Baltic telecom stocks resumed their downward slide, after appearing to have stabilized in a momentary respite from the relentless selling pressure they have faced, dropping by an average of 7 percent for the week. Nevertheless, gains by a number of smaller Baltic List companies prevented the index from ending lower, and the Baltic index finished at 136.61, up 0.21 percent. Losers outnumbered gainers eight to six on the Baltic List, which includes the 14 highest-capitalization blue chip Baltic stocks.
With losses in Eesti Telekom, Lietuvos Telekomas and Hansapank, the Baltic List capitalization index fell 2.6 percent to 2.27 billion euros ($2.06 billion).
The Baltic List posted a turnover of 5.9 million euros, slightly down on the previous week's trade of 6.1 million euros. Estonian stocks accounted for 72.52 percent of the total turnover, while Latvian stocks contributed 15.56 percent and Lithuanian stocks 11.92 percent. Baltic List stocks dominated stock exchange trading in Riga and Tallinn, covering over 90 percent of the turnover, while in Lithuania this figure was down at 8 percent.
Estonia: Good corporate results, but indexes down
The release of nine-month financial results by Eesti Telekom and Norma generated brief excitement on the Tallinn Stock Exchange last week, but recent world developments have added to global insecurities, unsettling investor confidence. The TALSE index reacted by falling 3.85 percent, to 120.37. The price index of the five Estonian Baltic List stocks, as calculated in euros, inched up 0.23 percent to 113.74.
Although the TALSE index is heavily influenced by Eesti Telekom's and Hansapank's price movements, the Baltic index reflects a broader selection of regional industry groups, ones that have also been delivering better earnings results.
The week's total turnover was 72.4 million kroons ($4.17 million), nearly 71 percent of which came from deals with Hansapank stock. "The week was defined by a falling trend, and results could not bring any significant change," Trigon Markets broker Kaur Elviste said. "Traders were anxious all week, as they anticipated increased option writing toward the end of the week," the broker added.
Of the most traded shares, Hansapank's and Eesti Telekom's ended down, while Norma's closed higher. Trading in Hansapank's generated the week's biggest turnover of 51 million kroons, though the share price suffered, falling 2.66 percent to 136.25 kroons. Hansapank Group will release its 9-month financial results on Oct. 23.
Of the key shares, Eesti Telekom's fell the most, by 6.84 percent to 54.50 kroons on trade of 11 million kroons. This price puts it well above the September all-time low of 43 kroons. In the analysts' opinion, Eesti Telekom's nine-month results came in as expected. Eesti Telefon showed somewhat weaker results and mobile phone operator EMT reported somewhat better results than expected.
Norma gained 4.02 percent to 49.20 kroons on a turnover of 4 million kroons. Norma's nine-month results were better than expected, based upon analysts' previous forecasts. This was due to an even higher than expected increase in sales in the West.
Latvia: German investors seek more cash for fiberglass company
Last week most of the Riga Stock Exchange's official and secondary list share prices fell. The RICI price index also dropped, by 3.3 percent to 147.39, which approaches its all-time low of recent years. The gain in shares in the gas utility Latvijas Gaze helped the Dow Jones Riga Stock Exchange index finish up, showing a gain of 1.8 percent to 182.41. The Latvian shares included in the Baltic List price index, in euros, gained 1.53 percent to 193.50.
A number of block deals with Latvijas Gaze shares increased the Riga bourse's turnover sevenfold over the previous week, to 557,844 lats ($891,124). In the credit markets, government T-bill auctions found buyers for 9.74 million lats' worth of paper.
Latvijas Gaze gained 2 percent to 6.02 lats, and it seems that the company's German shareholders are still prepared to buy the remaining shares at this level, propping up the price at least in the short term.
A turnover of more than 12,000 lats was reported with shares in the fiberglass company Valmieras Stikla Skiedra, gaining 8 percent to 0.54 lats. Latvijas Unibanka's analysts consider that the price rise was related to the decision, made by the company's German strategic investors, to increase the company's registered capital by 11 million lats.
