Large deals with Eesti Telekom, Hansapank and Ventspils Nafta shares ensured a comparatively high weekly turnover of 9.06 million euros. Nevertheless, compared to the previous week in which the majority of shares in the Latvian insurance company Balta were sold to the Danish insurer Codan, turnover was down by a quarter. Estonian shares accounted for 83.3 percent of total turnover, Latvian shares 11.5 percent and Lithuanian shares only 5.2 percent. As usual, Baltic list shares held dominating trading positions on the Tallinn and Riga stock exchanges, generating more than 90 percent of their total share turnover. For Lithuania this figure stood at only 8 percent.
Estonia: Telekom in share repurchase
In terms of turnover, the last week showed stable and solid results on the Tallinn Stock Exchange, with aggressive buying in Hansapank and Estonian Telekom shares. At the same time, Norma came under some selling pressure after going ex dividend. The stock index climbed 4.5 percent, ending at 149.87. The euro price index of the six Estonian Baltic list stocks rose 2.5 percent to an absolute record high of 129.39. The aggregate exchange turnover, from 888 deals, was 124.1 million kroons ($6.79 million).
Of the leading shares, Hansapank posted the biggest gain, at 5.8 percent. The shares, which closed at 158.75 kroons, were also the most traded, with a turnover of 60 million kroons. "Both local and foreign investors' buying interest in Hansapank persisted, and since there is little selling interest at the other end, the price of the share may continue moving up," Hansabank Markets broker Romet Tepper said.
Eesti Telekom finished 4.7 percent higher, at 87.50 kroons, on a turnover of 41.5 million kroons. A general meeting of Telekom shareholders approved proposals for the distribution of profits and a repurchase of shares. Telekom can be expected to see brisk trade until May 31, when the share goes ex dividend.
Norma dropped 2 percent, closing at 49 kroons amid trade worth 15 million kroons. "The Norma share has been under selling pressure since the payment of dividends, but investors taking a longer view are on the buying side," Tepper observed.
The brewery Saku Olletehas was supported by the overall buoyancy of the market, Tepper said. The share climbed 1.6 percent to 63 kroons in deals worth 1.8 million kroons.
Following an 18.4 percent plunge two weeks ago, the EVP voucher is slowly gathering strength again. EVP finished the week 0.9 percent higher at 0.545 kroons on a turnover of 2.02 million kroons. "There has been no market-influencing news concerning EVP privatization vouchers, and trade in the voucher is dictated by demand and supply," the broker added.
Latvia: Investors find security in large cap shares
The big cap stocks on the Riga Stock Exchange gained last week, pulling up most Latvian indexes. Meanwhile, shares in the confectionery Staburadze, as well as a number of other low liquidity shares, fell considerably, taking the RICI price index with it. Over the week the RICI price index fell 5.1 percent to 152.88. The Dow Jones Riga Stock Exchange capitalization index gained 1.3 percent to 138.79. The three Baltic list stocks gained even more, with the Latvian index up by 4.8 percent to 170.87. This was mainly due to the rise in the lat against the euro.
The total stock market turnover last week amounted to 625,600 lats ($980,000). The aggregate turnover on the Riga Stock Exchange totaled 20.43 million lats, including 19.8 million lats of trade in debt securities and state treasury bills.
In terms of turnover, the oil terminal Ventspils Nafta held the leading position, reaching 518,800 lats, with the share up 3.3 percent to 0.62 lats. Even though the turnover was comparatively large, analysts are not rushing to forecast any increased trade in Ventspils Nafta shares. Investment bank Suprema's corporate financial specialist Reinis Ceplis believes that the high turnover does not yet mean that any large deals are actually on the way. Meanwhile, Latvijas Unibanka resource management analyst Arnis Skapars says that despite negative news on the company and negative views from the technical analysts, Ventspils Nafta shares are still holding between 0.60 and 0.62 lats each.
Shares in the national gas company Latvijas Gaze increased 1.3 percent to 3.85 lats, with the share turnover reaching 32,100 lats. Skapars believes that the upward pricing pressure is due to investors wanting to get into the shares at any price, regardless of the company's growth prospects.
At the beginning of the week, when it became clear that Danish Codan would take over a majority interest in Balta, the stock rose 4.7 percent to 4.45 lats a share. Nevertheless, low liquidity in these shares meant that trading volume was light. Seeing that the share price has almost reached the Codan announced offer price of 4.50 lats, and the purchase of a majority already complete, no speculative activity is likely to drive the price higher.
