Stock markets: weekly report (November 5 - 12)

  • 1999-11-18
Estonia: Week ends on sluggish upswing

Trading on the Tallinn Stock Exchange was rather sluggish in the
outgoing week, with a falling trend prevailing at the start and
prices rebounding at the end of the week. The TALSE index closed at
94.22 points, down by 0.91 percent from the previous Friday.

"If the securities market falls on Monday it stabilizes in the middle
of the week and starts rising again on Friday," Hansapank broker
Romet Tepper observed.

Against this background of relatively slack trading, Eesti Telekom
stood out with a substantial turnover. After a plunge of 4.6 percent
on Monday, the share became more stable as the week advanced, ending
at 75 kroons ($4.98) or 1.32 percent lower than a week ago with an
aggregate turnover of 13.9 million kroons. In Tepper's opinion, the
share has apparently hit the bottom and will now be trading at above
73 kroons for some time. During the outgoing week, the lowest price
for Eesti Telekom was 72.25 kroons.

Next to the telecom company, some interest also came Hansapank's and
Norma's way. The upgrading of Hansapank's rating by Standard &
Poor's, however, did not bring in its wake any marked changes in
trading activity and share price. Hansapank, generating 12 million
kroons, rose 0.33 percent to close the week at 76.75 kroons. Norma
ended at 29.60 kroons, up by 3.86 percent from a week ago, with 7.1
million kroons' worth of its shares changing hands.

A solid rise was recorded by Baltika on the supplementary list. The
share soared 8.74 percent to close at 12.30 kroons. Tepper said
Baltika is so illiquid that all it took to push up the price was a
major buying order.

Excellent nine-month results failed to produce a notable change in
the price of Saku brewery shares. The share was the most-traded among
supplementary-list securities with a 1.3 million kroon turnover. Saku
closed on Friday at 47.20 kroons, a drop of 0.21 percent from a week
ago. Tepper thinks that Saku's liquidity is excellent at the moment.
"There was a strong buying interest in the shares for two days
running, yet the price did not change much," he noted. "The share is
apparently being sold by investors who awaited the results and are
now closing their positions."

The Tallinn Stock Exchange's turnover during the outgoing week
totaled 41.4 million kroons.

Latvia: No turn for the better

There was no turn for the better on the Riga Stock Exchange last week
with share prices continuing to slide on critically low turnovers.
The RICI index sank 3.93 percent last week to 150.67 points, with the
cap-weighted DJRSE finishing down 1.44 percent at 75.24 points. The
difference in the two indexes may be attributed to milk cannery
Rezeknes PKK, which is included in the calculation of the RICI and
not the DJRSE. The cannery's shares plunged 25 percent to 0.09 lats
($0.16) last week. The drop is due to the dairy's poor financial
situation. Shareholders ousted its director last week, but many
obviously are not confident Rezeknes PKK can reverse its fortunes.

The Rezekne-based dairy may have helped pull down Unibanka's share
price as the bank is one of its major creditors. Several of
Unibanka's leaders have also been major shareholders in the dairy and
helped prepare its privatization. The dairy is now a potential third
major credit risk for Unibanka, following the bankruptcy of sugar
refinery Jekabpils Cukurfabrika and Tolaram Fibers.

Latvijas Balzams' shareholders endorsement of the merger with Rigas
Vini has not helped the company's share price, which last week held
steady at 0.40 lats.

Meanwhile, Ventspils Nafta's share price slid 2.13 percent to 0.46
lats. Bad news for the company was the announcement by LUKoil chief
Vague Alekperov that the company will now actively support the
construction of a Baltic pipeline system in Russia's northwest
instead of the western pipeline to Ventspils. Only three stocks on
the RSE's official and second lists posted gains last week.
Staburadze climbed 1.01 percent to 1.00 lat, Latvijas Gaze was up
0.57 percent to 1.75 lats and pharmaceutical factory RigasFF jumped
6.25 percent to 0.17 lats. Total share turnover totaled 130,000 lats
last week, almost unchanged from the previous week, with shares in
Ventspils Nafta having the highest turnover at 88,700 lats. The Riga
Stock Exchange will be closed on November 18 and 19 in observation of
Latvia's Independence Day.

Lithuania: Trading picks up

Last week turnover picked up on the Lithuanian National Stock
Exchange as investors began to more actively trade shares in Vilniaus
and Hermis banks. Trading in the two stocks generated 70 percent of
the 5.4 million litas ($1.35 million) turnover on the central market,
a four-fold jump from the previous week. The announcement of the
three-to-one exchange ratio during the two banks' merger was made
midday on the previous Friday, lighting up trading this past week as
owners of Hermis' shares who wanted to invest in Vilniaus Bankas
rushed to buy VB shares that were drastically undervalued. Vilniaus
Bankas' share price jumped 15.17 percent to 26.27 litas on a central
market turnover of 2.04 million litas. Another 530,800 litas in
shares were traded in direct deals.

Brokers say there are still many investors who want to buy the bank's
shares on the expectation that they will still rise. Most Hermis'
investors that wanted to switch shares have already done so, brokers
believe. Therefore, trading in Hermis' shares should quiet down. This
past week Hermis' shares climbed 0.26 litas to 125.05 on a turnover
of 1.72 million litas.

The LITIN-10 index ended the week by falling to 0.40 percent to
1,170.91 points, while the blue-chip LITIN jumped 5.60 percent to
535.97 litas. The difference was mostly due to Ukio Bankas' 14.56
percent plunge this past week, which is included in the LITIN-10 but
not the LITIN index. The bank's share price fell to 7.57 litas on a
central market turnover of 492,200 litas. Suprema broker Arvydas
Jacikevicius said that wild fluctuations in Ukio Bankas' share price
are no surprise. Baltic Securities' Dmitry Dutov commented that it
seems that someone is trying to manipulate the bank's share price

On the official list, shares in cheese maker Rokiskio Suris climbed
2.32 percent to 22.07 litas on a central market turnover of 121,400
litas. Shares in refrigerator manufacturer Snaige warmed up 2.82
percent to 35 litas on a turnover of 104,800 litas.

Slightly over 8 million litas of shares in Panevezio Pienas were sold
in direct deals. On the market there are rumors the shares were
bought by Birziai dairy or people connected with it, but the dairy's
management has declined to confirm or deny these rumors.

Turnover on the market totaled 25.94 million litas, with a 5.4
million litas turnover on the central market.