July has turned out to be a busy month for the Latvian capital market. Total trading volume amounted to EUR 56.81 million (a 42.3% increase over the previous month), equity turnover contributing EUR 16.46 million (a 154.55% increase over June) and debt trading - EUR 30.35 million. Equity market capitalisation at the end of the month was LVL 261.75 million (EUR 462.99 million). In comparison to the close of the previous month, the market has lost some of its value (Dow Jones RSE index has dropped by 4.95%, and RICI index by 4.34%).
Latvijas Gaze was the top traded equity for the month: altogether, 2,767,881 changed hands, total trading volume amounting to EUR 12.17 million. The largest single trade was 2,689,261 shares, transferred between two investors (ITERA to Gazprom). For Gazprom, the deal has resulted in 25% ownership interest in the company.
Debt market continued to attract plenty of interest. 5 year Government bonds (to mature on March 24, 2005) were traded at total value of LVL 11.36 million; 2 year bonds with maturity on November 6, 2000 were traded at LVL 4.37 million worth. The value of the debt market was EUR 489.51 million.
A Week of Opportunities, organised by the RSE on the occasion of its 1000th trading session, resulted in a 40% increase in the number of submitted orders, prevailingly, from retail investors.
The listed companies have finished reporting their performance for the first six months of the year, and the Riga Stock Exchange is preparing its annual publication Guide to Listed Securities, which is a convenient reference for investors seeking for information about the economic standing of the country, the sectoral development and the listed securities.
Tallinn
As of July 20, the 100,000 discounted bonds of AS Eesti Telekom are listed on Tallinn Stock Exchange Bonds List. Estonian Telecom issued EEK 100 million (EUR 6.4 million) in one year bonds to yield 6.1%. It was the biggest public corporate bond issue in Estonia.
Estonia's Q1 2000 gross domestic product (GDP) grew by an annual 5.2%, which was in line with preliminary estimates, the Statistics Office said. GDP in current prices was EEK 18.7 billion (EUR 1.2 billion) and at constant 1995 prices EEK 11.7 billion (EUR 0.75 billion) at the end of the first quarter. It is compared to a fall of 10.2% in the first quarter 1999. GDP per capita in current prices was EEK 14.4 thousand (EUR 0.9 thousand).
Estonian privatisation agency received four bids for privatisation of 66 percent of shares in Estonia Railway. The bids were made by Baltic Rail Services, the consortium of U.S., British and Estonian companies; RER (Railway Privatisation People Ltd), set up by a group of leading Estonian businessmen; and the U.S. company CSX Transportation. Media has reported the subsidiary of the Swedish state railway, SJ International as the fourth bidder. The privatisation agency will select the companies for the second round of privatisation on August 16.
Vilnius
The NSEL trading results of July were the lowest this year. Share turnover was just over EUR 3 million. On 31 July, the Official List index LITIN reached its minimum value of this year equalling 455.92 points and was still declining at the beginning of August. Such market stagnation results not so much from the summer period as from the share tumble of Lietuvos Telekomas, the company with the largest capitalisation on the NSEL, which froze financial means of the majority of local investors and foreigners trading on the Lithuanian market. Until the end of July, the IPO price of LTL 3.15 plunged to LTL 2.48. The general meeting of Lietuvos Telekomas shareholders, which took place on 5 July, adopted the decision to convert the employee shares into the ordinary registered shares. On 23 August, the term of limitation for the employees to sell their shares to other investors will terminate.
With this date approaching, there are signs of panic in the trading of Lietuvos Telekomas shares. Despite the announcement that the company's profit for six months of 2000 advanced to LTL 176 million, the share price continued to go down rapidly. Employees of the telecommunication company bought 5% of the company's shares, at LTL 1.00 par. Having in mind that nearly 13% out of 25% of shares sold during the IPO were acquired by the EBRD and Lietuvos Telekomas Group, which are definitely not speculative investment, 5% that will enter the market will account for nearly a half of the real free float of shares sold during the IPO. This should significantly increase liquidity in trading of Lietuvos Telekomas shares. The effect on price is expected to be short-termed as the panic of small investors means great profit opportunities.
