Estonian retailer surprises with strong earnings

  • 2001-03-08
Most Baltic states' blue chip stocks last week posted losses, pulling the Baltic Index down by 1.5 percent to 131.95. Losers outperformed gainers 12 to three on the Baltic List of blue chips listed on the Riga, Tallinn and Vilnius bourses.

Shares in Estonia's shopping store chain Tallinna Kaubamaja rose, in contrast to the general trend, as they posted significant gains, with its stock up by 7.4 percent to 4.19 euros ($3.89) on reported better than expected 2000 operating results. Lithuania's stocks were among the losers, as Rokiskio Suris, Kalnapilis and Lietuvos Telekomas lost 5 percent to 8 percent, with prices listed in euros getting hit by the appreciation of the euro against the litas, the national currency. Although Eesti Telekom posted slight gains, the Baltic List's capitalization contracted over the week to 2.61 billion euros from 2.65 billion euros, or by 1.6 percent.

The Baltic List turnover meanwhile decreased two times over the previous week to 3.4 million euros, down from 6.81 million euros. Estonian stocks accounted for 88.5 percent of the list's weekly turnover, with Lithuanian and Latvian stocks at 5.75 percent each. Baltic List stocks held the leading volume positions on the Latvian and Estonian bourses, providing over 75 percent of their turnover. In Lithuania meanwhile the indicator was just 6 percent.

Estonia: Banking sector ratings to be hit by Swede merger

Despite an expected change in the stock exchange's ownership structure, calm prevailed on the Tallinn market during the past week, with no surprises shaking the market. The TALSE index finished the week at 131.78, up a marginal 0.03 percent. The price euro index of six Estonian Baltic List shares was up 1.7 percent to 120.98 due to sharp gains posted by the relatively illiquid Tallinna Kaubamaja. The bourse's total turnover came in at just 62.2 million kroons ($3.72 million), roughly two times lower than the previous week.

Hansapank's stock again was the most traded issue with a five-day turnover of 25.7 million kroons. The price of the share fell 1.7 percent to 141.50 kroons over news about a possible Estonian banking ratings downgrade after the SEB-Swedbank merger. "Hansapank's share calmed down after the commotion caused by the news of the Swedish bank merger, and buyers' interest subsided a bit," Trigon Markets trader Kaur Elviste said. Hansapank resumed trading in a range it was at before the merger news was announced, the trader observed.

Eesti Telekom's relentless decline ended, with the share finishing the week 1.7 percent higher at 73.25 kroons, and a five-day turnover of 12.7 million kroons.

Analysts believe that any market developments in the coming weeks will depend on the situation on major world markets, as the initial positive impact from the news on the merger of Sweden's major banks is over. Fresh news or a change in the mood on foreign markets is needed to move the market higher. "Investors are following the outside markets, while we cannot expect any major upsurge without the telecom sector's support," Elviste said.

Latvia: Mergers, acquisitions threaten bourse survival

The Riga Stock Exchange last week was hit by news of the delisting of a number of its leading stocks. The news concerning halting the quotation of Latvijas Unibanka's shares on the bourse as of March 13 was, of course, no surprise, but nobody expected so soon a shift in the ownership structure of Balta insurance company. Although Danish Codan, the new owners of Balta, have pledged they would attempt to leave Balta's bourse listing, it could prove to be quite a difficult task. Additional bad news came when the Helsinki stock exchange's management, after clinching a deal on its takeover of the Tallinn Stock Exchange, went straight to Vilnius, bypassing Riga. Although such a decision may have its formal grounds, this fact in itself brings about no optimism in Latvia. Share turnover on the Riga bourse for the week was 160,000 lats ($259,000). In comparison, Estonia and Lithuania saw turnovers 3 to 4 times higher; this low turnover is possibly an excuse for why the HEX's CEO decided to skip Riga during his Baltic tour.

The low turnover on the bourses was matched by falling index levels. The capitalization index DJRSE dropped 0.3 percent, closing at 140.63, and the price index RICI was off 2.1 percent to 161.08. Four Latvian stocks included in the Baltic List fell 1.4 percent to 156.11. The fall of the index to a great extent was due to appreciation of the euro exchange rate against the lat, the national currency.

The decline of the DJRSE index was mostly due to a 1.1 percent fall by Latvijas Gaze shares, to 3.71 lats, from 3.75 lats.

Among other fairly liquid stocks, Balta was noteworthy, as it gained 1.1 percent closing the week at 4.25 lats. The stock is expected to reach 4.5 lats a share soon, the price offered by Codan. The price index RICI was pulled down by a sharp 14.2 percent fall in Rigas Transporta Flote (Riga Transport Fleet) to 0.06 lats; Kaija fish company fell 6.2 percent to 0.15 lats; and Liepajas Metalurgs (Liepaja Metallurgy) slid 5.2 percent to 0.18 lats.

Lithuania: Rumored privatization ruling lifts trading

Trading on the Lithuanian stock exchange slowed for the week. At the beginning of the week investors turned their attention to the Lietuvos Juru Laivininkyste (Lithuanian Shipping Company, LISCO); later, however, interest in this stock declined and trading grew sluggish. The benchmark price index Litin-10 eased 1.4 percent to 1209.47, the blue-chip Official List index Litin skidded 3.6 percent to 440.23, and the broad index Litin-G was off 1.7 percent to 1042.93. Falling prices of key shares, and a strengthening euro exchange rate against the Lithuanian litas, pushed the price euro index of five Lithuanian Baltic List shares down sharply, off 5.2 percent to 125.81. The bourse's overall turnover came to 11.93 million litas (2.98 million dollars).

Current List stock LISCO posted the highest turnover, at 817,000 litas. LISCO's rally could be attributed to rumors that the government might scrap the rule under which investors in state-owned companies are exempt from the obligation to make a tender offer when they acquire over 50 percent of shares from the state. However, later in the week the demand for LISCO shares weakened and its share price started falling. It skidded 1.1 percent to 3.41 litas.

Blue-chip Lietuvos Telekomas was the most actively traded Official List stock, which slid 2.8 percent to 2.03 litas in trade worth 390,800 litas. Another 103,000 litas worth of shares changed hands via block deals. TV-tube producer Ekranas made a quiet debut on the Official List, tumbling 6.6 percent to 8.40 litas amid 163,000 litas turnover.

Elsewhere on the Official List, brewer Kalnapilis slipped 5.1 percent to 4.60 litas on 93,300 litas turnover, and cheese maker Rokiskio Suris tumbled 5.9 percent to 19.00 litas, posting 70,700 litas in turnover. Listed on the Current List, artificial fiber maker Dirbtinis Pluostas dropped 11.5 percent to 0.23 litas in trade worth 233,100 litas. On March 2 all shares changed hands in three deals; in the opinion of brokers, these were therefore pre-arranged transactions. As many as 8,501,000 shares of Dirbtinis Pluostas (8.8 percent of the company's authorized capital) were sold on March 2 as well, in one block deal worth 1.95 million litas.