Meanwhile, analysts at the investment bank Suprema claim that it is still too early to talk of the benefits for Valmieras SS' small shareholders on the eve of a new share issue. The small shareholder will not be negatively affected by the expected share dilution, as long as management invests the new capital in high productivity, high growth projects.
The significant price rise in Valmieras SS shares is explained by Suprema analysts as the result of existing company shareholders trying to grab as many shares as possible, but doing so under Latvia's illiquid market conditions.
Shares in the oil terminal Ventspils Nafta gained 1.35 percent to 0.75 lats. Investors, though, are still awaiting amendments to the company's final privatization terms and are uncertain as to which direction the share price will head afterward.
Most of the secondary list stocks fell subsantially last week. Among the most significant losers were the steelworks firm Liepajas Metalurgs, down 15 percent to 0.17 lats, the pharmaceuticals concern Olainfarm, down 12.5 percent to 0.07 lats and the motorchain producer Daugavpils PKR, falling 11.1 percent to 0.08 lats.
Lithuania: Blue chips lead market lower
Trade slowed on the National Stock Exchange of Lithuania in the last week, with the market reacting to negative trends on global markets. Most of the generally more liquid Lithuanian stocks ended flat to lower, dragging with them the indexes.
The bourse's continuously tracked price index Litin-10 edged down 2.52 percent to 1,013.93, the official blue chip list index Litin slid 5.26 percent to 305.03, and the broad index Litin-G ticked down 1.61 percent to 808.27. Calculated in euros, the price index of the six Lithuanian Baltic List shares fell 0.8 percent to 127.23.
Market trading volume reached 30.5 million litas ($7.62 million). On the official list, market heavyweight Lietuvos Telekomas had investors' attention. The stock dropped 7.35 percent to 1.26 litas on a turnover of 776,900 litas.
Brewer Kalnapilis bucked the trend, however, by climbing 1.86 percent to 6.01 litas in trade worth 497,300 litas. "Kalnapilis shares have become a product of fixed revenues - investors, who are waiting for the announcement of a tender offer, are buying the shares and expecting to sell them at 6.14 litas later," Martynas Kulvinskas, head of the trading securities unit at agricultural bank Zemes Ukio Bankas, said.
The Danish Brewery Group will have to announce a tender offer to buy out the outstanding shares from Kalnapilis' minority shareholders after it closes the deal with the Nordic group Baltic Beverages Holding, in which it is acquiring an 86.6 percent stake in Kalnapilis. The Danish Brewery Group will pay BBH 135.1 million litas for 86.6 percent of the shares in Kalnapilis, equal to 6.14 litas a share.
Refrigerator producer Snaige eased 1.35 percent to 36.50 litas amid a turnover of 248,100 litas, and cheese maker Rokiskio Suris drifted lower by 1.86 percent to 25.27 litas with 174,200 litas' worth of shares traded. In block trading, 759,900 litas' worth of shares in Snaige and 75,800 litas' worth of shares in Rokiskio Suris changed hands.
On the current list, Kauno Tiltai led trade in terms of turnover. The road builder jumped 3.85 percent to 135,000 litas in trade worth 1.42 million litas. In fact, Kauno Tiltai shares were traded only early in the week, and the buyer was the company itself, after it had secured the shareholders' approval to launch a buy back of 10 percent of its own shares.
The tannery Siauliu Stumbras plunged 8.82 percent to 0.31 litas on a turnover of 196,300 litas. Gas utility Lietuvos Dujos edged higher by 2.38 percent to 1.72 litas in trade worth 158,200 litas, and the shipping company Lisco Baltic Service climbed 4 percent to 0.26 litas amid a turnover of 112,300 litas.
Also in block trading, the terminal KLASCO saw 9.36 percent of its share capital change hands through a single deal for a total of 20.83 million litas on Oct. 17. The buyer paid 17.57 litas a share, well above its central market price of 4.12 litas.
Some 905,100 litas' worth of shares in electronic component maker Vilniaus Vingis, 700,300 litas' worth of shares in the gas firm Lietuvos Dujos and 905,100 litas' worth of shares in Ukio Bank changed hands via block deals.