01-18
  • Boriss Epsteins
The outgoing week saw both the stock prices and trading activity increasing on the Lithuanian and Estonian markets while the Latvian market remained passive.

The Baltic Index comprising 15 Latvian, Lithuanian and Estonian blue-chip companies climbed 1.53 percent to 128.48 points last week with gainers outnumbering losers 10 to five.

The Lithuanian Baltic List stocks posted the largest gains over the week. Shares in Kalnapilis brewery rocketed up 14.22 percent to 1.09 euros ($1,03) and Lietuvos Telekomas shares charged ahead by 7.45 percent to 0.6 euros, with many experts predicting further growth in these stocks.

The growing prices boosted the Baltic List capitalization from 2.69 billion to 2.74 billion euros last week. The total weekly turnover of Baltic List stocks reached 7.12 million euros due to a major new deal with Hansapank's shares. The Estonian Baltic List stocks accounted for 89 percent of the total figure, or 6.33 million euros.

Baltic List stocks continue to lead the Estonian and Latvian stock exchanges by turnover. In the outgoing week, Baltic List stocks contributed between 65 percent to 80 percent of the turnover on their respective home bourses. In Lithuania, however, deals with the Baltic List stocks brought in less than a third of the total turnover.

Tallinn bourse turnover up amid buoyant mood

Trade on the Tallinn Stock Exchange had an optimistic note in the outgoing week and deals with large numbers of Hansapank shares had a positive effect on the turnover. The TALSE index finished the week 1.12 percent higher at 139.15 points. The euro price index of six Estonian Baltic List stocks was up 1.91 percent to 117.36 points over the week.

"As Western markets too have recovered over the last few days, the prevailing mood is optimistic," Hansapank markets broker Romet Tepper said. Local investors still regard key stocks as a good investment and there's some interest on the part of Scandinavian investors as well. The outgoing week will indeed be remembered for large parcels of Hansapank shares changing hands.

On Jan. 10, Hansapank sold to a U.S. fund all the 407,000 shares recovered from Marcel Vichmann after litigation between him and Hansapank's leadership drew to a close.

"This is a sign of the interest being taken in the bank," Tepper commented. In his opinion, selling the shares in one parcel was the right thing to do as the price level would have been totally different if a couple of thousand had been sold at a time.

Hansapank ended the week 0.54 percent higher at 139.75 kroons, generating a total of 81.5 million kroons.

"There's no movement in the Eesti Telekom share price at the moment," the broker observed. "Major buying interest in London at a certain level won't let the price move up."

Telekom traded in the range of 84.50/86.50 kroons, finishing at 86.25 kroons on a turnover of 7.7 million kroons. Tepper does not expect the price of the share to move either up or down much in the near future.

Investors are also buying Norma, the broker said. The share is attractive primarily to local investors. Norma climbed 1.20 percent to 50.40 kroons during the week in deals worth nearly 7 million kroons. Tepper remarked that fundamentally Norma is relatively attractive even at the 50 kroon level. He predicted the continuation of a moderate stable buying interest in the short term in anticipation of economic results and dividends.

Also the brewery Saku Olletehas moved steadily up in anticipation of dividends in the past week. The share rose 2.48 percent to 62 kroons with 2.2 million kroons in turnover.

Of the supplementary list shares, Viisnurk was also briskly traded. The week's turnover came to more than 4 million kroons. The share closed at 50 kroons, up by 2.04 percent from last Friday. Tepper said that the liquidity of the share is good. As interest in the share would rise as soon as it started slipping, a fall is at present not on the cards, he said. One factor that contributes to Viisnurk's popularity is apparently the firm being one of the world's largest ski manufacturers, the broker noted.

The aggregate TSE turnover was 114.7 million kroons. Deals in Baltic List stocks contributed 86 percent of total turnover, 6.32 million euros.

Trade remains sluggish on the Latvian market

Contrary to the Estonian and Lithuanian stock markets, trading on the Riga Stock Exchange remained extremely slow in the outgoing week, with most stocks moving downwards. The Dow Jones Riga Stock Exchange capitalization index was off 0.9 percent to 138.83 points, and the price index RICI dropped 3.33 percent to 168.00 points. The euro price index of four Latvian Baltic List stocks fell 1.66 percent to 149.84 points over the week.

Most of the stocks either moved down or stayed firm as the trading was slow. Latvijas Unibanka's shares returned to the customary price level of 2.05 lats dropping 2.38 percent amid sluggish trade. Ventspils Nafta's shares remained flat at 0.7 lats in the outgoing week, and the price level was ensured for the largest Baltic oil terminal mostly by high world oil prices.

