Week of contrasts brings few changes

  • 2001-02-08
Regardless of the significant price changes of stocks in both positive and negative directions, the Baltic Index of 15 high-capitalized Baltic List stocks stayed almost unchanged over the last week, edging down just 0.01 percent to 131.95 points.

The main lowering factors on the Baltic stock markets were a downward movement by telecommunication stocks in Estonia and Lithuania as well as the depreciation of the Latvian and Lithuanian national currencies against the euro.

But news of better-than-expected profits from the Latvian insurance company Balta and the Estonian construction company Merko Ehitus pushed the two stocks up significantly.

The negative and positive factors balanced each other out leaving the Baltic Index almost unchanged over the week.

But as Lietuvos Telekomas and Eesti Telekom are Baltic List stocks with the highest capitalization, their losses pulled down the list's capitalization by 1.8 percent to 2.76 billion euros ($2.58 billion), down from 2.81 billion euros a week ago.

The weekly turnover of Baltic List stocks was 5.4 million euros, down from 6.5 million euros a week earlier.

Estonian stocks accounted for 73 percent of the total list's turnover, Lithuanian stocks for 19 percent and Latvian stocks for 8 percent.

Last week the Baltic List stocks led the trading on their home bourses, securing over 70 percent of the turnovers in the Riga, Vilnius and Tallinn bourses.

Estonia: Stock markets quieter than world markets

It was significantly quieter on the Tallinn Stock Exchange than on world markets in the outgoing week, with no immediate effect of the sharp fluctuations in the technological sector in Estonia.

The TALSE stock index fell 0.55 percent to 140.97 points over the week amid losses posted by Eesti Telekom.

At the same time, the price euro index of six Estonian Baltic List stocks gained 2.12 percent to 122.24 points over the week.

The total TSE weekly trade volume was 70.95 million kroons ($4.26 million). The Estonian Baltic List stocks contributed the lion's share of this turnover - 61.23 million kroons or 86.3 percent.

"The world markets fell, and there's a lot of pessimism there," Preatoni Bank broker Priit Jarviste said. But the mood is more optimistic in Estonia, he added.

Shares in Eesti Telekom were not left unhurt by the falling world markets. They lost 3.91 percent of the price and closed at 86 kroons. The total turnover during the week was 17.5 million kroons. Jarviste said the price of Eesti Telekom also fell in London.

But shares in Hansapank showed their strength, climbing 2.88 percent to 143 kroons during the week. The share generated the week's biggest turnover of 29.7 million kroons.

The biggest gainer in the main list in the outgoing week was the construction company Merko Ehitus, which soared 10.51 percent to 43.10 kroons.

Merko's price rise was caused by the publication of preliminary financial results for last year, which sharply exceeded expectations, the broker said.

The market of privatization vouchers was rather calm last week and specialists do not predict any sharp changes soon.

"The price of EVP privatization vouchers has become stuck in the range of 0.65 to 0.67 kroons, and there is no escape from this in the near future," Jarviste said.

The price of the vouchers rose 0.30 percent to 0.663 kroons during the week on a turnover of 5.55 million kroons.

This week, Eesti Telekom will announce its provisional 2000 profit figures. This announcement will probably become the most influential event for the market.

Latvia: Balta emerges as market leader

Shares in the insurance company Balta emerged last week as an absolute market leader on the Riga Stock Exchange both in terms of turnover and the share price increase. Balta last week pushed up both the stock indices and the market turnover.

The capitalization index DJRSE jumped 0.7 percent over the week to 141.41 points while the RICI price index closed 1.55 percent higher at 167.69 points.

The euro price index of the four Latvian stocks, traded on the Baltic List, closed the week 0.82 percent higher at 155.36 points.

The weekly stock turnover increased two times over the week to 376,000 lats ($611,000). The Baltic List stocks generated a turnover of 458,000 euros or 70 percent of the Riga bourse turnover thanks to the high turnover of Balta.

Balta shot up 11.5 percent over the week to 4.25 lats on a turnover of 230,000 lats on the news about 1.77 million lats preliminary profit which significantly exceeds earlier forecasts.

Balta's shareholders may expect they will get between 0.14 lats and 0.16 lats per share in dividends as the company normally pays between 40 percent and 50 percent of its net profit in dividends.

Along with the news of high profits for the previous year, the company's management announced that Balta is set to raise its net profit to 2 million lats in 2001.

Apart from Balta, the trading with the rest of the official list stocks was almost at a zero level.

