The Baltic List turnover fell by 30 percent to 6.06 million euros, down from 8.7 million euros the previous week. Estonian stocks accounted for 90.92 percent of the total Baltic List turnover, Lithuanian ones 7.06 percent, and Latvian stocks just 2.02 percent. The share of the list's turnover from Latvian stocks has been virtually invisible for the third consecutive week.
The Baltic List stocks held a commanding share on the Estonian bourse, accounting for 94 percent of that exchange's weekly stock turnover. In Latvia the indicator was 83 percent and in Lithuania 27 percent.
Estonia: Telekom's losses depress overall market
The Tallinn Stock Exchange moved downward last week as Eesti Telekom shares lost 6 percent. The TALSE index shed 2.43 percent to end at 125.19. Calculated in euros, the price index of the five Estonian Baltic List stocks fell 0.92 percent, to 113.48. The bourse's turnover totaled 92.1 million kroons ($5.32 million), in which 58 percent came from deals with Hansapank shares. Hansapank ended the week 0.90 percent lower at 139.98 kroons, generating 53.1 million kroons in volume.
"The price of the Hansapank share stayed locked for most of the time, and at around 140 kroons there were both buyers and sellers," Trigon Markets dealer Kristel Kivinurm said. "During the entire week solid turnovers were made at the 140 kroon level."
Despite its share price stability, Estonian analysts still predict a substantially smaller third quarter profit for the Hansabank Group, compared with the record 504 million kroons recorded in the second quarter. Veiko Maripuu, chief analyst with the investment bank Suprema, said their forecast of Hansabank's third quarter net profit is 385 million kroons, bringing the total for the first nine months to 1.3 billion kroons. "There are several factors why the profit figure is bound to be smaller than the previous quarter's," Maripuu said. "Provisions will for sure play a bigger role in the third quarter than in the earlier period, plus there's the cost of goodwill amortization connected with the takeover of Taupomasis Bankas."
Maripuu observed that even though the market continued growing at a good pace in both deposits and loans in the third quarter, which would bring the bank additional income from interest, Hansabank's expenses will likely have grown as well. "Considering that Hansabank's staff doubled in the merger with TB, this is sure to bring additional expenses and reduce margins," he said.
Uhispank analyst Sander Danil said Hansabank's profit in the third quarter should remain at more or less the same level as the first quarter figure, or approximately 420-440 million kroons. "I think Hansabank's growth in Estonia has slowed, this can be seen from Bank of Estonia's statistics as well. At the same time, we're expecting faster growth in Latvia and Lithuania," he said. The Hansabank Group will release third quarter results on Oct. 23.
Eesti Telekom dropped 6.4 percent to 58.50 kroons on trade worth 28.1 million kroons. "Telekom was relatively volatile throughout the week, toward the end of the week speculative money began to pull out," Kivinurm said.
According to forecasts from leading analysts in Estonia, Eesti Telekom's nine month profit should reach 705-725 million kroons. The telecommunications operator will publish its nine month results on October 18.
"The Saku brewery released third quarter sales figures which came up to expectations, and the price of the share inched up amid modest turnover," Kivinurm said. According to data on Estonian beer makers, Saku Olletehas captured a record market share of 50 percent in the third quarter. The share posted gains of 3.52 percent for the week, finishing at 58.75 kroons amid trade worth 0.87 million kroons.
Latvia: Equity trading levels soft
Trading activity on the Riga Stock Exchange was low during the week with share prices seeing only minor changes. The capitalization index DJRSE dropped 0.07 percent to 179.13 while the price index RICI edged up 0.51 percent to 152.39. The Latvian index of its Baltic List stocks, calculated in euros, gained 0.77 percent to 190.52.
Market turnover fell 25 percent to 83,668 lats ($133,655); of this total, the gas company Latvijas Gaze accounted for some 79 percent, or 66,072 lats. Government debt securities sales brought in 10 million lats.
Although Latvijas Gaze still is the most popular stock to trade on the bourse, its price is both chaotic and unpredictable. The gas company's share fluctuated between 5 lats and 6 lats, closing the week at 5.9 lats, down just 0.34 percent from its Oct. 5 closing price. It is difficult to speak of any trends concerning the company's stock amid just 13,000 lats in daily turnover, though there is no shortage of news about the company.
