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Although stocks like Hansapank and the oil terminal Ventspils Nafta fell sharply, the Baltic index held steady, staying above 122 points, not only on large gains by Latvijas Gaze but also on gains by several Estonian and Lithuanian stocks. Moreover, Eesti Telekom, unchanged for the week, contributed to market stability.
Losers outnumbered gainers eight to six on the Baltic List of blue chips. The sharp fall by Hansapank pulled down the Baltic List capitalization by 2.7 percent to 2.14 billion euros ($1.97 billion).
The Baltic List turnover last week decreased to 13.2 million euros, down from 18.1 million euros in the previous week.
Lithuanian stocks contributed 56 percent of the total turnover thanks to transactions selling stocks in the refrigerator maker Snaige, while Estonian stocks accounted for 40 percent of the trade and Latvian shares just 4 percent.
The Baltic List stocks dominated trade on the home bourses in Estonia, Latvia and Lithuania securing over 80 percent of their turnovers.
Estonia: Stock market pushed down by external forces
Estonian investors focused on world events last week as world stock markets continued to fall, and the Swedish majority owners of Hansapank and Uhispank - Swedbank and Skandinaviska Enskilda Banken - announced they were breaking off their planned merger.
The stock index closed 3.7 percent lower at 110.73. Calculated in euros, the price index of the six Estonian Baltic List shares was off 0.5 percent, to 108.13.
The aggregate turnover generated in the five days was 88.2 million kroons ($5.19 million).
"Let's hope few investors were misled by the strength of the market in the middle of the week, it'll take time for the world economic situation to settle and rosy scenarios will be delayed," Uhispank trader Mart Helmja said.
The broker said political news and the unfolding of events in the United States would remain the focus of attention. "The decision of SEB and Swedbank to scrap their merger did not directly affect the price of Hansapank shares but rather indicated the price of those banks' shares," he observed.
"Investors who wanted to earn a premium had to change their strategies," Helmja said.
Hansapank tumbled 7.7 percent to 131 kroons amid trade worth 63 million kroons, which accounted for 72 percent of the bourse's aggregate turnover.
The car-safety equipment maker Norma ended 6 percent lower at 3.20 kroons on a turnover of 4.37 million kroons. Helmja believes Norma just followed the market trend, set by Hansapank.
Eesti Telekom meanwhile closed flat at 45.75 kroons in deals worth 11.9 million kroons as most traders believe the stock is already close to its bottom line.
Another good sign for the market is that the Estonian stock options are showing signs of life and most investors are bullish.
Part Kivaste, derivatives specialist with Hansabank Markets, told BNS that recent stock price movements have induced investors to make more option deals. "Mostly bullish options are taken on key stocks for both the short and medium term. At the start of the month bearish moods prevailed," he said.
In Kivaste's opinion, investor activity is to some degree curbed by the unsettled international situation, but, on the other hand, this creates a potential for further stock price movements, which is what option buyers want to see.
Latvia: Surprizingly stable
The Latvian stock market continued to surprise with stability against the backdrop of sharp falls posted by the world's stock indexes.
The capitalization index DJRSE stayed almost unchanged at 163.65, down just 0.07 percent, while the price index RICI jumped 0.6 percent to 150.39.
The euro price index of the three Latvian stocks traded on the Baltic List lost 0.5 percent to 130.86.
The stock market turnover reached 362,340 lats ($585,363).
The oil terminal Ventspils Nafta slumped 8.9 percent to 0.72 lats, mainly on negative factors on the world oil market tempered by concerns about the global economic slowdown.
Moreover, during last week news was spread about the oil terminal in Primorsk, Russia, being commissioned. Its capacities are significantly higher than those of Ventspils Nafta. This, of course, was not good news for current and potential investors in Ventspils Nafta.
But analysts at the savings bank Latvijas Krajbanka believe there is little sense in making any forecasts about the impact of the latest developments in Russia or from the current global financial situation on Ventspils Nafta.
Losses by Ventspils Nafta shares in the index were fully compensated by gains in Latvijas Gaze shares, which rose 4 percent, to 5.2 lats.
Latvijas Unibanka analysts believe the gas company's stocks at this point are being bought by investors that previously sold the stocks in the 8 lat to 11 lat per share range and now believe the current price at 5 lats per share is advantageous for them.
