Baltic List stocks gain momentum

Bucking the world trend in stock markets, most of the shares on the
new Baltic List posted considerable gains during the first week of
the new year. The Baltic Index (BI) of Baltic List stocks posted a
4.81 percent gain, rising from 94.50 points on Thursday, December 30,
to 99.05 points on Friday. Most of the gains were recorded on Jan. 3
and 4, when the BI hit 100.62, though a correction in prices during
the rest of the week brought levels slightly lower.

The four Latvian stocks on the Baltic Index boasted the strongest
performance, rising 9.23 percent to 102.16 points. Estonian stocks
also posted a solid gain of 6.78 percent to 97.14 points, while
Lithuanian stocks slid 1.58 percent to 98.34 points. Latvian and
Lithuanian stocks on the Baltic List still remain underpriced
compared to Estonian stocks, in terms of P/E ratios.

The Estonian stocks on the Baltic List had an average price/earnings
ratio of 20 on Jan. 7, while the average for the Latvian stocks was
8.5 and the Lithuanian stocks 4.6. Estonian stocks dominated trading
among the Baltic List stocks, accounting for 87 percent of the 13.56
million euros of total turnover. Latvian stocks accounted for 7.0
percent of turnover, and Lithuanian stocks 6.0. The Estonian stocks
on the Baltic List account for 78 percent of its total market
capitalization of 2.25 billion euros. Latvian stocks account for 14.7
percent and Lithuanian stocks 7.3 percent of market capitalization.

Latvia

Most securities experts have their fingers crossed that the market
turned the corner last week. Suprema's Reinis Ceplis noted that for
the first time in a while speculators returned to the market, joining
the major buyers, attempting to profit from price changes in the
major shares.

Speculators focused on Balta insurance company, whose shares rose 30
percent last week to 6.51 euros ($6.57). The shares fluctuated by as
much as 15 percent daily under speculative pressure. The speculative
fever on Balta's shares was triggered by news that Finland's Sampo
intends to acquire a majority stake in the company in the near
future. Undoubtedly Balta's inclusion into the Baltic List helped
improve the liquidity of its shares, which often failed to trade for
weeks at a time. Due to the jump in its share price, Balta's
price/earnings ratio is now richly valued at 17, three times the
average for the other three Latvian shares on the Baltic List.

Unibanka's share price also rocketed up last week, soaring 13.13
percent to 2.21 euros. Its shares still remain underpriced compared
to Estonian banks, however. Using 1999 forecasted profit figures, it
has a P/E ratio of 8.32, compared to 18.39 for Hansapank and 18.76
for Uhispank. Both of the Riga Stock Exchange's indexes were up last
week. The DJRSE index soared 9.5 percent to 96.10 points, while the
RICI climbed 3.57 percent to 176.86 points.

Estonia

The Tallinn Stock Exchange also showed a strong performance in the
first days of the new year. Following a midweek correction, share
prices headed back upwards by the end of the week.

"In principle the week was fixed with the first day of
trading,"Hansapank trader Romer Tepper said. Although Eesti Telekom's
shares were hidden by the global flight from telecom shares at week's
end, they still finished up 10.49 percent at 7.57 euros. Hansapank's
shares also posted a strong gain of 7.83 percent to 6.82 euros.
"Hansapank is attracting even more interest now than Telekom,"noted
Tepper. He said investors are now opening positions in Hansapank,
while Telekom's share price depends strongly on foreign markets.

The Tallinn Stock Exchange's TALSE index climbed 8.66 percent for the
week to 136.38 points.

Lithuania

Lithuanian stocks on the Baltic List did not catch the same wave as
Estonian and Latvian stocks. Only Vilniaus Bank posted a gain, up
4.72 percent to 6.64 euros. Its shares are even more undervalued than
Unibanka's, showing a P/E ratio of 5.73 .

The strongly rising euro is reflected in the share prices, quoted in
euros, of the other Lithuanian stocks on the Baltic List. The euro
climbed 10.7 percent over the week against the US dollar, against
which the Lithuanian litas is pegged. The Lithuanian National Stock
Exchange's LITIN-10 price index was up 1.98 percent over the week to
1170.06 points. The blue-chip LITIN index climbed 1.60 percent to
531.86 points.

The Baltic News Service has been calculating a price index for the
joint Baltic List of blue-chip shares since its launch on Jan. 3. The
three Baltic stock exchanges plan to launch an index later in the
year. The BI is calculated each day after the close of trading, and
is reported via BNS' business newswire by about 3 p.m. Stock turnover
information and trading commentary are distributed by 6 p.m. Graphic
files are also to be available for clients through its web-site.

Launch day for the Baltic List and the BI (Jan.3) set the index's
initial value at 100 points.