Baltic bourses gripped by bearish mood

  • 2001-04-12
Last week saw prices fall on all three Baltic stock exchanges. The Baltic index, calculated in euros, fell by 1.3 percent over the week to finish at 130.57. Though almost all of Lithuania's listed shares participated in the fall, it was primarily TV screen producer Ekranas, listed on the Baltic index just last week, as well as Estonia's Eesti Telekom and Latvia's Ventspils Nafta oil terminal, that provided most of the drag down. The index would have fallen even further if Tallinna Kaubamaja shares didn't rise by 13 percent. Losers outnumbered gainers 10 to four on the Baltic list, with one Estonian company's share price remaining unchanged.

The Baltic list capitalization index on April 6, after the addition of Ekranas, stood at 2.45 billion euros ($2.21 billion). The Baltic list aggregate turnover reached 3.75 million euros, against 5.09 million euros the previous week. Estonian shares accounted for 67 percent of this turnover, Lithuanian stocks 31 percent and Latvian shares only 2 percent. Baltic List stocks held leading positions on the Estonian stock market, controlling more than 75 percent of the total share turnover. Latvian and Lithuanian exchanges showed lower domestic bourse share participation with volume at 30 percent.

Estonia: Investors trading on dividend expectations

Estonian stocks, which started the week in decline, reclaimed most of the lost ground by week's end. In the week's count, the TALSE index eased 0.9 percent to finish at 123.57. The price euro index of six Estonian Baltic List stocks was up 3.04 percent, ending at 121.01. The reason for the Baltic List index strength was the sharp jump in illiquid Tallinna Kaubamaja shares, which gained 13 percent over the week, though on low turnover. The bourse's total turnover, generated in 487 transactions, was 45.85 million kroons ($2.64 million).

Eesti Telekom emerged as the biggest loser of the week, dropping 4.03 percent to close at 65.50 kroons, with a five-day turnover of 9.99 million kroons. On April 4, Telekom hit a new all-time low of 64.50 kroons. "Telekom's share hit a new low this week due to the weakness on world markets," Hansapank Markets trader Lauri Lind said. "At the end of April we're awaiting a decision on the payment of dividends, so before that the price could move a little higher."

The most traded issue during the week was Hansapank with a turnover of 23.7 million kroons. The price of the share was up 0.7 percent to 134.50 kroons. "For Hansapank's share there was buying interest from outside, bigger on some days and smaller on others," Lind said.

Trading in the seatbelt manufacturer Norma was active, with the share's price tag moved by interest from locals, Lind said, adding that the interest was prompted by the anticipation of dividends. The list of Norma's shareholders eligible for the dividend will be fixed on May 23. The company plans to pay a dividend of 5 kroons per share. Norma was up 1.2 percent to 47.10 kroons, with 4.7 million kroons' worth of the shares changing hands.

Trading in brewer Saku was also brisker thanks to the news concerning dividends, the trader said. Saku ended the week 1.5 percent higher, to 66.00 kroons, with 2.4 million kroons in turnover. Shareholders of the brewery, at a general meeting on April 2, decided to pay themselves a dividend of 5 kroons per share, with the list of eligible shareholders to be fixed on the 15th trading day after this general meeting.

Latvia: Treasury bill activity dominates trading volumes

Over the last week, most of the Riga Stock Exchange's quoted shares lost value. The RICI price index fell by 2.9 percent to 153.34, the lowest level in the last 18 months. Meanwhile, the Dow Jones Riga Stock Exchange capitalization index remained just about unchanged, gaining 0.05 percent to 135.73. The index for the three Latvian companies quoted on the Baltic List, which usually tracks the DJRSE, last week fell by 1.5 percent to 160.43 due to the fall in the euro against the Latvian lat. Share turnover on the stock market reached only 151,300 lats ($239,800). Total trading volume on the Riga Stock Exchange, including deals in bonds and other debt securities, totalled 1.08 million lats.

The fall in the RICI index can be explained by a considerable slide in value for non-liquid stocks such as the fish canning firm Kaija, down 23.8 percent to 0.16 lats, and the confectionery producer Staburadze, down 10.4 percent to 0.60 lats. Meanwhile, the negative effect left on the DJRSE by Ventspils Nafta, off 3.1 percent to 0.63 lats and the insurance company Balta, lower by 1.1 percent to 4.25 lats, was compensated for by the gain in fiberglass factory Valmira Stikla Skiedra shares, up 2.2 percent to 0.47 lats and in national gas company Latvijas Gaze shares, richer by 2.2 percent to 3.70 lats. Valmiera Stikla Skiedra took the lead in terms of turnover, at 63,900 lats. Deals in shares of Latvijas Gaze were concluded worth 36,300 lats.

