Growing turnover in Estonian stocks, and large transactions in shares of the Latvian insurer Balta increased the Baltic List's turnover fourfold, to 17 million euros, up from 4.3 million euros a week earlier. Estonian stocks accounted for 33 percent of the total turnover, Latvian stocks for 62 percent and Lithuanian for just 5 percent. Baltic List stocks held domineering positions in all three Baltic states' home markets, securing over 80 percent of the turnover on the national bourses.
Estonia: Return from Midsummer sparks rally
Trading on the Tallinn Stock Exchange was significantly brisker during the outgoing week than prior to Midsummer, with investors' attention focused on the traditional three key issues. The stock index TALSE climbed 2.1 percent to finish at 141.63. The euro price index of the six Estonian Baltic List stocks was up 2.3 percent at 129.04. The total turnover from 480 deals was 91 million kroons ($4.93 million) as compared with 54 million kroons the previous week.
"Hansapank and Norma were picked up again and price levels moved a little higher," Uhispank trader Mart Helmja said. He added, however, that the market's activity at the beginning of July was unlikely to be as high. With a five-day turnover of 52.5 million kroons, Hansapank again was the most traded issue, accounting for more than half of the week's turnover. Hansa put on 1 percent to close at 150.05 kroons.
Eesti Telekom meanwhile rose 3.5 percent to 74 kroons, with a turnover of 24.8 million kroons. Norma rose 1.6 percent to 48.90 kroons, with 8.69 million kroons in trade.
An analysts' survey, published last week by Hansabank Markets, gave a buy recommendation to leading Estonian stocks. The survey puts Hansapank's year-end target price at 190 kroons. Buy recommendations were also given to Eesti Telekom and Norma shares. Estonian Telekom's target price is set at 140 kroons. Hansabank Markets observes that even though the firm's share of the fixed line market has dropped to 88 percent, the decline will be made up by new tariffs and a growth in dial-up services.
Latvia: Benefit from end-of-quarter housecleaning
Last week many of the low liquidity Latvian shares saw their prices higher, but analysts assert that the growth is for purely calendar reasons and believe prices will come down in early July. In Latvia, the rise in stock prices during the final days of a quarter is due to "window dressing," where investors attempt to improve their portfolio performance indicators by dumping poorly performing shares and buying companies that have showed strong gains.
The Riga Stock Exchange price index RICI rose 5.7 percent on gains by low liquidity stocks, closing the week at 159.27. The capitalization index DJRSE saw more moderate growth, climbing 0.7 percent to 141.13. The euro price index of the three Latvian stocks traded on the Baltic list edged higher by 0.9 percent, to 174.03.
Boosted by Danish Co-dan's completion of its buyout of shares in the insurer Balta, share turnover on the Riga bourse reached 5.85 million lats ($9.1 million). Some Latvian brokers believe bourse trading in Balta will be halted soon, as Codan has acquired almost 100 percent in the insurer. This situation is not likely to change, even by commitments from the Danish company to sell a large block in Balta (a total of 41 percent) to the European Bank for Reconstruction and Development and the Danish Investment Fund. It has not been ruled out, though, that Balta may remain listed on the bourse, though it would be on the second, rather than the official, list. This would be similar to the situation with Lithuania's Lietuvos Draudimas shares, which have a similar ownership structure to Balta, and is quoted on Lithuania's current list. To be quoted on the official list on the Riga bourse, the company's public share float must be at least 25 percent of issued shares.
For the remaining Latvian stocks, the turnover was extremely low. Even the oil terminal Ventspils Nafta and the gas company Latvijas Gaze did not see their weekly turnover exceed 30,000 lats. Ventspils Nafta shares stood unchanged at 0.59 lats, while Latvijas Gaze edged up slightly, by 0.2 percent to 4.01 lats. It is noteworthy that Hansapank Markets did not give buy recommendations to any Latvian stocks in its analytical review last week, saving such recommendations for Estonian and Lithuanian stocks.
Lithuania: Sluggish market may greet new government
Trading activity remained weak on the Lithuanian stock exchange, with most stocks losing ground as a government crisis resulted with the former communist Algirdas Brazauskas' return to power. On June 29, however, the market underwent an upward correction, pushing Lithuania's most liquid stocks higher. The bourse's benchmark price index LITIN-10 rose 0.2 percent to 1,027.41, the blue chip official list index LITIN ticked down 0.4 percent to 346.13, while the broader index Litin-G closed 0.2 percent higher at 909.69.
The euro price index of the six Lithuanian Baltic List stocks was up 0.2 percent to 121.40. The bourse's equity turnover reached 4.3 million litas ($1.07 million). Deals in T-bills and T-bonds were responsible for 34.2 million litas of the exchange's turnover. "The market remains passive due to negative trends on the world's stock exchanges and the passivity of local investors who lack money," Suprema broker Arvydas Jacikevicius said. On the central market, blue chip Lietuvos Telekomas was volume leader, outstripping the oil concern Mazeikiu Nafta, which is listed on the bourse's current list. Telekomas closed 0.6 percent lower at 1.55 litas in trade worth 202,000 litas. On June 28 Telekomas slid to 1.51 litas, another historic low.
Jacikevicius said it was weak demand that continued to push the stock lower. "Telekomas shares are not of great interest on the domestic market as this investment does not bear fruit immediately, while foreign investors have problems on their own markets," he added. Other analysts are more optimistic. Hansabank Markets last week gave its buy recommendation on Lietuvos Telekomas, setting the target price at 3.28 litas. The firm's results are influenced by growing demand for digital fixed lines, Internet and data services, as well as the launch of ADSL services and the growing demand for ISDN. The cheese maker Rokiskio Suris stomped ahead by 5.2 percent to 18.95 litas with 47,000 litas' worth of shares traded. In its survey Hansabank Markets was very optimistic about this company's prospects, posting its target price at 26 litas, due to a strong market outlook.
The brewer Kalnapilis slid 2.3 percent to 4.20 litas in trade worth 6,600 litas; the TV-tube maker Ekranas ended flat at 6.20 litas on a turnover of 28,800 litas. In block trading, 1.15 million litas' worth of shares in Telekomas, and 1.47 million litas' worth of shares in Ekranas changed hands. On the current list, the oil company Mazeikiu Nafta ended 2.6 percent lower at 0.73 litas amid a turnover of 201,000 litas. In line with expectations, Mazeikiu Nafta's share price stabilized after the government endorsed the agreement between the U.S. energy group Williams, the oil company's operator, and the Russian oil producer YUKOS. Statements by leaders of the leftist Social Democratic Party, which plans to form a new government after the collapse last week of the ruling coalition, prevented the price from rising higher.
The Lithuanian Shipping Company was removed from the current list under a decision of NSEL's board on June 28, since the company has ceased to exist as a juridical entity. Trade in LISCO shares was suspended on June 25. Last week LISCO split up into two companies, Lisco Baltic Service and Lietuvos Juru Laivininkyste shipping, both of which are likely to be included on NSEL's secondary current list in early July.