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Estonian retailer strong despite flat Baltic Index

  • 2001-03-15
Most large capitalization Baltic List stocks again moved downwards, as priced in euros, in the outgoing week, pushing the Baltic Index of 15 Baltic List blue chips down 0.16 percent to 131.74. Losers outnumbered gainers nine to five, with one stock unchanged, on the Baltic List comprising 15 Latvian, Lithuanian and Estonian blue-chips.

Estonia's Tallinna Kaubamaja retail chain shares continued on the upward trend which started last week, climbing 5.3 percent, to 4.41 euros ($4.10) on news about good results for 2000. Tallinna Kaubamaja has gained more than 25 percent since the beginning of this year.

The continuing fall by Lithuania's Kalnapilis brewery, off 4.5 percent and the 1.5 percent loss by key Estonian shares Hansapank and Eesti Telekom should be noted.

Losses posted by these shares brought the Baltic List capitalization down by 0.5 percent, from 2.61 to 2.59 billion euros. Total Baltic List turnover in the outgoing week barely changed over the previous week, constituting 3.32 million euros, against 3.40 million euros previously. Estonian stocks contributed 88 percent of the turnover while Latvian and Lithuanian stocks brought in 6 percent each. Baltic List stocks remained leaders on Estonian and Latvian stock exchanges, accounting for over 80 percent of total turnovers on their respective home bourses, while in Lithuania this figure was just 13 percent.

Estonia: Investors awaiting Swedish banking sell-off decision

The prices of most key shares fell on the Tallinn Stock Exchange last week, with investors favoring trading in shares of Hansapank. Brokers confirm that the market remains in a passive mood. "The week didn't get off to a good start, the turnovers remained low," Uhispank broker Mart Helmja said.

The TALSE index fell 1.3 percent to 129.97 on a total turnover of 55.6 million kroons ($3.32 million) in 539 deals. The price euro index of Estonian Baltic List stocks was up 0.7 percent to 125.73 due to a sharp 5.3 percent gain, to 69 kroons, posted by Tallinna Kaubamaja retail network after releasing its results for 2000, which were better than expected.

At the same time, shares of Hansapank and Eesti Telekom, rather than of relatively illiquid Kaubamaja, were in focus on the Tallinn bourse. These two stocks usually depend heavily on trends on foreign markets, but not this week. "The world market price movements were not very much reflected in Estonia during last week," Uhispank broker said. Neither did the economic results released at the beginning of the week bring significant changes to the market, Helmja added.

The shares most traded during the week, at 30.3 million kroons of volume, were those of Hansapank. The share lost 1.4 percent of its price and closed at 139.50 kroons on March 9. "In Hansapank's case additional information concerning its deal with Lietuvos Taupomasis was expected, but none came," Helmja said. On March 7, the Lithuanian Competition Board said that it wanted first to know exactly which bank, either Vilniaus Bankas or Hansabankas, the merged Swedbank and SEB are planning to sell.

Trade in shares of Eesti Telekom amounted to 7.9 million kroons; the share lost an additional 1.7 percent and closed at 72 kroons. At one point during the week the share touched its historical low of 71.75 kroons. Trade in EVP privatization vouchers amounted to 7.2 million kroons, while trading volume in Norma reached 4.2 million kroons.

Latvia: Exchange desperate for new listings

Trading on the Riga Stock Exchange remained sluggish in the outgoing week as most stocks moved down, and with the majority of brokers weighted with a pessimistic outlook. All Latvian stock exchange indexes fell. The Dow Jones Riga Stock Exchange capitalization index (DJRSE) saw few changes, edging down just 0.06 percent to 140.54, but the price index RICI dropped 2.2 percent to 157.35. The euro price index of four Latvian Baltic List stocks was down 0.5 percent to 155.25. The weekly turnover on the Latvian stock exchange totalled just 142,000 lats ($229,000). The price changes experienced by the more liquid shares were insignificant.

Latvijas Unibanka's shares were flat, at the usual price of 2.05 lats per share, though weekly turnover increased to 47,570 lats as the bourse delisting date of March 13 looms closer.

Balta insurance gained 1.2 percent to 4.30 lats on a turnover of 43,217 lats. The increase was due to the buy-out offer by Denmark's Codan insurance group, which has offered 4.50 lats per share. To date most brokers feel that prospects for the continued quoting of Balta's shares on the stock exchange are unlikely. Janis Purgailis from Latvijas Unibanka believes that "even if Balta's shares remained on the stock exchange after the expiration of Codan's public offer, it will be just the matter for retaining the prestige of the Riga Stock Exchange," as the already very illiquid stock will suffer a further loss of liquidity.

