On 12 June, 2000 Lietuvos Telekomas was admitted to the Official Trading List of the National Stock Exchange of Lithuania and the list of the Baltic blue-chip securities. On that day, the total market capitalisation of the Baltic List advanced by EUR 657.99 million. Since 1 July shares of Optiva Pank are removed from the Baltic List due to the admission of Lietuvos Telekomas to this list.
Latvian capital market, after the vivid trading activities in spring, was less lively in June. Total trading volume amounted to EUR 39.9 million, equity turnover contributing EUR 6.5 million and debt trading - EUR 33.4 million. Ventspils nafta remained the turnover leader (LVL 2 million or 55% of equity market turnover). Equity market capitalisation at the end of the month was LVL 276.39 million (EUR 488.3 million), which is 3.2% increase over the May-end figure. In debt market 1 year Government T-bill with maturity on December 1, 2000 and 2 year bond maturing on November 6, 2000, together with Svenska Eksportkredit corporate bond, were the top traded securities - turnover LVL 6.2 million, 5.2 million and 2.3 million respectively. Total value of debt market was LVL 284.5 million (EUR 502 million).
On July 5 the Riga Stock Exchange will celebrate its 1000th trading session. To mark the event, the RSE will launch a campaign, A Week of Opportunities, to promote stock market among retail investors and to encourage them to be more active in the market. The Riga Stock Exchange, Latvian Central Depository, banks and brokerage companies agreed to waive any commissions for the entire week starting on July 3.
On June 9 Securities Market Commission of Latvia approved amendments to the RSE Rules and Regulations aiming at promotion of mortgage bond segment at the Latvian capital market. The amended regulations facilitate listing of mortgage bonds on the Official list, thus giving the green light to domestic institutional investors to invest in mortgage-backed securities. Subsequently, it is expected that trading in mortgage bond secondary market will increase as well.
On June 29 Sampo Finance Ltd. and Central Bank of Estonia signed an agreement, according to which the Finnish banking and insurance group will buy 57.9% of shares in Optiva Pank from the central bank for EEK 214 million. Central Bank also obliged to carry part of the possible loss from realisation of risk assets in the sum of EEK 332 million. Sampo will make a take-over bid to other shareholders to acquire the rest of the shares in Optiva.
Estonian parliament adopted the law on central securities registry, to become effective as of 1 January 2001. The new law, one of the cornerstones of capital market regulations, sets the fundamental principles of securities registry, and regulates the environment on statutory level. The law on central registry provides grounds to expand the circle of account operators, which should increase competition on the Estonian securities market. The law regulates the use of nominee accounts in accordance with international practices, thus increasing especially foreign investors™ confidence in the Estonian market. The law marks a major step for Estonia towards the European Union. Estonian finance ministry is currently drafting the new Securities Market Act, which should bring the Estonian securities market regulations to a whole new qualitative level.
The initial public offering of the Lithuanian telecommunication company Lietuvos Telekomas finished on 12 June. Some 25% of the company's initial capital or 203,728,190 state-owned shares were sold to investors for LTL 3.15 per share. The rest or 81.8 million shares (10 % of the company's shares) will remain with the Lithuanian Government. During the first trading month share price of Lietuvos Telekomas depreciated to LTL 2.68. Nevertheless, those shares became the true leader on the market and their turnover exceeded EUR 6 million. Due to this admission the NSEL share capitalisation advanced by nearly 50 per cent.
On 4 July a Memorandum of Co-operation was signed by the National Stock Exchange of Lithuania and London Stock Exchange. This agreement, which supports the cross listing of companies, strengthens the relationship between the two exchanges by providing a framework for future collaboration. The recent London listing of Lithuanian Telecom is the first example of what both exchanges hope will be an increasing number of Lithuanian companies looking to London to raise international equity finance to complement listings on the NSEL.
