Baltic markets down, mirroring global trends

  • 2001-06-21
A majority of the most highly capitalized Baltic stocks fell last week, influenced by similar trends on world markets. The Baltic index fell 1.5 percent, to 132.78. Loosers outnumbered gainers 10 to three on the Baltic List, with Estonia's Merko Ehitus and Tallinna Kaubamaja shares unchanged. The local Latvian and Lithuanian indexes were affected by the rising euro exchange rate against their currencies; however, this was not the dominating factor during the week.

The fall in highly capitalized Hansapank, Eesti Telekom and Lietuvos Telekomas shares resulted in a drop in the overall capitalization of the Baltic List by 4.9 percent, to 2.57 billion euros ($2.21 billion). Turnover of Baltic List stocks fell to 5.1 million euros. Estonian Baltic List stocks produced 90 percent of the turnover, while Lithuanian stocks held 6 percent and Latvian 4 percent of the total.

Baltic List stocks held dominating positions on the Estonain and Latvian markets, generating over 80 percent of the local bourse turnover. In Lithuania this was only 7 percent.

Estonia: Investors cash in on profits

Trade was subdued on the Tallinn bourse in the outgoing week, with Hansapank and Telekom, both of which moved down, being the focus of attention. The stock index dropped a marked 4.9 percent to close at 138.84, damaging all hopes of a quick recovery. The price euro index of the six Estonian Baltic List stocks was off 2 percent, to 125.61 points. The turnover from 649 deals totaled 85.2 million kroons ($4.7 million), almost unchanged from the preceeding week's activity. Preatoni Bank broker Denis Kolomenski said the five days' trade crushed all hopes of the market finding support. The week was undoubtedly an unpleasant one for investors, reminding them that summer has arrived, he observed. The most-traded issue was Hansapank, with 44.3 million kroons in turnover. The share finished 6.5 percent lower, at 149.50 kroons. Brokers attribute the downfall to the weakness in the major global markets, as well as to profit-taking by local investors.

The tech-heavy U.S. Nasdaq, especially hard hit by pessimistic company forecasts, slumped 8.4 percent for the week ending June 15 to 2028.43, while the blue chip Dow Jones industrials slid 3.2 perent to 10,623.24. "Wall Street was adrift on a sea of troubles," said one American broker about the current market situation.

As for Estonia's contribution, "It also can be said that on the strength of the last few months' rise, local investors have started to take out profit little by little, primarily in Hansa, of course, which has been climbing quite fast over the past month," Lind observed.

Estonian Telekom fell 5.3 percent to 71.50 kroons in deals worth 19.33 million kroons. The stock was mainly guided by quite active movements of the Nasdaq and the Finnish stock exchanges.

Latvia: Gains by Latvijas Gaze support market

Last week gains by Latvijas Gaze shares were just about the only good news on the Latvian stock market, with the most highly capitalized company shares falling, in both Latvian and neighboring markets. The Dow Jones Riga Stock Exchange index gained 0.8 percent, to 139.73, while the price index RICI gained 0.2 percent to 156.89. The three Latvian stocks making up the Latvian Baltic List index fell 0.4 percent to 171.4. The fall in the Baltic List euro index was mainly due to gains by the euro against the Latvian national currency. Share turnover on the market was only 140,000 lats ($218,750). Due to deals with government bonds, total exchange turnover reached 5.5 million lats for the week.

The uncontested market leader was Latvijas Gaze, gaining 2.6 percent to 3.98 lats, with turnover reaching 80,000 lats. Suprema analyst Reinis Ceplis claims that if any investor is thinking of buying Latvian shares, the first choice will be Latvijas Gaze, which is also expected to soon pay out dividends.

Last week the Latvian Privatization Agency set the date of June 19 for auctioning off 2 percent, out of its 8 percent, state owned Latvijas Gaze shares. The initial auction price will not be lower than 3.58 lats a piece, though it could reach 4 lats a share.

