Summed up

  • 1999-02-18
SWEDISH BANK INCREASES ITS STAKE IN UNIBANKA: Skandinaviska Enskilda Banken bought 5.9 percent of the state-owned shares in Latvia's Unibanka at a Feb. 11 auction, confirmed Gunilla Wikman, head of the SEB communications office. After the subordinated capital invested into Unibanka by SEB is converted into shares, SEB's share in Unibanka will amount to 40.9 percent. Wikman did not comment on whether SEB is also willing to increase its share in Estonia's Uhispank and Lithuania's Vilniaus Bankas. The full supply of the 2,171,530 state-held shares in Unibanka were sold at a special auction on the Riga Stock Exchange for 1.27 lats ($2.23) per share. The Latvian state does not hold any more shares in the bank. Late in 1998, SEB acquired 8.55 million newly issued shares in Unibanka. In addition, SEB has invested 10 million lats into Unibanka's subordinated capital.

MOSCOW OFFERS MACHINERY FOR LITHUANIAN FOOD: The Moscow municipal government intends to organize food purveyance from Lithuania and give natural gas, machinery or money in return, the Russian news agency Interfax reported. The deal was made during negotiations between Moscow mayor Yuryi Luzhkov and Bronislovas Lubys, leader of the Lithuanian Industrialist Confederation, Feb.10. Luzhkov said he was ready to fly to Vilnius to sign an agreement with the Lithuanian government on all intentions agreed on at the meeting. The mayor said Moscow had export quotas of natural gas and therefore could give it to Lithuania for food. Moreover, the Russian capital offered Lithuanian suppliers inexpensive Bychok trucks and Renault Megane cars, due to be produced in Russia's Moskvich car plant soon. Building materials have also been placed on the table. Bartering operations, in Luzhkov's opinion, will help to reduce losses suffered through currency conversion. Moscow said it could also pay in cash if its partners prefer.

ESTONIA TO HAVE ANOTHER DUTY-FREE ZONE: Estonian Prime Minister Mart Siimann, when meeting with the Voru County government, okayed the idea of a duty-free zone in Voru. The draft of a respective decree will be submitted at the next Cabinet meeting. Cabinet spokesman Daniel Vaarik said the discussion was quite strenuous, with Economics Minister Jaak Leimann, Finance Minister Mart Opmann and Voru County Governor Robert Lepikson attending. "It was decided the territory of the duty-free zone should be smaller than had been planned before. The main condition was that strictly only export and import companies can operate in the area," Vaarik said. He said that the area lies on the southern outskirts of Voru near the railway station, where some industrial enterprises and warehouses are also located.

LITHUANIA SHOULD STOP PROTECTIONISM: Although Lithuania had agreed to revoke the minimum prices established for imported agricultural products in future, Latvia and Estonia believe that they should be canceled immediately. Latvian Prime Minister Vilis Kristopans said this was his position at the Baltic prime ministers' meeting in Vilnius. The joint committee will meet to discuss the problems of the Baltic Free Trade Agreement on Feb. 17. Latvia and Estonia both handed notes to Lithuania protesting the minimum prices on imported agriculture products which contradict the Baltic Free Trade Agreement and the World Trade Organization. If the joint committee fails to settle the matter within three months, Latvia will be entitled to take countermeasures. For example, Foreign Ministry officials suggested that Latvia could raise this issue at the meeting of the WTO working group dealing with the Lithuanian application for membership in this organization.

TWO BANKS' MERGER NEARS: The Bank of Lithuania will consider Vilniaus Bankas' application to acquire 43 percent of shares in Hermis Bank in the first half of March. Reinoldijus Sarkinas, central bank's board chairman, announced the news Feb. 9 after he met with heads of Lithuania's commercial banks. The central bank's Policy Department has almost completed a report on the possible impact of a merger between Lithuania's top two private banks.

ESTONIA'S NEW INVESTMENT FUND: Estonia's Hansa Investments intends to launch a new type of investment fund, the Capital Protection Fund, in the near future. Aadu Oja, managing director of Hansa Investments Management, said the fund would have a conservative investment policy. The new fund's means would be mostly invested into fixed-yield and euro-linked financial instruments. Oja said the present investors like a fund with a conservative bias and preliminary reactions have been positive. Application for a license for the new fund is now in the final stage, Oja said. Half a year ago, Hansa Investments applied for an investment fund called Hansa Investments Balticum, which, however, was never launched due to an unfavorable market condition. The fund is now in the process of legal closure.