Baltic telecom stocks follow opposite trends

  • 2002-10-03
  • Boris Epsteins
Prices of the most liquid Baltic stocks saw only marginal movement last week, prompting only slight changes in the three bourses' indexes..

Estonia's fixed-line telephone provider Eesti Telekom rose in line with global trends, while Lithuania's Lietuvos Telekomas continued a downward slide.

Last week was one of the slowest in recent months in terms of trading activity.

The Baltic Index of 14 Estonian, Latvian and Lithuanian blue chip stocks finished up 0.48 percent to 162.03 points over the week as gainers outnumbered losers seven to five. Two stocks remained flat.

Gains by Estonia's most highly capitalized stocks last week pushed the Baltic List capitalization up 0.37 percent to 2.70 billion euros.

Extremely light trade pushed the Baltic List weekly turnover down to 1.13 billion euros. Estonian stocks contributed 73.5 percent of the weekly turnover, Lithuanian stocks brought in 18.5 percent and Latvian stocks 8 percent.

Beginning Oct. 1 Lithuanian electronics company Vilniaus Vingis will become the 15th stock on the Baltic List. The number of stocks representing the technology sector - IT, communications, electronics - on the list will grow to four.

It should be noted that the technology sector's position on the Baltic stock markets could be reinforced further when Latvian telephone company Lattelekom is added to the list.

Latvian Transportation Minister Anatolijs Gorbunovs last week said the court dispute between the Latvian government and the Scandinavian shareholder Tilts Communication over privatization could be solved soon, which is likely to speed up the privatization of the state-held stake in Lattelekom and the company's listing on the stock exchange.

Last week saw the lowest weekly turnover this year on the Tallinn bourse. EVP privatization vouchers, meanwhile, hit an all-time high.

"The Estonian market did not go along with the seesawing of European and U.S. markets as players here wanted to see what direction global markets were going to take," said LHV trader Alo Vallikivi

The TALSE index ended the week 0.92 percent higher at 173.02 points and the price index of Estonia's Baltic List stocks gained 0.78 percent to 152.61 points.

The turnover from 238 deals totaled just 17.3 million kroons (1.1 million euros), of which 62 percent was generated in deals with Hansapank shares. Baltic List stocks were responsible for 87 percent of turnover.

EVP privatization vouchers passed the 0.90 kroon mark during the week, hitting a record high of 0.9075 kroons. The security finished up 3.05 percent at 0.8981 kroons on 540,00 kroons in turnover.

Hansapank led the trading, generating 10.7 million kroons over the five days. The share inched up 0.56 percent during the week and closed at 197.93 kroons.

Eesti Telekom found some support in European and U.S. markets, gaining 1.97 percent to 73.07 points on 3.06 million kroons in turnover.

Trade on the Latvian stock market was flat last week and prices remained fairly stable.

The Riga bourse price index RICI, based on official and second list stock prices, dropped 1.32 percent to 202.39 points.

The DJRSE capitalization index, influenced mostly by three official list stocks, inched up 0.2 percent to 164.92 points last week. The index of Latvia's Baltic List stocks, based on the same three stocks, finished 0.76 percent higher at 182.26 points.

The weekly stock turnover totaled 90,500 lats (150,000 euros), a 30 percent increase compared with the previous week. Latvia's Baltic List stocks contributed 70 percent of the turnover.

The oil terminal Ventspils Nafta was the only major stock to finish the week down, sliding 1.66 percent to 0.59 lats on trade of 5,300 lats.

Ventspils Nafta investors have reportedly grown weary awaiting word on the possible sale of a controlling stake in the company to an unnamed Russian oil firm.

The list of potential buyers is growing shorter as Russia's LUKoil is almost certain to give up on Ventspils Nafta after failing to acquire an oil refinery and chain of gas filling stations in Poland. Without this acquisition, Ventspils Nafta has lost much of its value in LUKoil's eyes.

The gas supplier Latvijas Gaze last week remained unchanged at 5.13 lats on a turnover of 34,000 lats. The company is continuing to pressure regulators. Latvijas Gaze submitted a new tariff-hike proposal that was nearly identical to a previous proposal that was turned down.

The issue will likely now be laid to rest until after parliamentary elections on Oct. 5.

Shares in the Latvian Shipping Company jumped 3.45 percent to 0.30 lats last week, generating 23,250 lats in trade.

The decision of the Cyprus-registered company Fernadero to drop a court case that challenged the privatization of LASCO apparently buoyed investors' confidence.

News also surfaced that LASCO wrote off three tankers that technically didn't belong to it. The process of unloading its aging fleet should continue in the future.

A rash of fresh corporate news brought life to Lithuania's otherwise sleepy bourse last week. Investors focused most of their attention on Lietuvos Telekomas and Vilniaus Vingis.

The bourse's benchmark Litin-10 price index rose 0.95 percent to 1290.70 points and the broad index Litin-G was up 0.36 percent to 931.23 points. The blue chip index Litin fell 2.83 percent to 270.64 points thanks mostly to losses by Lietuvos Telekomas.

The price index of six Lithuanian Baltic List shares ended the week almost flat, gaining just 0.1 percent to 159.77 points.

The bourse's equities turnover totaled to 5.18 million litas (1.47 million euros). Baltic List stock turnover reached 850,000 litas, 16 percent of the total.

Lietuvos Telekomas continued to lose ground as investor sentiment, dampened by the government's plans to offer 10 percent of shares in the fixed-line telephone monopoly as compensation to restituted property claimants, was further undermined by a downward revision of the company's 2002 profit forecast.

Lietuvos Telekomas last week cut its 2002 net profit estimate from 100 million litas to 70 million litas. The company gave no clear reasons for the decision.

The market reacted swiftly. Lietuvos Telekomas shares hit yet another record low of 0.79 litas during trading on Sept. 25. The stock later reversed some of its losses and ended the week at 0.83 litas, a 6.74 percent drop from the previous week.

Lietuvos Telekomas' turnover on the central market totaled 542,600 litas, and another 133,500 litas' worth of shares changed hands in block deals. Traders said activity in Lietuvos Telekomas shares is likely to slow down this week.

Shares in Vilniaus Vingis grew 3.94 percent to 6.60 litas on a turnover of 322,800 litas. News that the company would be added to the Baltic List on Oct. 1 lifted investor confidence.