The oil terminal Ventspils Nafta had a less successful week, down 1.7 percent to 0.59 lats on a turnover of 30,000 lats. Reports repeatedly confirmed that the first round of construction at Russia's new Primorsk terminal will be completed this year, and the terminal's capacity will increase to 18 million tons a year by 2002, almost equal to Ventspils' capacity. Even though Russia's Transneft claimed that there will be enough oil for both Ventspils and Primorsk, it's clear that the Russian terminal will get the first shot at the oil. The Lithuania terminal Mazeikiu Nafta, having concluded an agreement with Russia's Yukos, is now assured of a secure supply of oil, but it is still unclear if Ventspils will benefit from this deal. Thus, analysts see a considerable risk in holding shares in Ventspils Nafta.

Lithuania: Telekomas down again to new low

Trading remained sluggish on the Lithuanian stock exchange in the outgoing week, with only blue chip Lietuvos Telekomas generating a relatively large equity turnover, though it closed at its lowest level in its one-year history on the bourse. The bourse's benchmark price index Litin-10 edged down 1.2 percent to 1,018.45, the blue chip official list index Litin closed 2.6 percent lower, to 360.92, and the broad index Litin-G was off 0.8 percent to 909.78. The price euro index of the six Lithuanian Baltic List stocks was off 1.7 percent to 120.82. The bourse's equity turnover reached 15.6 million litas ($3.9 million). Bourse T-bill trading added 28.6 million litas to the overall volume.

Listed on the official list, Lietuvos Telekomas closed amid a turnover of 356,400 litas. All through the week Telekomas held steady at 1.70 litas, but on June 15 it slid 4 percent to 1.64 litas, its all-time record low. Brokers said the lower price fuelled demand before the weekend and expect the stock to partly recover next week.

The TV-tube manufacturer Ekranas climbed 3.3 percent to 6.20 litas amid a turnover of 34,600 litas as the Lithuanian Securities Commission registered its upcoming new equity issue, amid controversy. Following the placement of the issue, Ekranas' authorized capital will increase from 151 million litas to 174 million litas, as the company will issue up to 4.6 million shares worth about 23 million litas. This is without granting pre-emption rights to existing shareholders, which would allow them the first rights to buy the shares from the new issue. The decision to place a new share issue was made at the shareholders' meeting on April 27. The company's minority shareholder, the investment fund NSEL 30 Index Fund, holding 0.07 percent of shares, filed a claim against Ekranas for its decision in the Panevezys' town court. The first court hearing is scheduled for June 21.

The brewer Kalnapilis jumped 2.3 percent to 4.30 litas with 46,400 litas' worth of shares traded, and the refrigerator producer Snaige was off 2.8 percent in trade worth 25,800 litas. The cheese maker Rokiskio Suris closed flat at 18 litas on a turnover of 3,500 litas; shares in the knitwear producer Utenos Trikotazas were not traded during the week.

On the current list, the shipping company LISCO slumped 10 percent to 2.70 litas amid a turnover of 76,400 litas. On June 22 the securities comission will announce its decision whether, under the amendments to the Law on Public Trading in Securities, the Danish company DFDS Tor Line should announce a tender offer for the buyout of shares of minority shareholders.

The electronic component maker Vilniaus Vingis rose 1.9 percent to 4.70 litas with 71,500 litas' worth of shares traded. The oil concern Mazeikiu Nafta closed 3.3 percent higher at 0.62 litas in trade worth 48,400 litas, though the national stock exchange suspended trading on June 15 in the oil company's shares. Trading in Mazeikiu Nafta's shares was suspended on the back of news that the U.S. company Williams International, operator of the Lithuanian oil concern Mazeikiu Nafta, and the Russian oil company YUKOS, agreed on long-term oil supplies as well as on the possibility of the Russian company becoming one of the major shareholders in Mazeikiu Nafta. The good news for Mazeikiu Nafta is that following the government's approval of the agreement, Lithuania may start negotiations with the European Bank for Reconstruction and Development over modernization of the oil company's operations.

The gas company Lietuvos Dujos slid 2.1 percent to 1.40 litas on a turnover of 42,600 litas; the savings bank Lietuvos Taupomasis Bankas edged down 1.02 percent to 9.75 litas amid a turnover of 26,900 litas; the dairy Pieno Zvaigzdes soared 6.8 percent to 1.40 litas with 23,000 litas' worth of shares traded.

In block trading, 13.72 million litas' worth of shares in the bank Snoras changed hands, what allegedly could be a repurchase deal, as no major changes in the shareholder structure was announced.