Latvian shares drag Baltic index downward

  • 2002-03-14
  • Boris Epsteins
Despite gains by most Lithuanian and Estonian stocks last week, a drop in the price of the two Latvian Baltic List shares caused the Baltic index to close down 0.51 percent last week at 157.15 points.

Despite a fall of over 8 percent for the gas utility Latvijas Gaze, gains in Estonian stock capitalization kept the Baltic List capitalization flat at 2.85 billion euros ($2.49 billion).

Trade on Estonia's stock market fell considerably last week, with turnover halved to 3.8 million euros. Estonia's Baltic List stocks kept dominant positions in trade, covering 94 percent of the total turnover, while in Lithuania this figure was 25 percent.

The nightmare scenario may become a reality. Now a small branch of the Finnish HEX bourse, the Tallinn bourse could suffer heavily, losing a large part of its turnover. And trade was already thin on the Tallinn bourse during the last week.

Still, a positive note came with the bigger than anticipated GDP in the fourth quarter of 2001.

The TALSE index gained 1.5 percent during the week to finish at 174.32. Calculated in euros, the price index of the Estonian Baltic List stocks gained 1.46 percent to reach 146.28 points.

The aggregate turnover from 421 deals came to just 57.6 million kroons ($3.23 million). Baltic List shares contributed 94 percent of this turnover, at 54.2 million kroons.

"It was a relatively dull week. There were no bigger movements," Uhispank broker Mart Helmja said.

"The anticipated downward correction hasn't yet arrived," he observed. "The market holds steady even if there's no turnover."

Shrinking turnovers are, however, a signal of danger, the broker noted.

Hansapank continued as leader in terms of turnover, generating 34.5 million kroons. The share climbed 1.35 percent during the week, finishing at 211.23 kroons.

It was followed by Norma (up 1.09 percent to 72.60 kroons) and Eesti Telekom (up 2.06 percent to 77.45 kroons) with 10.7 million and 6.6 million kroons in turnover, respectively.

The statistical office released preliminary data on fourth-quarter GDP on March 6, which showed a year-on-year growth of 5.5 percent.

Helmja said the figure was a positive surprise, infusing faith in Estonia doing well.

Last week Latvia's Baltic List stocks, Latvijas Gaze gas utility and Ventspils Nafta oil terminal, fell in value, causing most of the Latvian bourse indexes to fall.

The Dow Jones Riga Stock Exchange capitalization index fell 6.5 percent over the week to 168.52 points. The Latvian euro price Baltic Index slipped a further 7.35 percent to 222.81 points.

Meanwhile, the RICI price index managed to gain 1.75 percent to 178.22 points, thanks to gains in the number of low-liquidity second list stocks.

The aggregate turnover last week was 111,180 lats ($174,811). The rise in turnover was covered by block deals with confectionery Staburadze shares, listed outside the Riga Stock Exchange's main lists.

The Latvian Baltic List turnover last week produced 29,119 lats, making up only 26 percent of the total turnover.

Last week Latvijas Gaze's share prices fell 8.2 percent to 5.50 lats, with the company's stock turnover on 23,754 lats. The main reason for Latvijas Gaze shares to continue falling is still an expected flood of cheap stocks as soon as a public offering for 32 percent of the company in exchange for privatization vouchers is over.

Experts also add that Latvijas Gaze shares are still overvalued when looking at company profit forecasts.

The oil terminal Ventspils Nafta shares drooped 3.27 percent last week to 0.59 lats, on a small turnover of 5,365 lats. Last week's announcement of a fall in oil product handling amounts through the port of Ventspils was no surprise to anyone.

Ventspils Nafta shares are also still shadowed by a lack of clarity in the privatization of the remaining state-owned stake.

The blue chip electronics firm Vilniaus Vingis led trading in terms of volume on the Lithuanian stock exchange, and emerged as the only stock to generate a turnover of over 1 million litas ($255, 100).

Listed on the official list, the electronics firm Vilniaus Vingis slid 2.15 percent to 4.55 litas in trade worth 1.02 million litas. Another 337,500 litas' worth of shares changed hands via block trades.

Still brokers said investors' interest in the stock remained strong despite a lack of fresh news about the electronics company.

The bourse's benchmark price index Litin-10 rose 0.23 percent to 1179.37 points; the blue chip index Litin was up 1.33 percent to 340.23 points; while the broad index Litin-G edged 2.36 percent higher to 959.37 points.

Calculated in euros, the price index of Lithuania's Baltic List stocks gained 1,69 percent to 144.33 points over the week.

The week's equity turnover reached 4.45 million litas, with Baltic List trading generating 910,000 litas, 20 percent of the total.

Investors also showed interest in shipping stocks and the refrigerator maker Snaige. It soared 6.64 percent to 45 litas, a record high over the past 52 weeks, in trade worth 359,000 litas.

On March 8 alone, Snaige generated a turnover of 233,000 litas.