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Rising Estonian stocks push up Baltic index

  • 2001-05-10
  • Boriss Epsteins
Significant gains by most Estonian stocks pushed up the Baltic index of the most capitalized Baltic states' stocks last week. The index gained 0.6 percent to 128.54 but was restrained from more impressive gains by falling share prices in Lithuania. Gainers outnumbered losers nine to six on the Baltic List of blue chips listed on the Riga, Vilnius and Tallinn bourses. Four of the six losers were Lithuanian shares, with the TV tube maker Ekranas, which is new on the Baltic List, emerging as the leading loser, plummeting 11.7 percent. Among gainers, Estonia's shopping store chain Tallinna Kaubamaja and the construction company Merko Ehitus, which are relatively low liquidity stocks, climbed between 5 perent to 6 percent each.

Regardless of the loss by Lietuvos Telekomas, the Baltic List's capitalization grew by 0.5 percent, to 2.56 billion euros ($2.29 billion). This capitalization increase was driven by increasing share prices in Eesti Telekom, Hansapank, Latvijas Gaze and the oil terminal Ventspils Nafta.

The Baltic List's weekly turnover amounted to 5.6 million euros, up from 5.3 million euros the previous week. Estonian stocks accounted for 95 percent of the total weekly turnover, Lithuanian shares 3.5 percent and Latvian, just 1.5 percent. Baltic List stocks last week held leading positions on their home bourses, accounting for more than 95 percent of the Tallinn Stock Exchange turnover while in Latvia the portion was 42 percent and Lithuania less than 10 percent.

Estonia: Traders upbeat on strong buying

Activity on the Tallinn Stock Exchange was brisk, with trading on an upbeat note throughout the entire week. The TALSE stock index climbed 2.1 percent to 134.71 in the four day trading week. The price euro index of the six Estonian Baltic List stocks jumped by even more, up 3.4 percent to 124.72. The aggregate turnover from the 546 deals concluded during the week reached 85.2 million kroons ($4.85 million).

Hansapank accounted for slightly more than half of this turnover. The shares rose 2.1 percent to finish at 143.00, with 45.04 million kroons in turnover. "Buying interest toward Hansapank peaked at 143 kroons," Trigon Markets broker Kaur Elviste said. Despite Hansapank's 2001 target price, set at 180 kroons - 200 kroons, analysts are not sure whether buying interest will persist. Elviste added that some block deals were concluded during the week, and next week will show whether the buying interest continues.

Eesti Telekom's shares finished at 76.50 kroons, up by 2 percent from the previous week's close, in deals worth 23.2 million kroons. "Eesti Telekom gained strength from news about the repurchase of shares early in the week," Elviste observed. Telekom announced April 30 the board would propose at the May 23 general meeting of shareholders to repurchase, within one year, up to 5 percent of outstanding shares.

The car safety equipment maker Norma is approaching its important May 17 date, when the share goes ex-dividend. Norma posted gains of 3.6 percent, ending at 53.50 kroons, with a turnover of 7.02 million kroons.

Latvia: Summer doldrums mark low volumes

Summer calm has settled on the Latvian market, following increased activity at the end of April. The weekly stock turnover on the bourse was just 125,000 lats ($199,000) amid relatively small price changes in the most liquid stocks. The capitalization index DJRSE dropped 0.19 percent to 134.7, while the price index RICI was off by 0.6 percent to 151.16. The Latvian euro price index gained 0.3 percent to 159.61 but the growth was only due to fluctuations in the euro exchange rate against the Latvian lat.

The distillery Latvijas Balzams, trading on the Riga bourse's second list, emerged as the turnover leader, with 49,600 lats worth of shares traded. The stock was up 5.7 percent to 0.37 lats. Latvijas Balzams' price increase was most likely due to the fact that the company's Q1 operating results support, with high probability, the company meeting this year's profit forecast of 1.39 million lats. Analysts believe, though, the price increase and the relatively high turnover was only a temporary phenomena. Janis Purgailis of Latvijas Unibanka believes the demand and offer equilibrium price for the stock currently is set at about 0.37 lats per share.

Latvijas Gaze shares saw a turnover of 36,000 lats, with the share price unchanged at 3.75 lats. Worries about rising gas tariffs for Latvian consumers in the near future were realized, and Latvijas Gaze' management offered an explanation that the increasing fuel oil prices on the world's markets is forcing up gas prices supplied by Gazprom to Latvia. Purgailis does not rule out the possibility that the most recent failure in the privatization of the Latvian Shipping Company may prompt the government to speed up terms for selling state-owned shares in the gas company to its current owners, firstly, to Germany's Ruhrgas, and then to Russia's Gazprom and Itera.