In addition, the difficult situation with the performance of the national budget in Russia is prompting the government to increase exports of oil and oil products through Baltic terminals. Each of the two above shares posted a weekly turnover of 27,000 lats.

Shares in the gas company Latvijas Gaze gained a little over the week from 3.65 to 3.69 lats and continued to lead the Latvian bourse by turnover, although a weekly turnover of 57,000 lats does not seem to be the proper figure for "a leading stock."

Many Latvian stocks outside the Baltic List suffered serious losses last week. Shares in the pastry factory Staburadze plummeted 12.5 percent to 0.70 lats. The price drop is due to continued uncertainty about sources of financing in a deal where Staburadze acquired a controlling stake in another Latvian confectionery producer, Laima.

In addition, the Stock Market Commission keeps investigating the recent change of Staburadze's shareholders. If the commission determines that "mutually related" shareholders have acquired over 50 percent of the company's capital, they will be required to make a buy-out offer to remaining shareholders as provided for by law.

Liepajas Metalurgs metallurgy plant's shares sank 11.54 percent to 0.23 lats last week. Although the company announced good profit figures in 2000, the company's profitability this year may suffer considerably if the U.S.A. imposes any sanctions restricting steel imports.

The weekly turnover on the Riga Stock Exchange was 172,000 lats, with the Baltic List stocks accounting for 65 percent of the total, or 193,000 lats.

Trading activity picks up speed in Lithuania

Trading activity on the Lithuanian stock exchange was slow at the beginning of the week but increased later on. The benchmark price index Litin-10 edged up 0.39 percent to 1174.17 points, the blue-chip official list index Litin climbed 4.87 percent to 478.74 points, and the secondary current list index Litin-A was off 0.15 percent to 1113.08 points. The price index of five Lithuanian Baltic List stocks also climbed in line with LITIN Ñ by 4.34 percent to 124.73 points.

"The pick up in activity after the holiday season was in line with expectations, with new investors, new money, new plans and new ideas coming to the market," Suprema broker Arvydas Jacikevicius said.

Lietuvos Telekomas was the most actively traded stock on the central market this week. It jumped 7.14 percent to 2.25 litas on 1.6 million litas turnover.

On Jan. 9, Vilniaus Bankas and the British investment fund Williams de Broe issued "buy" recommendations for shares in Telekomas, which they said were undervalued, and this has had a positive psychological effect on investors, Jacikevicius said. If investors' confidence in Telekomas grows a more serious rise in the share price may take place, the broker said, adding that this would also depend on trends in the world's markets.

The refrigerator producer Snaige saw active trade as well, remaining almost unchanged at 37 litas amid a 543,900 litas turnover.

"The active trade in this stock is due to a meeting of shareholders that took place on Jan. 13, but it is difficult to predict what will happen to shares in Snaige after this meeting," Tomas Andrejauskas, broker at Hansabankas, said. He added that the active trade in Snaige might loose speed next week. Nevertheless, the news about the coming of a strategic investor should not let the share price drop markedly.

Vilniaus Bankas held steady at 50.00 litas on a 247,400 litas turnover. Cheese maker Rokiskio Suris was off 1.9 percent to 20.6 litas amid a 47,600 litas turnover, but brewer Kalnapilis surged 13.90 percent to 4.1 litas with 68,300' litas worth of shares traded on new rumors about changes in the ownership of the company. Knitwear producer Utenos Trikotazas also climbed 4.68 percent to 3.13 litas amid a 1,500 litas turnover.

Oil concern Mazeikiu Nafta remained the most actively traded current list stock. It climbed 3.66 percent to 0.85 litas amid 762,400 litas turnover. The oil terminal's stock is still seen by many investors as a safe haven for reinvesting money after the sell-off to Scandinavian bank SEB.

"It is likely that some foreign fund is buying shares in Mazeikiu Nafta, and so investing the proceeds received from shares in Vilniaus Bankas," Andrejauskas said.

TV-tube maker Ekranas was up 3 percent to 7.21 litas, posting a turnover of 503,000 litas. "I believe Ekranas is one of the most interesting stocks in the market, and its price is edging its way upwards. There is some selling pressure, too. Relatively large orders come in now and then, which scare some investors away," Finasta broker Algimantas Variakojis said.

"It is a common practice on the Lithuanian market that share prices move upwards in the first weeks of the new year. No surprise, then, that Ekranas was among these stocks, because the company's performance results are rather good," Rascius said. The bourse's overall equity turnover reached 7.3 million litas Deals in Baltic List stocks contributed less than a third of this turnover, at 607 million euros ($571,43).