Stock prices on the Tallinn Stock Exchange rose modestly last week amid increased trading activity. The TALSE index ended at 114.07 points, up by 1.38 percent from last Friday. Attention again was on Norma, which moved rapidly to higher levels after the publication of Hansapank's and Suprema's forecasts. Norma soared 18.38 percent to 43.80 kroons ($3.00) during the outgoing week. The turnover, at 23.9 million kroons, was the biggest of any individual share. To move higher from this level, the stocks need the support of fresh news, Alvar Roosimaa from Suprema observed. Norma's upsurge also helped Hansapank to recover some lost ground. Its shares Friday closed at 83 kroons, up by 5.73 percent from the previous week.
Optiva Bank, which last Friday moved up on the strength of rumors about the Bank of Estonia's sale of its position in Optiva, ended at 11.65 kroons, or 0.87 percent higher than the previous week. Roosimaa said investors did not take up new positions, preferring to await the publication next week of the banks' July results. The results are expected to be comparable to the previous months' numbers, he said. If Uhispank reports improved performance, this would give a nice signal to the market, Roosimaa remarked. Uhispank rose 1.16 percent to 26.60 kroons during the outgoing week with 1.4 million kroons' worth of shares changing hands.
The Saku Olletehas brewery is expected to post solid half-year results, Roosimaa observed. The going price of the brewery shares is 52 kroons. According to an earlier report by Suprema, a price of 54 kroons would be justified.
Trade in EVP privatization vouchers also picked up. Growing demand ahead of an upcoming Compensation Fund bond issue brought the price of the vouchers up to 0.33 kroons, with a turnover of 3.1 million kroons. According to forecasts, the EVPs may rise to 0.36 kroons in the near future.
The total turnover of the exchange system last week increased to 61.2 million kroons as compared with the previous week's 44.7 million kroons.
Latvian Market: Waiting for Unibanka's results
Last week's trading activity dropped on the Riga Stock Exchange, as investors are awaiting the publication of Unibanka's audited half-year results, due next week. Despite the thin trading, most shares rose. The RICI price index climbed 1.72 percent over the week to close at 167.07 on Friday. The cap-weighted DJRSE index was up 0.73 percent to 81.73 points. Unfortunately the rising prices did not tempt more investors into the market. The turnover of Unibanka - usually the leader - was just 25,000 lats ($42,373) for the week. Its price stayed put at 0.98 lats as its seven-month results were in line with expectations. Investors are waiting instead for the audited half-year results to make their moves. If the auditors confirm Unibanka's unaudited results the bank's share price could rise 2 percent to 10 percent, according to various estimates, as it currently has one of the lowest P/E ratios among Baltic or, for that matter, other Central European banks.
Unless the auditing firm PricewaterhouseCoopers requires the bank to form additional reserves, it will be taken as a very good signal for investors. If PricewaterhouseCoopers demands Unibanka to add considerably more to reserves (which currently seems unlikely), investors will likely lose faith in the bank and its share price could tumble.
The turnover of shares in Latvijas Gaze, Ventspils Nafta and Latvijas Balzams totaled between just 13,000 and 23,000 lats each last week. Latvijas Gaze's share price rose 0.59 percent to 1.71 lats in advance of payment of dividends. Shares in Latvijas Balzams jumped 3.77 percent to 0.55 lats. It cannot be ruled out that the current buyer intends to participate in the auction of the state's shares in the company in September. Despite rising oil prices and a respectable half-year showing, Ventspils Nafta's share price continued to fall. Last week on the central market it slid 2 percent to 0.49 lats. In direct deals it traded even lower, testifying to the willingness of some shareholders to get out at any price. Undoubtedly, the political and economic uncertainty in Russia is influencing Ventspils Nafta's share price. Not only is the construction of a rival port in Primosk still unclear, but the fate of Ventspils' major partner - LUKoil - remains uncertain. Major changes in LUKoil's management and shareholder composition could occur.
Turnover of shares totaled just 118,000 lats last week, down a third from the previous week. If two deals in government T-bills are included, which are now listed on the bourse, the total turnover swelled to 1.3 million lats. While this might at first appear to be a major boon to the exchange, it must be noted that trading in T-bills brings the RSE almost no revenue. On the 1.2 million lats worth of T-bills traded, the bourse earned just eight lats in commission. It is difficult to knock the appearance of a secondary T-bill market on the bourse, however. It potentially widens the market and provides public price signals. But more than two trades per week will be needed to fully realize this.
Lithuania: Ukio soars
Last week most share prices slid gently in light trading, but Ukio Bankas share price rocketed up mysteriously once again. The Litin index slid 0.6 percent to 543.36 points while the Litin-10 posted a 2.15 percent gain to 1105.05 points. "Trading was passive, the week ended as boring as it began," commented VB Vilfima broker Robertas Berzanskas to the Baltic News Service . PFM's Sigitas Petraitis agreed, noting no interesting trends. "On our small and frail market news is a rarity," he said, commenting that little is needed to spark demand of heretofore illiquid shares. Last week this was the case with Ukio Bank, with investors driving the share up 31.11 percent to 5.90 litas ($1.47) in 702,700 litas of trading on the central market. Another 553,500 litas in direct deals were concluded. Brokers are at a loss to explain the interest in the bank's shares, which periodically swing wildly. Petraitis put it down to the "uncertain mood of the market."
Trading in Vilniaus Bankas shares was also strong on the central market, with 583,300 litas in turnover. The bank's share price slipped 0.30 percent to 26.97 litas. Another 1.18 million litas in trades were conducted as direct deals. Shares in Snaige, the refrigerator manufacturer, jumped 6.34 percent to 31.37 litas on news of a possible alliance with a Danish manufacturer. Turnover totaled 166,600 litas. The biggest direct deal of the week - almost 40 million litas - was in shares in Svyturys brewery.
Turnover on the bourse totaled 89.2 million litas, but only 2.68 million litas traded on the central market. Berzanskas expects no positive developments this coming week — brokers are focusing their hopes that the next upward market move comes this autumn.