The oil terminal Ventspils Naf-ta's share price remained unchanged at 0.6 lats amid a 15,000 lat turnover. The company's operations so far this year have been highly successful despite the looming gloomy perspective on the company's future, as the company in the first quarter of the year has increased oil reloading volume by 10 percent over the same period last year. Moreover, the growing conflict in Lithuania between America's Williams company and Russia's LUKoil also, to a certain extent, propels Ventspils Nafta's owners to feel more confident in themselves.Trading in other shares last week did not generate noteworthy volume.

From the Baltic list stocks the insurance group Balta dropped 3.1 percent to 4.1 lats which, most likely, is attributable to the group's weak financial results for the first quarter. Moreover, there has been no recent news about talks between Balta's current shareholders and the Danish group Codan on the sale of a controlling stake in Balta. Taking into account that exactly a year ago an similar deal between Balta and the financial group Sampo failed, shareholders naturally are a bit nervous, fearing that the promised purchase of Balta's shares by Codan, for 4.5 lats per share, may either not take place or could be postponed.

Concerning price movements in the less liquid listed shares, noteworthy activity includes the strong price surge of the shipyard Rigas Kugu Buvetava's and transport fleet Rigas Transporta Flote's shares, and in a similarly strong though negative move, drops in the pastry factory Staburadze's and in the metallurgy company Liepajas Metalurgs' shares. The latter two, jokingly, could be attributed to the weak performance of the Latvian national ice-hockey team in the world championship, as Staburadze and Liepajas Metalurgs were active sponsors of the Latvian team. Some disillusioned hockey fans may have sold their shares in the two companies as a sign of protest. This is yet another sign of the lottery mentality in the investment climate of Latvia. The two stocks generated a turnover of just 443 lats for the week.

Lithuania: No news is bad news for share prices

Stocks were following a downward trend on the National Stock Exchange of Lithuania as low turnovers on the central market were the result of a lack of news. The bourse's benchmark price index Litin-10 edged down 3.7 percent to 1,062.05. The blue chip official list index Litin slid 5.7 percent to 384.69, and the broad index Litin-G was off 3.5 percent to 952.34. The price euro index of the six Lithuanian Baltic List stocks was off 2 percent at 116.84. The bourse's equity turnover came to 27.18 million litas ($6.80 million). The bourse's overall turnover came to 59.81 million litas, including 32.6 million litas accounted for through T-bill trading. Brokers said trade picked up in mid-week but investors were focused on only two or three stocks, ignoring the others.

On the official list, blue chip Lietuvos Telekomas generated a turnover of 408,100 litas. Following the shareholders' approval of a 15 percent dividend, Telekomas skidded to 1.78 litas, a new low, on May 1. It moved up and reached 1.80 litas by the weekend, still down 5.7 percent from a week earlier.

The TV tube producer Ekranas closed the week down 12.7 percent at 6.02 litas with 141,600 litas' worth of shares traded. The market gave a negative reaction to the company's decision to sell its new share issue to foreign investors at a price equal to the face value of the shares, 5 litas, along with the news that the company's sales in Turkey were hard hit by the currency crisis in that country.

The brewer Kalnapilis was up 0.4 percent to 4.12 litas in trade worth 36,400 litas. Another 65,400 litas worth of shares changed hands via block trades. The cheese maker Rokiskio Suris slid 4.7 percent to 18 litas on a 33,400 litas turnover. The refrigerator maker Snaige slid 1.4 percent to 34.50 litas amid a 17,300 litas turnover; the knitwear manufacturer Utenos Trikotazas climbed 1.6 percent to 3.00 litas with just 917 litas' worth of shares traded.

On the current list, the savings bank Lietuvos Taupomasis Bankas was in focus, stable at 9.50 litas in trade worth 452,000 litas. "Trading in Taupomasis Bankas has become active since Hansapank was named winner in the privatization tender. I believe it will remain active, but the price is likely to remain fairly stable, as (the Estonian bank) has pledged to make a buyout offer of 9.88 litas a share. Actually, the stock has little room for growth," Hansabankas broker Tomas Andrejauskas said. In block trading, a total of 306,800 litas' worth of shares in the savings bank changed hands.

The Lithuanian shipping company LISCO saw active trading as well, holding steady at 3.30 litas on a 402,000 litas turnover. The electronics component maker Vilniaus Vingis sank 5 percent to 5.03 litas with 348,100 litas' worth of shares traded. Turnovers of other stocks on the current list did not exceed 100,000 litas.

In block trading, 23.39 million litas' worth of shares traded in the oil products terminal Klaipedos Nafta, 441,700 litas' worth of shares in the paper producer Grigiskes moved, and 350,100 litas' worth of shares in Siauliu Bankas changed hands. The commercial banks Vilniaus Bankas and Ukio Bankas saw deals valued at, respectively, 128,300 litas and 100,700 litas.