Baltic index keeps rising to new heights

  • 2002-02-28
  • Boris Epsteins
Although Baltic telecom stocks failed to climb any further in the outgoing week, the Baltic index kept rising as prices for Lithuania's Snaige refrigerator producer and Estonia's Norma seat-belt manufacturer both reached record highs.

The skyward movement of the two stocks was due to promises of big dividends from 2001 results.

As a result, the Baltic index, comprising 13 Latvian, Lithuanian and Estonian blue chips, grew 1.41 percent to 157.5 points over the week despite losers outweighing gainers seven to five and one stock staying flat.

Losses by telecom stocks and Latvian energy companies were almost fully compensated by gains posted by Hansapank, Norma and Snaige. Therefore the Baltic List capitalization last week reduced only a little, by 0.4 percent to 2.79 billion euros ($2.44 billion).

The total Baltic List turnover also fell a little, to 8 million euros, compared with 9.1 million euros a week ago.

Estonian Baltic List stocks took the lead on their home bourse last week, generating over 95 percent of the total stock market turnover. In Lithuania this figure was 30 percent, and in Latvia only 11 percent.

Hansapank crosses 200 kroon line

Shares in Hansapank crossed the line of 200 kroons ($11.70) on the Tallinn Stock Exchange last week, while Norma announced its decision to pay a dividend of 6 kroons per share.

The TALSE stock index climbed 0.63 percent to 165.59 points over the week on a total turnover of 120.1 million kroons from 477 deals. Of the total turnover, 78 percent was with shares in Hansapank, and Baltic List shares contributed 96 percent, or 114.6 million kroons.

Calculated in euros, the price index of the five Estonian Baltic List shares was up 1.58 percent at 138.15 points, an all-time record.

"Shares in Hansapank continued surprisingly strongly, crossing even the magic 200 kroon line," Uhispank trader Mart Helmja said. "The trend will probably continue."

The trader said large fluctuations in the rest of the world had not had a major effect on the Estonian market.

On Feb. 21, shares in Hansapank rose briefly to 200.50 kroons, the highest closing price of the share since late October 1997. Over the week, Hansapank stocks gained 1.41 percent, closing at 198.25 kroons on a trade of 94 million kroons.

Norma also took center stage. "The firm's dividend policy, or the decision to pay 6 kroons per share was very good news," a Uhispank broker said. He acknowledged that it seemed investors had taken up their positions and would now wait for the dividends.

Shares in Norma rose 5.62 percent to 67.70 kroons, the highest closing level of the share since May 18, 1998. The turnover was 9.47 million kroons.

"Now only news about Eesti Telekom's dividend is still pending," Helmja said.

Trade with the telecom stock was modest last week, at 7.55 million kroons, and the price fell 0.99 percent to 75 kroons.

"EVP privatization vouchers strengthened a little," Helmja said. "It was not backed by any big event, simply the offer had withered away."

The price of the vouchers rose 2.31 percent to 0.71 kroons on a turnover of 2.23 million kroons.

Tallinna Kaubamaja released its financial results last week, which were somewhat poor with a relatively lukewarm reaction accordingly.

The share closed at 54.75 kroons, off 0.25 percent over the week amid 2.8 million kroons in turnover.

At the end of the week, shares in Tallinna Kulmhoone and XXL.EE will be delisted from the Tallinn Stock Exchange.

Newcomers on Latvian stock exchange

The Latvian stock market remained lethargic as usual last week. Only the expectation of a listing of new liquid stocks kindled optimism in the market players.

True to expectations by most analysts, the natural gas company Latvijas Gaze continued on a downward trend, taking with it the Dow Jones Riga Stock Exchange capitalization index, which dropped 1.28 percent to 180.56 points over the week.

The index of Latvian Baltic List stock prices in euros also moved down 1.14 percent to 240.74 points, while the RICI stock exchange price index edged up 0.62 percent to 174.44 points.

The turnover of stocks on the Riga bourse was 185,000 lats ($288,000), including 21,000 lats or just 11 percent contributed by the Baltic List stocks.

The distillery Latvijas Balzams led the central market in trade, generating a turnover of 24,000 lats in the outgoing week.