Ventspils Nafta oil terminal's shares remained unchanged at 0.71 lats on a turnover of 18,306 lats, but shares in the gas company Latvijas Gaze inched down 0.3 percent to 3.7 lats amid trade of 6,368 lats.

The future of both companies depends to a great extent on the actions both the government and the Latvian Privatization Agency may choose to take. Any unexpected outcomes in local elections in Riga and Ventspils, the city where the Ventspils Nafta oil terminal is based, may bring some surprises in price movement of the said stocks.

Regardless of the relative stability of these comparatively liquid shares, as reflected by the stability of the DJRSE index, the price index RICI suffered from the negative effects of the downfall registered by low liquidity shares such as the pharmaceutical company Grindex, down 11.4 percent to 0.39 lats, the motor chain plant Daugavpils PKR, off 10 percent to 0.09 lats, and the metallurgy plant Liepajas Metalurgs, weaker by 5.6 percent to 0.17 lats. These are not the best of days for most market specialists.

Reinis Ceplis, an analyst with Suprema, does not expect the situation on the stock exchange to improve in the next week, as he believes the trading activity will remain at current low levels. Even Janis Purgailis, who usually holds a more optimistic opinion, suggested that to save the situation on the Riga Stock Exchange the bourse "needs to include in its lists new, serious, prospective and large companies as soon as possible and also to join some alliance of foreign exchanges." The question where one can find in Latvia these "new, serious, prospective and large companies" likely to bring out interest in investor trading on the stock exchange remains open, however. As regards a stock exchange alliance, the question is whether some foreign body would need a stock exchange with a weekly turnover roughly equal to that of a foreign currency exchange booth at some railway terminal. If either of the Scandinavian alliances, Norex and HEX, chooses to invite the Riga Stock Exchange to join their alliance, another big question arises, which is, would the price for such admission be acceptable for current shareholders of the Riga stock exchange?

Lithuania: Dairy Pieno Zvaigzdes to raise additional capital

Current List stock Pieno Zvaigzdes was the focus of attention on the Lithuanian stock exchange last week. The increased investor interest in Pieno Zvaigzdes could be attributed to speculation about the company's possible merger with Zemaitijos Pienas, another leading Lithuanian dairy group. The benchmark price index Litin-10 climbed 1.2 percent to 1225.11, the blue-chip Official List index Litin jumped 2 percent to 449.24, and the broad index Litin-G was up 0.8 percent to 1051.75. However, heavy losses posted by the previously overvalued Kalnapilis stock pushed the price euro index of five Lithuanian Baltic List stocks down 0.8 percent to 124.70. Kalnapilis fell by 4.3 percent, to 4.40 litas ($1.10). The bourse's overall equity turnover reached 5.93 million litas. The market's turnover came to 7.17 million litas and T-bill turnover was substantial, 60.55 million litas. According to market participants, trading remained inactive, and the reason behind this was the lack of foreign interest. Shares that posted the largest turnovers ended in positive territory, or at least stayed stable.

Listed on the Current List, dairy group Pieno Zvaigzdes charged ahead by 20.7 percent to 1.63 litas amid a 626,700 litas turnover. Brokers say that the increased activity could be due to the company's plans to launch a new share issue at a price of 2 litas a share, 1 litas above their face value. "Investors believe that the company may have a buyer who has already agreed to pay the price," Hansabankas broker Tomas Andrejauskas said. Pieno Zvaigzdes' shares are also driven by speculation about the company's possible merger with Zemaitijos Pienas, which has announced plans to seek a strategic investor. In reaction to the announcement, Zemaitijos Pienas, another leading Lithuanian dairy, rocketed 32.8 percent to 6.76 litas, though generating just 80 litas in turnover.

Blue chip Lietuvos Telekomas climbed 2.4 percent to 2.08 litas amid a 517,000 litas turnover. Cheese maker Rokiskio Suris rose 2.6 percent to 19.50 litas with 116,200 litas worth of shares traded, and refrigerator producer Snaige held steady at 35 litas, generating 77,200 litas in turnover. TV-tube maker Ekranas climbed 3.5 percent to 8.70 litas on 93,100 litas turnover.

On the Current List, shipping company LISCO rocketed 5.8 percent to 3.61 litas amid 217,300 litas turnover, and shares in furniture maker Vilniaus Baldu Kombinatas added on 2.8 percent to 4.74 litas in trade worth 179,600 litas. In block trading, 2.10 million litas' worth of shares in electronic component maker Vilniaus Vingis, and 358,700 litas' worth of shares in Ukio Bank, changed hands.