The other three Latvian stocks of the Baltic List saw their prices staying unchanged over the week.

Of the second list stocks, Latvijas Balzams saw the most active trading with a turnover of 59,000 lats over the week, its share price staying unchanged at 0.36 lats.

Despite the wave of activity in trading with Balta stocks, analysts are still pessimistic about the prospects of the Latvian stock market, and believe the market is unlikely to see any major changes in the leading stock prices and trading volumes next week.

The Latvian stock market today lacks liquidity, so some extraordinary news is needed to raise it from its Ôdead point'. Reinis Ceplis, an analyst from Suprema, believes no changes for the better may be expected anytime soon.

Lithuania: Trading slows

Trading on the National Stock Exchange of Lithuania slowed last week amid foreign investors' fears of further market decline.

The blue-chip Official List index Litin slid 3.02 percent to 471.78 points as the behemoth Lietuvos Telekomas slid 4.78 percent to 2.19 million litas ($547,500) in trade worth 2.3 million litas .

The bourse's overall equity turnover reached 5.42 million litas last week, with Baltic List trading accounting for 1.01 million euros or 69 percent of the total.

The continuously tracked price index Litin-10 edged up 0.52 percent to 1,239.32 points and the broad index Litin-G skidded down 2.03 percent to 1,089.75.

The euro price index of the five Lithuanian Baltic List stocks was off 3.17 percent to 124.86 points over the week as the euro's strong rally alone contributed 2.01 percent to the index's fall.

Most brokers believe foreign investors temporarily retracted from the market, partly redirecting money from Telekomas toward stocks that show promise for stronger gains in the short term, which would explain Telekomas' downward movement.

Elsewhere on the Official List, the refrigerator producer Snaige climbed 1.22 percent to 36.50 litas on 139,300 litas turnover and the brewer Kalnapilis jumped 4.02 percent to 4.40 litas in trade worth 66,500 litas.

As of Feb. 1, Vilniaus Bankas' stock was removed from the Official List at the request of the Swedish bank SEB, which owns 98.9 percent of the shares in Lithuania's largest commercial bank.

Despite this, Vilniaus Bankas held steady at 50 litas over the week amid 238,000 litas turnover.

Electronic component maker Vilniaus Vingis led trading on the Current List, shooting up 11.55 percent to 5.70 litas in trade worth 689,800 litas. On Monday it was announced that the German company Turbolite Vertriebs had acquired the state-owned stake of 23.34 percent in Vingis.

"The gains may be attributed to investors' expectations that Germany's Turbolite Vertriebs will continue to buy into the company after its recent acquisition of a 23.34 percent stake," Martynas Kulvinskas, head of the Securities Trading Unit at Zemes Ukio Bankas, said.

The Lithuanian Shipping Company, currently under privatization, surged 8.9 percent to 3.18 litas in trade worth 508,700 litas. The rise might be attributed to the coming new round of negotiations between the government and the Dutch company DFDS Tor Line on the sell-off of LISCO.

"The rise in these shares is purely of a speculative nature. I think that the share price will go up or at least remain stable until the middle of next week, when representatives of DFDS Tor line come to Lithuania," Tomas Andrejauskas, a broker at Hansabankas, said.

The TV-tube maker Ekranas edged up 0.12 percent to 8.70 litas amid 359, 000 litas, and furniture maker Vilniaus Baldu Kombinatas surged by 14.46 percent to 4.75 litas amid 113,100 litas.

The gas utility Lietuvos Dujos climbed 4.17 percent to 1.75 litas on 197,100 litas turnover.

"This stock is very interesting. Currently a lot of Ôinterest groups' are clashing over the upcoming privatization of the company, and this is being reflected on the bourse," said Suprema broker Arvydas Jacikevicius.

Changes in NSEL trading rules

Certain changes to the National Stock Exchange of Lithuania trading rules took effect Feb. 1. Closed auctions during the opening of the trading session have been changed to open auctions. In order to prevent price manipulation, from now on the exact opening time of each trading session is chosen at random between 9:25 a. m. and 9.30 a.m.

Also, the duration of continuous trading is extended by one hour and now closes at 2 p.m., as in Latvia and Estonia.

The new rules define the closing price as the share price at which the last transaction was concluded during the session, rather than the weighed average share price of that trading session.

The closing price is taken as a basis for the calculation of the bourse's share indices and is used as a reference price for the calculation of price variation limits.

The National Stock Exchange of Lithuania also stopped calculating the LITIN-A index for secondary Current List stocks.