Baltic shares finding momentum

With global stock exchanges posting gains last week, it seemed almost obligatory that the Baltic indexes participate in the rally as well. The 14 Baltic List stocks gained 1.98 percent, ending the week at 137.33. The increase could have been larger if not for losses registered by Lithuanian issues. Gains were posted by 10 stocks, with two Lithuanian shares showing lower finishes.

With Eesti Telekom, Hansapank and Latvijas Gaze leading the way, the Baltic List capitalization index was up 3.1 percent to 2.31 billion euros ($2.06 billion). Baltic List turnover reached 9.89 million euros, almost five times the previous week's results.

Estonia's shares accounted for 50 percent of the total turnover, while Latvian stocks chipped in 41 percent and Lithuanian 9 percent. Baltic List stocks held dominating positions on their respective home country exchanges, accounting for over 75 percent of the total turnover.

Estonia: Trade heats up after slow start

Despite a decidedly blue mood prevailing at the start of the week, the situation reversed itself by Oct. 9, with trading on the Tallinn Stock Exchange dominated by Hansapank and Telekom shares. The TALSE stock index gained 4.48 percent, closing higher at 128.01. Total trading volume was 81.1 million kroons ($4.6 million) from 411 transactions. Calculated in euros, the price index of the five Estonian Baltic List shares gained 1.59 percent to 115.46.

"The week got off to a pessimistic start, there was no activity and the prices did not move much," Hansabank Markets broker Lauri Lind said. "At first it felt as if the market might go into a free fall." The broker then added, "In the second half of the week interest returned with foreign investors, who focused above all on the two most liquid shares, Hansapank and Telekom."

Shares in Hansapank climbed 3.28 percent to 141.75 kroons with a turnover of nearly 59 million kroons. Eesti Telekom rose 7.56 percent to 60.50 kroons on total trade of 13.9 million kroons.

Telekom's surging rally could end as early as next week, however, as most European investors might stop buying into the recent rally in European telecom equipment shares. This is because the U.S. financial news agency Bloomberg commented that banking shares might be a better bargain now after last week's U.S. interest rate cuts.

"In the case of smaller shares, several companies released their financial reports and most of the figures were positive, Lind offered. "Merko reacted well and the share jumped onto a rising trend."

Market buoyancy could continue into the next week as well, if foreign investors don't start to sell. At the moment, buying interest is there," he said. If foreign markets continue their recent strength, the Tallinn Stock Exchange will also move up, the trader predicted.

Latvia: Stocks gain a little strength

Last week the Latvian stock market saw increased trading activity, with most stocks gaining. The Dow Jones Riga Stock Exchange capitalization index gained 1.7 percent to 169.14, and the RICI price index gained 4.6 percent to 152.2. The index covering the three Baltic List stocks gained 2.41 percent, as calculated in euros, to 180.95.

The Riga Stock Market turnover topped 2.66 million lats ($4.23 million). Of this, the Baltic List's share was 85 percent of the turnover, or 2.29 million lats. Almost all of this was from trade in shares of the insurer Balta, constituting the sale of Danish insurer Codan's 24 percent holdings to the European Bank for Reconstruction and Development.

Trading volume of shares in Latvijas Gaze and the oil terminal Ventspils Nafta was low, with the oil terminal price unchanged at 0.72 lats. It seems investors cannot agree on a price to trade at and are awaiting any news about possible reductions in Russian oil export amounts.

News on the sale of a 3 percent state-owned stake in Latvijas Gaze, to be restricted to only private persons, with the additional condition that each individual will receive no more than 200 shares, perked the market up a bit, but this was only temporary. It seems that there are not many who believe this plan will improve liquidity in the gas company's shares, at least not in the short term.

Latvijas Gaze shares gained 1.8 percent to 5.40 lats on a turnover of only 10,000 lats. The fiberglass company Valmieras SS provided much of the week's trading turnover, at 184,554 lats, while the confectionery Staburadze saw a turnover of 30,920 lats. The shipyard Rigas KB saw trade worth 12,309 lats.

Staburadze shares are still not being traded on the main stock exchange. Valmiera SS gained 11.5 percent and Rigas KB was up 11.3 percent, with investor optimism based on company promises of dividends to be paid this year.

Lithuania: Extended week not enough to spur market

Trading activity remained lackluster on the Lithuanian stock market despite the opportunity offered investors by an extended six day work week. Snaige posted an unexpectedly strong turnover on Nov. 6, but that came from apparently pre-arranged placements and not from the overtime clocked in by brokers.

The bourse's continuously tracked price index Litin-10 firmed 1.45 percent to 1,082.52, while the blue chip official list index Litin dropped 2.92 percent to 303.26.

Calculated in euros, the price index of the six Lithuanian Baltic List stocks gained 1.98 percent to 133.74. The bourse's 6 day equity turnover reached 3.97 million litas ($992,500).

Snaige charged ahead by 5.42 percent to 37.95 litas with 1.99 million litas' worth of shares traded. All the shares, representing 3.41 percent of the refrigerator producer's authorized capital, changed hands in three deals on Nov. 6.Aurelijus Rimkus, a broker with Finasta, said the shares were sold on the central market, rather than though block trades, so as not to reveal the names of the buyer and seller. "The increased price in Snaige's shares, in my opinion, does not reflect the real sentiments of the buyers and sellers," he said.

Market heavyweight Lietuvos Telekomas ended the week 4.72 percent lower in trade worth 527,900 litas. Lietuvos Telekomas, one of the few stocks in Lithuania that react directly to events on global markets, bucked the upward trend shown by Western European telecom stocks.

Brokers say larger foreign investors have apparently abandoned the Lithuanian market, at least temporarily, while local investors do not have enough resources to support Lietuvos Telekomas' share price. Another 246,300 litas' worth of shares in Lithuania's fixed line telecommunications monopoly changed hands via block deals.

Elsewhere on the official list, Rokiskio Suris slid 3.7 percent to 28.07 litas in trade worth 134,400 litas, while brewer Kalnapilis ticked up 0.33 percent to 6.02 litas on a turnover of 80,100 litas.

On the current list, Lietuvos Dujos put on 1.14 percent to 1.78 litas in trade worth 102,800 litas. Investors' interest in the stock was fuelled by news that the country's privatization commission approved a revised program for privatization of the gas company.

If the Cabinet of Ministers endorses the program, which is for the sale of a 34 percent stake in Lietuvos Dujos to a Western strategic investor, the process could get underway next week.