Baltic shares up, but probably not for long

The largest listed Baltic companies gained last week, pushing the Baltic index to higher ground. But unless local markets are immune to greater global forces, weakness on world financial markets toward the end of the week may pressure prices at the opening bell Monday morning. The Baltic index rose 1.34 percent to 146.61 last week. Among the 14 Latvian, Lithuanian and Estonian blue chips on the Baltic List, seven moved up while the balance ended somewhat lower.

Nevertheless, substantial gains by the three most strongly capitalized stocks - Estonia's Hansapank and Eesti Telekom plus Latvia's natural gas company Latvijas Gaze - resulted in a good boost to the Baltic List capitalization, up by 3.2 percent to 2.53 billion euros ($2.26 billion).

Baltic List share turnover totalled 3.92 million euros, down two times from 7.98 million euros of the previous week. Estonian stocks contributed 85 percent of this total while Lithuanian stocks brought in 10 percent, with Latvian shares rounding up the herd at 5 percent. The Baltic List stocks led the Estonian market, generating 93 percent of total home bourse turnover. In Latvia this figure stood at 47 percent and in Lithuania only 2 percent.

Expansion minded officials at the Finnish stock exchange last week indicated their growing appetite for greater participation in the Baltics. HEX leaders met with top management of the Latvian and Lithuanian bourses over the formation of a joint Finnish-Baltic exchange alliance, one which already engages both the HEX and Tallinn Stock Exchange as members. HEX has expressed serious intentions in a published report that has Tallinn Stock Exchange Board Chairman Gert Tiivas planning to give up his responsibilities of direct management of the bourse in order to dedicate most of his time to the expansion of HEX in the Baltics.

Estonia: Holiday spirit arrives early

Investor expectations reflect a certain cheerful buoyancy, with none other than the Tallinn Stock Exchange's three traditionally strong companies as the beneficiaries of such optimism. The index TALSE put on 3.18 percent to finish at 140.96. Calculated in euros, the price index of the five Estonian Baltic List shares gained just 0.42 percent to 120.58, though, as the drop in share prices of supermarket chain Tallinna Kaubamaja put the brakes on the index's rise. In 556 deals, 55.8 million kroons' ($3.18 million) worth of securities changed hands.

"We had a relatively positive week, above all thanks to increased interest on the part of foreign investors, as compared with a few months ago," Hansabank Markets trader Lauri Lind said. "Prices moved upwards and the market was strong." He added, "the Estonian market was in correlation with the Western markets - the movements of the world markets were followed one-to-one."

Of the blue chips, Hansapank posted the largest turnover and gains. Hansapank rose 4.42 percent to 153.50 with 27.9 million kroons in turnover. "Behind Hansapank and Telekom there was buying interest from outside; locals were instead selling," the trader said. Eesti Telekom climbed 2.93 percent to 70.25 kroons on 19.9 million kroons in turnover.

"Local investors were selling Telekom and buying Norma instead," Lind said. In trade worth 3.95 million kroons, Norma firmed 1.51 percent to finish the week at 53.70 kroons.

Latvia: Exchange management props indexes in questionable listing

Trading activity on the Latvian market last week was at its usual extremely low level, with stock exchange price indexes scattering in different directions. The price index RICI dropped 3.49 percent to 149.31 over losses suffered by the majority of stocks and may soon suffer further declines in view of the stock exchange management's statement about the removal from key lists stocks of those companies which have failed to comply with the reporting requirements. Analysts at the savings bank Latvijas Krajbanka expressed their view that stocks delisted or transferred to the free list were very likely to see their share prices drop substantially and immediately.

Despite the negative dynamics of the price index RICI, the Dow Jones Riga Stock Exchange capitalization index jumped 5.25 percent to 186.05. Shares in Latvijas Gaze were up sharply for the week. Bourse turnover was 230,230 lats ($364,288).

The natural gas company Latvijas Gaze charged ahead by 8.33 percent to 6.50 lats per share. Latvijas Unibanka analysts believe that certain investors seek to increase their holdings in the company ahead of the final stage of the company's privatization.

Nevertheless, the same experts admitted that it was quite difficult to give a clear and logical explanation for the rise of Latvijas Gaze shares in view of the general opinion that their privatization price will be much lower than the current market price.

Shares in the oil terminal Ventspils Nafta slipped 1.52 percent to 0.65 lats on just 7,500 lats in trade. The low turnover indicates buyers and sellers find it difficult to agree on a fair price. Buyers are reluctant to bid higher and are content to wait for further news out of Russia about the level of oil exports and want to hear more on the coordination among oil exporting countries on world oil production levels. It should also be noted that the competing oil terminal in Butinge, Lithuania, has been closed for the last two weeks over another accidental oil spill, though the Tankerworld agency reported that the terminal may reopen as early as within the next few days.

The biggest losers were low liquidity shares such as Riga Transport Fleet, down 14.29 percent to 0.06 lats, the fish cannery Kaija, off 12.50 percent to 0.14 lats, the motor chain plant Daugavpils PKR, dropping 11.11 percent to 0.08 lats and the pharmaceuticals company Olainfarm, sinking 10 percent to 0.09 lats.

Lithuania: Little activity marks flat week

The markets reversed course, giving up some of the previous week's trading gains. Blue chip Lietuvos Telekomas and gas company Lietuvos Dujos, the traditional volume leaders, generated more than half of the central market's weekly turnover. The bourse's continuously tracked price index Litin-10 fell 0.78 percent to 1,156.12, the blue chip index Litin edged down 0.79 percent to 311.88, while the broad index Litin-G inched up 0.37 percent to 861.66.

Calculated in euros, the price index of the six Lithuanian Baltic List stocks fell 0.16 percent, ending at 142.85. The week's total equity turnover reached 49.93 million litas ($12.49 million).

Brokers explained away the losses among the most liquid shares as a natural response to the previous week's gains, that is, just some good old-fashioned profit taking.

Listed on the official list, Lietuvos Telekomas drifted 1.65 percent lower to 1.19 litas, its lowest level since late September, with 710,300 litas' worth of shares traded. With only a slight hint of voodoo stock market analysis, brokers are forecasting an inevitable rise in telecom share prices, without stating the likely date.

Dairy Rokiskio Suris eased 1.61 percent to 30.51 litas on a turnover of 580,000 litas. Some 500,000 litas' worth of shares were exchanged via a block deal at mid-week.

On the current list, the natural gas company Lietuvos Dujos climbed 5 percent to 2.10 litas in trade worth 703,300 litas. On Dec 6, Lietuvos Dujos climbed 3.94 percent to 2.11 litas, its record high for the past 52 weeks. Brokers said shares in Lietuvos Dujos, undergoing privatization, are attractive to investors who, in one way or another, intend to participate in the privatization process and are now aiming to increase their shareholdings. For local investors, however, the current share price is much too high.

Shipping company Lisco Baltic Service charged ahead 6.25 percent to 0.34 litas amid a turnover of 264,100 litas. Early in the week, the shares rallied 12.50 percent to 0.36 litas, with investors reacting positively to third-quarter corporate results - the company earned a net profit of 6.6 million litas - but shares later retreated somewhat.

Some 2,498,453 shares in Klaipeda Stevedoring Company, representing 19.72 percent of the authorized capital, changed hands for 45.39 million litas at a price of 18.17 litas per share. On the central market, the stock's share price stood at 4.50 litas.