Last week, Liepajas Metalurgs shares were up 6.1 percent to 0.16 lats per share. This rise may be explained by the company managing to beat year 2000 profit forecasts, despite facing U.S. and Canadian anti-dumping restrictions.

Next week some analysts expect a considerable jump in trading volume, though possibly concentrated in shares of Venstpils Nafta. Data published last week on oil and oil product handling amounts through the Ventspils Nafta oil terminal in the first quarter of 2001, which exceeded last year's results by 7 percent, is reason to believe that the company's shares will not slip much further than they already have. Thus, the optimism that these shares could see a slight boost in trading activity and price.

Lithuania: Investors on sidelines for lack of news

Share trading was generally weaker compared to the previous week. The bourse's continuously tracked price index Litin-10 eased 3.03 percent to 1,144.06, the blue chip official list index Litin was down 3.07 percent to 409.96, and the broad index Litin-G fell 1.2 percent to 994.63 points. The price index of the six Lithuanian Baltic List stocks dropped by 5.1 percent, ending at 125.19, as the eurocurrency's gains against the litas gave it an additional downward push. The bourse's overall equity turnover for the week reached 15.24 million litas ($3.80 million). Total weekly turnover came to 25.65 million litas, including 10.4 million litas from T-bill transactions.

Brokers attribute the market decline mostly to outside news. "Downward trends prevailed this week, due mainly to a lack of local corporate news and unfavorable movements in foreign equity markets," said Martynas Kulvinskas, head of the securities trading department at the agricultural bank Zemes Ukio Bankas. "If there is some news, I believe we may see more activity next week. If not, trading is likely to remain passive," he added.

Lietuvos Telekomas ended the week 2.6 percent lower at 1.87 litas in trade worth 1.38 million litas, hitting a new historical low. Another 1.98 million litas' worth of shares in the monopolistic fixed-line phone operator changed hands via block trades. "Telekomas' shares now should be attractive to investors who do not believe that there will be a major fall in the value of the shares, and who want to take their chances and receive dividends after (Telekomas) shareholders' meeting in a month's time," Finasta broker Aurelijus Rimkus said.

Brewer Kalnapilis slid 3.4 percent to 4.49 litas on a turnover of 105,000 litas, and refrigerator producer Snaige climbed 1.4 percent to 34.50 litas in trade worth 101,000 litas. Market players attributed Snaige's rally to the company's statement that potential buyers of a majority stake in Snaige are expected to carry out their due diligence work in April and May, with a sales deal likely to be closed in late June. Another 400,500 litas worth of shares in Snaige were sold in block trades.

TV-tube producer Ekranas made a weak debut on the joint Baltic List as it skidded 7.1 percent, to 7.80 litas, in trade worth 71,200 litas despite an optimistic forecast made by some analysts at the end of last month. Vilniaus Bankas last week issued a "buy" recommendation for shares in Ekranas, saying that the stock is undervalued, and its "fair" price should be 11.40 litas.

Cheese maker Rokiskio Suris remained stable at 18.80 litas on a turnover of 89,400 litas, and the knitwear producer Utenos Trikotazas fell 5.04 percent to 3.20 litas with just 1,700 litas' worth of volume. On the Current List, the shipping company LISCO led the way, ending the week 0.5 percent lower at 3.66 litas in trade worth 272,000 litas. Another 331,300 litas worth of shares changed hands in block trades.

Gas utility Lietuvos Dujos jumped 5.1 percent to 1.63 litas on a turnover of 122,200 litas, and furniture maker Vilniaus Baldu Kombinatas slid 2.5 percent to 4.63 litas in trade worth 114,500 litas.

Shares in the dairy producers Zemaitijos Pienas and Pieno Zvaigzdes continued to fall. Zemaitijos Pienas slumped 21.9 percent to 8.20 litas on a turnover of 74,500 litas, and Pieno Zvaigzdes sank 6.4 percent to 1.45 litas with 82,600 litas worth of shares traded. The electronic component maker Vilniaus Vingis dropped 13.4 percent to 5.20 litas in trade worth 69,200 litas, and the savings bank Taupomasis Bankas was up 1 percent to 9.09 litas on a turnover of 68,200 litas. In block trading, 3.37 million litas' worth of shares in Pieno Zvaigzdes, and 3.26 million litas' worth in Vilniaus Vingis, changed hands.