Baltic List gets shorter Ð Unibanka out

  • 2001-03-22
Last week the Baltic List, which includes the highest capitalization company shares in the Baltics, was characterized by two very opposite trends. Firstly, virtually all Estonian company shares were falling, driven by the turmoil enveloping world stock markets. Secondly, the sharp drop of the euro against the Latvian and Lithuanian currencies caused Latvian and Lithuanian shares to rise in value in terms of the euro. As a result the Baltic Index fell by only 0.6 percent for the week to 130.92.

Latvijas Unibanka finally was taken off bourse-listed trading. Of the 14 companies left on the Baltic List, losers outnumbered gainers nine to five. The drop in share value for the most highly capitalized Estonian companies, as well as Latvijas Unibanka's delisting, forced a sharp fall in the capitalization of the Baltic List, from 2.59 billion to 2.42 billion euros ($2.20 billion), or 6.5 percent. Large deals in Estonia's Hansapank shares accounted for a considerable amount of Baltic List volume, reaching 5 million euros, compared to 3.3 million euros the previous week.

Estonian shares accounted for 87 percent of this turnover, Lithuanian, 8.5 percent and Latvian shares, 4.5 percent. Baltic List shares took leading positions on the Tallinn and Riga stock exchanges, grabbing more than 70 percent of their respective bourse total turnover. For Lithuania this figure stood at only 15 percent.

Estonia: Hansapank dominates gloomy week

Negative news from global markets held a tight grip on the Estonian stock market during the past week, taking the TALSE index 2.8 percent lower to 126.23. The index of six Estonian Baltic List stocks fell 3.7 percent to 117.38. The total turnover generated in 531 deals was 75.9 million kroons ($4.34 million), with shares in Hansapank accounting for two-thirds of this turnover. "Insecurity took over in the second half of the week and selling pressure fell on the shares," Uhispank capital markets strategist Aivo Kangus said. It was very common to see prices starting off at extremely low levels at the beginning of the session, only to recover during the day, he noted. "Stocks were taken away from nervous investors," Kangus concluded. "HansaÐpank remained stronger than others, whereas interest for Saku and Norma was lower," Kangus said. The most traded issue was Hansapank, with 50.5 million kroons changing hands. The share lost 3.4 percent of its value to finish the week at 134.72 kroons.

"Lack of security in Eesti Telekom is caused by the world markets," Kangus said. Telekom was down 2.7 percent from March 16, closing at 70 kroons, with a five-day turnover of 4.6 million kroons. "Insecurity on the stock market may continue for some time, there's no reason for great panic and it's a good moment to buy stocks," Kangus suggested.

He also observed that the EVP privatization voucher was showing higher than usual volatility. Kangus attributed this to sluggish privatization of state-owned land and to low demand. Information likely to affect the price of the EVP is expected soon, as the government is about to make a proposal regarding compensation plans of uncanceled vouchers after their expiry in July 2002. EVP shares dropped 3.6 percent during the week to 0.62 kroons on a turnover of 3.71 million kroons.

Latvia: Bad news in pipeline for Ventspils

Recent comments by LUKoil representative Haim Kogan could pressure Ventspils Nafta oil terminal's share price. The latest news involve claims from the Russian LUKoil representative forecasting that Ventspils Nafta shares would be falling considerably in the future. This would be based upon the opening of Russia's proposed new oil terminal at Primorsk, if it ever gets past the preliminary planning stages.

Last week the Riga Stock Exchange's more liquid stock prices held steady; however, the market was still reacting to recent negative news. This included the fall of major global stock exchange indexes, as well as the local election results in Riga, which gave victory to populistic forces which may slow economic reform and Latvia's EU accession drive. Nevertheless, the Latvian stock exchange's liquidity is so low that even a sharp fall in prices on world trading posts has not effected Latvian share prices. The same can be said for the local election results influencing the stock market, since the new ruling coalition at the Riga City Council may be established no sooner than at the end of next week.

For these reasons the Dow Jones Riga Stock Exchange capitalization index went almost unchanged, falling only by 0.09 percent to 140.42.

Even though neighboring Russian, Estonian and Lithuanian, in addition to global indexes fell significantly, the price index RICI increased by 3.3 percent to 162.54. The RICI price index climb can be explained by positive revaluations made to prices of low-liquidity shares in Rigas TF transportation fleet, Liepajas ML steelworks and Daugavpils PKR motor chain factory. The prices of these shares are now so low that even slight changes cause considerable impact in percentage terms.

The euro index for the three Baltic List Latvian shares rose by 6.3 percent to 165.13. The climb in the Latvian euro index was caused by the adjustment made after Lavijas Unibanka was delisted from the official Riga Stock Exchange lists. The Latvian euro index was also positively affected by the fall in the euro exchange rate against the Latvian lat. Share turnover on the Riga Stock Exchange reached 163,000 lats ($263,000). Trade in T-bills and government bonds reached a turnover of 13.6 million lats.

