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Stock markets: weekly report (August 13 - 20)

  • 1999-08-26
Estonia: Traders shed pessimism

Thanks to fresh news from Telecom, and speculation surrounding Optiva Bank, the Tallinn Stock Market tossed off its pessimism of early this week to move up on Thursday. The TALSE index rose by 0.47 percent to 114.61 points, but gainers and losers were tied. "If there was lack of interest and pessimism at the beginning of the week on the market, then most share prices rose on Thursday," Hansapank broker Romet Tepper said, explaining the change in market sentiment. There was plenty of news out on Thursday, and the most important news came with Telecom's January to June results. Telecom earned a 347 million kroon ($23.67 million) net profit in the first half of the year, while the group's turnover increased by 17 percent year on year, to over 1.69 million kroons. "The good results generated purchase interest among local investors," the broker said, adding that "Western investors saw this as a good opportunity to sell." Telecom stock ended the week at 98.25 kroons.

Shares in Optiva Bank were again very volatile in the outgoing week. On Wednesday the price went up by 5.38 percent to 11.75 kroons on speculation about the sale of a stake in the bank. "At these levels we could also see interest in the share going down," Tepper said. "As soon as the share falls under 11 kroons, hectic writing of call options will begin again." Optiva Bank stock ended the week at 11.70 kroons a share.

Hansapank's share price is supported by a forecast from Hansabank Markets that the share will achieve a level of 125 kroons, Tepper said. Tremendous earning results need to be seen to justify this level, as the price of the share fell by 0.60 percent to 82.50 kroons last week. The broker said that a slight purchase interest in Norma stock remained at the end of the week. The share, which rose by 0.68 percent against the previous Friday, closed at 44.10 kroons. Tepper forecast that the share would remain relatively stable during the next week as well. Half-year results were published by the EMV building group, whose second quarter result of a 6 million kroon profit may be regarded as good, the broker said. Fakto car trader released its 1.8 million kroon loss figure for the first half of 1999.

Tepper said that interest in EVP privatization vouchers is going to persist. He said that the price level of the vouchers is expected to rise to 0.35 kroons next week. "It is the result of a coincidence of four active groups of buyers - land privatization applicants, applicants for EVP loans, those subscribing to the Compensation Fund's next bond issue and speculators," the broker said. In four days the price of EVP vouchers rose by 1.81 percent to 0.34 kroons.

There may be increased interest in Uhispank's stock next week following a statement by Skan-di-naviska Enskilda Banken that it intends to increase its holding in the bank to a majority stake, just as it did last week with Latvia's Unibanka. Norma and Hansapank generated the biggest turnovers on the stock market in the outgoing week, at 10.9 million and 10.1 million kroons, respectively. On the supplementary list, the biggest turnover was 1 million kroons from deals in Saku brewery shares.

Latvia: Investors look to Unibanka, Ventspils Nafta

Last week shares in Latvia's Unibanka and Ventspils Nafta oil terminal were at the center of attention on the Riga Stock Exchange and are likely to remain so this coming week. The bourse's indexes moved little last week. The DJRSE cap-weighted index finished the week up 0.64 percent at 82.06 points, while the RICI price index slid 0.24 percent to 166.67 points. The DJRSE finished up due to the gains of large companies including Unibanka - up by 2.04 percent to 1 lat ($1.69), Ventspils Nafta - up by 2.04 percent to 0.50 lats, and Valmiera Fiberglass - up by 2.17 percent to 0.47 lats. Shares in the insurance company Balta posted the steepest rise of 14 percent to 3.20 lats, but turnover in the shares was a paltry 760 lats. Prices of a number of liquid stocks fell. Shares in Latvijas Gaze slid 1.17 percent to 1.69 lats. Latvijas Balzams' share price dropped 1.82 percent; Staburadze confectionery down by 4.35 percent and Riga Shipyard lower by 9.09 percent. However, it was Unibanka's and Ventspils Nafta's shares that dominated trading, with 237,000 lats and 425,000 lats respectively or more than 60 percent of total turnover.

Further movement of Ventspils Nafta's share price will depend on developments in Russia, particularly whether Russian oil companies will be forced to cut their exports through Ventspils in the fourth quarter.

Movement of Unibanka's stock will depend on investors' reaction to the news that Skandinavska Enskilda Banken has increased its holding in Unibanka to a majority stake. Most specialists believe it will have little effect on the bank's share price in Riga, primarily because SEB bought the shares in London. Nevertheless, it is difficult to call the news of SEB taking a majority stake in Unibanka as negative for the market. Unibanka's audited half year profit of 5.5 million lats was also reassuring, indicating the bank is likely to reach this year's 11.0 million lat profit target. Unibanka's intention to buy a Latvian bank is also unlikely to influence the bank's share price too much, according to Suprema Brokerage Director Roberts Idelsons, as the purchase probably will not increase the value of the bank for shareholders. Shareholders should then be wondering what are Unibanka directors' motives for such an acquisition.

Lithuania: Indexes up in light trading

Share prices rose on the Lithuanian National Stock Exchange in quiet trading last week, and brokers do not expect a sustained climb until the autumn. The Litin-10 jumped 4.32 percent last week to 1152.80, while the Litin was up 1.16 percent to 549.68 points. "Trading was moderate, you couldn't call it dead, but compared to the rally two-three weeks ago, it wasn't enough," PFM VB Vilfima broker Kestutis Kvainauskas complained. Hermis Bank broker Titas Sereika agreed: "Absolutely nothing new, low turnover and trading in only several shares."

On the central market, trading of shares in Hermis Bank and Snaige was the most active. Turnover of Vilnius Bank's shares was just 30,700 litas ($7,675), as its price slid 0.63 percent to 26.80 litas. The announcement by Skandinavska Enskilda Banken that it intends to increase its holdings in Vilnius Bank to a majority stake could send the bank's share price climbing next week.

Snaige's share price rose 1.05 percent to 31.70 litas on a turnover of 230,100 litas. The refrigerator manufacturer's shares are gradually moving to become one of the leaders of the bourse. The largest direct deal of the week, at 2.6 million litas, was in Snaige's shares. Hermis Bank's share price rose 6.47 percent over the week to 105.41 on a central market turnover of 526,800 litas. On the current list investors focused their attention on Ukio Bank's shares, forcing the price up 7.46 percent to 6.34 litas on a turnover of 800,700 litas.

Investors kept Lietuvos Energija at its usual price level of five litas on a turnover of 203,100 litas. Total turnover on the bourse was 48.34 million litas, with only 2.8 million litas of that trading on the central market.