Analysts from Suprema Investment Bank meanwhile said the outcome of the legal proceeding between the company and the Latvian government on the maximum tariff for industrial consumers will leave a large impact on the company's share price.
Suprema said that in the event the gas company received a favorable outcome, it would have the possibility to raise its profitability significantly, while in case the government prevailed, the problems of Latvijas Gaze would have a negative effect on Latvia's economy in the longer term.
As could be expected, the fact that the Danish insurer group Codan sold 48 percent of shares in the insurance company Balta to the European Bank for Reconstruction and Development and the Danish investment fund did not increase the company's liquidity, the shares saw no trade at all during the last week.
Meanwhile, a major market development concerns the confectionary Staburadze, whose share trade was suspended for an indefinite period. The official reason behind the suspension was a court ruling ordering the freezing of company assets and the arrest of its largest shareholders, among them Icelandic and Latvian citizens.
The conflict around Staburadze has been growing for some time and at this point there is no clarity about either the company's financial situation or its ownership structure.
Before the suspension, the stock slid to 0.21 lats per share, which means it has lost almost 75 percent of its value since the beginning of the year.
Numerous analysts today are drawing parallels between the problems of Staburadze and those of Estonia's real estate company Pro Kapital. The reputation of Pro Kapital's majority owner Ernesto Preatoni carries with it little distinction from that of Gisli Reynisson's, the owner of a controlling stake in Staburadze. The two are similar in their negligent attitude toward the rights of minority shareholders.
Lithuania: Telekomas reverses downward trend
Downward trends dominated the Lithuanian stock market in the outgoing week. Blue chip Lietuvos Telekomas, which seems to be the only stock to have reacted to moves on the global markets in the aftermath of the terrorist attacks in the United States, bucked the trend by ending lower amid large trading volumes.
The bourse's benchmark price index Litin-10 was off 0.8 percent to 1,003.10, the blue chip official list index Litin fell 2 percent to 274.81, and the broad index Litin-G ticked up 2.1 percent to 757.29.
Calculated in euros, the price index of the six Lithuanian Baltic List shares was flat at 112.02.
The bourse's equity trading turnover reached 29.72 million litas ($7.43 million).
Listed on the official list, Lietuvos Telekomas fell 2.6 percent to 1.12 litas on a turnover of 548,500 litas. Early in the week, the stock edged down to 1.06 litas but later recovered most of the losses.
Refrigerator maker Snaige closed 4.1 percent higher at 38 litas on a turnover of 88,700 litas. As much as 26.3 million litas' worth of shares changed hands via block trades in the beginning of the week.
Some 21.1 percent of shares in Snaige were acquired by the local company Snavesta, controlled by the fund management company Hermis Fondu Valdymas. Snavesta bought the shares from Baltic Investment Fund through a single block trade and boosted its stake to 35 percent.
The buyer paid 40 litas per share, with a nominal value of 15 litas each. A total of 325,020 shares traded for 13 million litas. Another 323,020 shares in Snaige were sold at the same price via two other block deals.
Aurelijus Rimkus, broker with the financial brokerage company Finasta, described the two block trades as purely technical ones, by which two smaller stakes were joined into one larger stake.
Some 319,800 litas' worth of shares in Snaige changed hands via three smaller block deals. The buyer paid 41 litas per share.
"Hermis Fondu Valdymas expressed its intention to go on buying Snaige's shares, therefore their price should not be falling in the near future. I think, it should range between 36 and 38 litas," Rimkus said.
Cheese maker Rokiskio Suris rose 4.9 percent to 23.10 litas amid a turnover of 850,500 litas. Another 158,900 litas' worth of shares in the cheese maker changed hands via block deals.
Brewer Kalnapilis inched down 0.2 percent to 4.20 litas with 125,000 litas' worth of shares traded. TV-tube producer Ekranas sank 7.4 percent to 5 litas in trade worth 11,800 litas following reports about the company's worsening operating results. Ekranas said its net profit for the first eight months of this year declined by 27.4 percent year-on-year, with sales down by 8.4 percent.
On the current list, the gas utility Lietuvos Dujos jumped 2.5 percent to 1.62 litas in trade worth 80,300 litas.