For example, it was revealed last week that the company wants 5 million lats in damages from the Latvian state as compensation for the groundless restriction imposed on gas tariffs it can charge large customers. The Latvian government may find it hard to repay such a sum, if required to do so, because of an already high budget deficit, therefore it, quite likely, will try to reach a compromise with Latvijas Gaze's shareholders.
One possible solution could be to sell the remaining 3 percent of shares in Latvijas Gaze that the state still owns to German shareholders Ruhrgas and E.ON Energie, at a price of 6 lats per share, which is the stock's current market price. Reaction by the gas company's Russian shareholders Gazprom and Itera, which together control over half of the company's capital, is not known at this time.
It cannot be ruled out, though, that Latvijas Gaze shares will be sold for privatization vouchers or at a cash auction, taking into account the poor situation of the Latvian state budget.
For other Latvian stocks the average daily turnover did not exceed 1,000 lats. The only noteworthy story was the 4.2 percent gain by the fiberglass company Valmieras Stikla Skiedra, to 0.5 lats per share, on a government promise to grant tax reductions for the company.
Lithuania: Major shares trade higher on strong global sentiment
Lithuanian blue chips closed mainly higher in brisk trade on the National Stock Exchange of Lithuania, pulling the bourse's major indexes to higher levels. The bourse's continuously tracked price index Litin-10 rose 2.39 percent to 1,040.15, the blue chip official list index Litin climbed 6.77 percent to 321.95, and the broad index Litin-G was up 2.17 percent to 821.47. Calculated in euros, the price index of the six Lithuanian Baltic List stocks closed Oct. 12 at 128.26, 10.47 percent higher for the week.
The week's equity turnover reached 5.68 million litas ($1.42 million). Government debt securities offerings generated 1.59 million litas for the state.
Brokers said general trends on the bourse are not bad, but investors generally focus their attention on only a few stocks, so weak interest in other stocks leads to their low liquidity.
On the central market, blue chip Lietuvos Telekomas, found on the official list, led trading volume. Its share price jumped 6.25 percent to 1.36 litas on a turnover of 581,200 litas. The week's closing price was Telekomas' highest since Aug. 29. Brokers attributed the increased activity in telecom shares to favorable trends surrounding telecommunications companies on global markets, the result of greater interest from larger investors. However, further prospects for Telekomas' shares are rather gloomy.
"With the price going up, there are a growing number of investors who have acquired telecom shares at lower prices and are now willing to take profits. Besides, Telekomas' share price will largely depend on global trends," Arvydas Jacikevicius, a broker with Suprema, reported to BNS.
Another 177,800 litas' worth of shares in Telekomas changed hands via block trades.
Brewer Kalnapilis stole the spotlight on October 8, with the announcement that the Danish brewery group Bryggerigruppen acquired 86.6 percent of shares in Kalnapilis for 135.1 million litas, or 6.14 litas per share. The Danish company said it would make a tender offer for Kalnapilis' remaining shares at 6.14 litas per share, the same price it paid the Nordic group BBH for the majority stake. Over the week, Kalnapilis surged by 25.63 percent to 5.90 litas amid a turnover of 316,000 litas.
Cheese maker Rokiskio Suris shot up 10 percent to 25.75 litas with 164,200 litas' worth of shares traded; refrigerator maker Snaige slid 3.9 percent to 37 litas with 155,300 litas' worth of shares traded. Another 164,000 litas' worth of shares in Snaige changed hands through block trades.
Lithuanian TV-tube maker Ekranas shed 4.25 percent to 4.50 litas over the week as it posted substantially lower profits for the year. Ekranas posted an unaudited net profit of 29.8 million litas for the first nine months of this year, a decline of 33.9 percent from the same period last year.
Still, company management is playing down the worsening performance results, saying that the company's operations remain stable and that the comparison between 2001 and 2000 does not reflect the real situation. "The year 2000 was a fantastic year for us, a year that occurs perhaps once in a century," company representative Angelija Zokaitiene said. "A comparison to earlier years would make the current year results look entirely different."
On the current list, the gas utility Lietuvos Dujos edged 0.6 percent higher to 1.68 litas in trade worth 118,800 litas; the pharmaceuticals company Sanitas firmed at 2.20 litas in trade worth 69,000 litas.
On October 9, trading in the electronic component producer Vilniaus Vingis was resumed after a two week suspension due to an authorized capital reduction. During the week the stock plunged 13.58 percent to 3.50 litas, a drop which reflects the new, reduced capital base, in trade worth 47,100 litas. Another 2.71 million litas' worth of shares in Vilniaus Vingis changed hands via block deals.