The DJRSE index showed a relatively flat trading range for its shares. Ventspils Nafta oil terminal share prices fell by 1.4 percent to 0.70 lats. National gas operator Latvijas Gaze shares increased by 0.3 percent to 3.71 lats, while Balta insurance prices increased by 0.23 percent to 4.31 lats.

Nevertheless, recent comments made by a LUKoil representative on the future of the Ventspils oil terminal could cause a significant fall in Ventspils Nafta shares on the market. In an interview with the Bloomberg news agency, LUKoil Baltija Chairman Haim Kogan warned that after the oil terminal at Primorsk in Russia is opened, Ventspils Nafta share prices could fall even to 20 or 30 santims ($0.48) each. Kogan also denied recent rumors which holds LUKoil negotiating the purchase of a controlling stake in Ventspils Nafta.

Meanwhile, the future for Latvijas Gaze seems somewhat brighter, as Russian Gazprom Chairman Rem Vyakhirev has announced that there is a real possibility of building a new gas pipeline to Europe across the Baltic Sea.

Lithuania: Dairy industry in merger talks

Dairy stocks were at the center of attention last week in Lithuania amid talks of merger plans and of a search for strategic investors. At the same time most other share prices were down for the week. The benchmark price index Litin-10 dropped 3.7 percent to 1178.68, the blue-chip official list index Litin slid 2.8 percent to 436.65, and the broad index Litin-G skidded 2.5 percent to 1025.03. The index of five Lithuanian Baltic List stocks gained 1.5 percent to 126.64. However, this gain was attributed entirely to the euro currency's losses against the litas and the U.S. dollar.

The bourse's overall equity turnover came to 10 million litas ($2.50 million). Additionally, 29.8 million litas' worth of government T-bills traded during the week.

Due to shareholders' meetings, shares in the current list dairy group Pieno Zvaigzdes were not traded at the beginning of the week; however, this did not prevent the company from keeping its leading positions for two weeks in a row. Once trading resumed, Pieno Zvaigzdes rocketed 12.8 percent to 1.84 litas amid a 870,700 litas turnover and hit a new 52-week high. On March 12, Pieno Zvaigzdes' shareholders gave the go-ahead for plans to issue 9.5 million new shares, with the minimum selling price to be set at 2 litas a share; that is 1 litas above the share's face value. Shareholders also decided to pay a 2 percent per share dividend from 2000 earnings.

Ongoing speculations about a possible merger between Pieno Zvaigzdes and Zemaitijos Pienas, a local dairy group, continue to move the market, too, Hansabankas broker Tomas Andrejauskas said. Dairy Zemaitijos Pienas soared 33.1 percent to 9 litas amid a 138,300 litas turnover. Another 580,200 litas' worth of shares in Pieno Zvaigzdes, and 166,300 litas' worth of shares in Zemaitijos Pienas changed hands via block deals.

On the official list, another representative of the dairy industry, cheese maker Rokiskio Suris, was off just 0.05 percent to 19.49 litas on a turnover of 261,100 litas. "The stability in Rokiskio Suris' share price could be attributed to the company's announcement to acquire 49.5 percent of shares in Varenos Pienine," Martynas Kulvinskas, head of the securities unit at Ukio Bankas, said.

Blue-chip Lietuvos Telekomas slid 2.8 percent to 2.02 litas in trade worth 581,000 litas, and another 631,400 litas' worth of shares in the company changed hands via block deals. Specialists attributed this decrease to reflection upon the bearish trends on most world stock markets. TV-screen maker Ekranas dropped 5.1 percent to 8.25 litas on a 104,100 litas turnover. Brewer Kalnapilis held steady at 4.40 litas in trade worth 71,800 litas, and refrigerator producer Snaige skidded 2.8 percent to 34 litas amid a 46,800 litas turnover.

Going back to the current list, furniture maker Vilniaus Baldu Kombinatas climbed 2.3 percent to 4.85 litas on a 163,300 litas turnover and shipping company LISCO slid 3 percent to 3.50 litas amid a 148,100 litas turnover.

Electronic component maker Vilniaus Vingis tumbled 4.2 percent to 5.60 litas amid a 94,600 litas turnover. On March 14, some 354,300 shares in Vilniaus Vingis, accounting for 3.8 percent of its authorized capital, were sold for 2.01 million litas in one block deal. That deal means that the German company Turbolite Vertriebs GmBK raised its shareholding in Vilniaus Vingis from 23.34 percent to 27.23 percent.

Some 1.59 million litas' worth of shares in synthetic yarn producer Dirbtinis Pluostas traded in block deals. In further block trading, 854,500 litas' worth of shares in oil concern Mazeikiu Nafta, 451,500 litas' worth of shares in Ukio Bankas and 354,500 litas' worth of shares in the investment company Invalda changed hands, anticipating shareholders meetings next week.