The distillery took to the fore after its largest shareholder, Russia's Soyuzplodimport, ran into problems and started seriously contemplating the possibility of moving the production of its export vodka brands - Moskovskaya and Stolichnaya - from Russia to Latvia.

This is definitely good news for Latvijas Balzams, although market players still have doubts about the prospect of a move of production to Latvia. So the distillery's stock lost 2.7 percent of its price over the week to 0.36 lats.

Block deals with shares in the Staburadze pastry company quoted on the free list brought in 115,000 lats, or large part of the remaining stock exchange turnover.

Experts believe Staburadze's shares are being redistributed among major shareholders, and with block deals it is practically impossible to establish the actual stock price.

Latvijas Gaze stock duly followed predictions, shedding 1.2 percent to 5.98 lats over the week as "cheap" shares, bought against payment in privatization vouchers at a low actual price (less than 2 lats per share), are expected to appear on the stock exchange in a month.Ventspils Nafta oil terminal also moved down 1.6 percent in the outgoing week and cost 0.62 lats per share. Uncertainty still reigns concerning Russian export policy and the sale of state-held shares in the company.

The announcement about a listing of Latvijas Krajbanka savings bank shares on the stock exchange should be seen as good news, although it is not yet known when these shares will make it to the official, or at least the second list.

Falling Telekomas and rising Snaige

Blue chip Lietuvos Telekomas and refrigerator producer Snaige were the leaders of the Lithuanian stock market in terms of trading volumes in the last week. But they moved in different directions - Telekomas lost ground for most of the week, while Snaige surged ahead to a new record high over the past 52 weeks.

Investors also showed interest in electronics firm Vilniaus Vingis, ferry operator Lisco Baltic Service and gas company Lietuvos Dujos. The share price of oil group Mazeikiu Nafta has stabilized after volatile trading last week.

The bourse's benchmark price index Litin-10 rose 0.28 percent to 1,181.13 points, the blue chip index Litin fell 2.05 percent to 338.08 points, and the broad index Litin-G gained 0.28 percent to close at 911.64 points.

Calculated in euros, the price index of the six Lithuanian Baltic List shares gained 2,74 percent to 145.87 points.

The week's total equity turnover reached 7.4 million litas ($1.9 million), with Baltic List securities trading generating 30 percent of the total, 2.2 million litas.

Listed on the official list, Telekomas advanced 1.39 percent on Feb. 18, but later started losing ground and closed at 1.32 litas, down by 4.35 percent from last week's level. Telekomas generated a turnover of 929,800 litas.

Brokers said falling demand in telecom shares was evident early in the week. Besides, following Telekomas' rally a week ago investors started taking the profits.

Moreover, the decision of the Lithuanian Competition Council to impose a fine of 2.07 million litas on Telekomas for abusing its dominant position on the Internet services market, discouraged the investors.

Snaige rocketed 12.53 percent to 45 litas, its highest level over the past 52 weeks, amid a turnover of 912,100 litas.

The stock rallied on the back of news that Snaige's management board would recommend paying dividends amounting to 12 percent of the company's authorized capital from its 2001 earnings. In the opinion of market participants, Snaige's surge offers hope that even better news about the company may arrive in the near future.

Electronics Vilniaus Vingis slid 0.43 percent to 4.68 litas on a turnover of 625,500 litas. Dairy Pieno Zvaigzdes eased 1.94 percent to 1.52 litas in trade worth 74,900 litas.

Another 175,200 litas' worth of shares in Snaige changed hands via block deals.

On the secondary current list, the shipping company Lisco Baltic Service stayed stability at 0.41 litas in trade worth 336,200 litas; the natural gas company Lietuvos Dujos drifted 4.76 percent lower to 2 litas amid a turnover of 350,100 litas. Another 119,200 litas worth of shares were sold in block trading.

Oil group Mazeikiu Nafta charged ahead 1.14 percent to 0.89 litas on a turnover of 232,300 litas. Brokers said it seemed likely that Mazeikiu Nafta would firm at 0.90 litas, a price that attracts interest from both the buying and selling side.

Also in block trading, 127,000 litas worth of shares in hardboard producer Grigiskes changed owners via block deals.