The fiasco in the confectionery Staburadze deal is still unsettled on the bourse. As could be expected, the court case between the stock market commission and company shareholder council chairman Gisli Reynisson may drag out for months. For this reason, the market saw a fall in Staburadze shares, by 20.3 percent, to 0.55 lats. Analysts believe that surprises related to these shares are still to be expected. Skapars claims that the price at which the Staburadze owner, Iceland's Nordic Food, may have to offer for the remaining shares could be even higher than the previously announced 1.62 lats a share. This could happen if it turns out that Nordic Food bought its shares from the previous owner, Ernesto Preatoni, for an even higher price. In this case, Latvijas Unibanka's analysts believe that Latvian legislation will require Nordic Food to buy the remaining outstanding shares at this very same price. Most Latvian market specialists believe that the Latvian stock market commission does not intend on giving up the struggle with Reynisson and Nordic Food. Latvijas Krajbanka analyst Ivars Bergs says that the negative attitude on behalf of the Latvian stock commission toward Reynisson could possibly be related to a previous incident, in which the interests of Staburadze's small shareholders were ignored.
Last week it was announced that the Staburadze-owned Laima chocolate factory has been bought by Euro Food, which belongs to an Irish businessman, who in turn, not surprisingly, is related to Reynisson and Nordic Food. At this moment one must not rule out that the events surrounding the Staburadze shares may affect the deal in which Latvian Rietumu Banka's controlling stake is to be purchased by Islandsbanki-FBA. Staburadze is one of the biggest debtors to Rietumu Banka and Reynisson is said to have taken part in managing the bank's acquisition deal.
Lithuania: Little excitement as shares stay within range
The Lithuanian stock exchange did not see any substantial moves in either direction, as early summer doldrums hung over the market. Most stocks closed more or less unchanged amid modest turnovers. Trading picked up slightly by mid-week, but the lull soon returned. The bourse's benchmark price index Litin-10 advanced 0.3 percent to 1,053.20; the blue chip official list index Litin climbed 2.9 percent to 383.53, and the broad index Litin-G was off 0.1 percent to 936.13. The price euro index of the six Lithuanian Baltic list stocks rose 3.5 percent to 121.6, still far below its peak level, above 130, reached in early April this year. The bourse's equity turnover reached 21.03 million litas ($5.25 million). The bourse's overall turnover was 44.90 million litas, of which 23.9 million litas was generated through T-bill trading. The gains in Lithuanian share prices, in euros, are explained partly by the continued weakening of the euro currency against the Lithuanian national currency, the litas.
On the central market, blue chip Lietuvos Telekomas generated the largest turnover. Trading on the official list, Telekomas was up 3.4 percent to 1.80 litas on a 580,100 litas turnover. Another 44,300 litas' worth of shares in the blue chip changed hands via block trades. Brokers attributed the recovery of Telekomas to favorable trends on world markets, as well as to rising demand for Telekomas' shares on the local market.
The cheese maker Rokiskio Suris was off 0.06 percent to 17.99 litas amid a 168,900 litas turnover; the brewer Kalnapilis slid 1.1 percent to 4.15 litas in trade worth 64,200 litas; the refrigerator producer Snaige climbed 1.4 percent to 35.50 litas with 60,300 litas' worth of shares traded. In block trading, 613,900 litas' worth of shares in Rokiskio Suris and 66,800 litas' worth of shares in Kalnapilis changed hands.
The TV-tube producer Ekranas was up 4.3 percent to 5.75 litas amid a 17,900 litas turnover; the knitwear maker Utenos Trikotazas held steady at 3.00 litas on a turnover of 1,600 litas.
On the current list, the shipping company LISCO was in focus in the outgoing week. Investor interest was fueled by amendments to the Law on Public Trading of Securities, on May 23. Under the amendments, companies that acquire over 50 percent of shares of a state-owned company which has been put up for privatization must announce a tender offer for the buyout of the remaining shares. Market analysts, however, have varying opinions as to whether the amendments will be applied to LISCO's investor, the Danish company DFDS Tor Line. They did not rule out the possibility that the issue could be heard in the courts, concerns which have prevented a marked increase in LISCO's share price. As a result, LISCO sank 4.6 percent to 3.10 litas in trade worth 274,900 litas. Another 42,200 litas' worth of shares changed hands through block trades.
Siauliu Bankas jumped 4.4 percent to 47 litas amid a 137,600 litas turnover; the dairy Panevezio Pienas rallied 15.4 percent to 2.02 litas in trade worth 122,300 litas; the oil concern Mazeikiu Nafta was higher by 5 percent to 0.63 litas amid a 122,400 litas turnover. Panevezio Pienas' rally was fuelled by the news that another dairy, Pieno Zvaigzdes, is asking permission to acquire up to 100 percent of shares in the Panevezys-based company.
A total of 4 million litas' worth of shares in the oil-products terminal operator Klaipedos Nafta, and 3.6 million litas' worth of shares in the confectioner Naujoji Ruta, traded via block deals.