Stocks still buffered from war

Though the war in Iraq was the primary focus of investors' attention last week, Baltic stocks remained steady, while shares of Ventspils Nafta behaved irregularly on news that the oil terminal will remain off Russia's export schedules for the remainder of this year.

Leonid Alshansky, chief analyst at Rietumu Bank, said he believes the economy might suffer from the war in Iraq.

"Yes, there will be consequences for Latvia's economy, but the harm will be less than for bigger countries," he said.

Sandigs Martinovs, financial analyst at Parex Bank, agreed. "Decisions from Russia normally affect [Latvian] stocks, but in this context stocks like LASCO could be affected very directly by oil prices," he said.

Last week Riga saw the price for Ventspils Nafta shares climbing for the second week in a row, despite negative news from Moscow.

Investors apparently bet that the oil terminal crisis, which has deepened with the news that Russian oil supplies are not to be expected in 2003, will be resolved. Martinovs said investors expected a decision favorable for the Ventspils port - most likely concerning privatization of the state's remaining stake (38 percent) in the terminal.

Also last week, Latvia's Finance Minister Valdis Dombrovskis announced that the ministry would not go through with its plans to apply a 10 percent tax on dividends, a decision praised by investors.

"This decision shows the government is ready for dialogue with market players to adopt the most optimal solution," Riga Stock Exchange President Guntars Kokorevics told the Baltic News Service.

Lithuania's Pieno Zvaigzdes dairy and Lietuvos Telekomas, up 8.3 percent and 3.3 percent respectively, were last week's pan-Baltic winners, while Lithuania's Vilniaus Vingis electronics and Ekranas television screens, down 11.8 percent and 8.3 percent, respectively, were the losers.

Estonia's Hansapank, the Baltics' largest stock by capitalization, was down 2.2 percent over the week to 15.45 euros.

In Tallinn, Eesti Telekom finished the week 1.3 percent higher at 5.41 euros in brisk trading.