In March, the major event at the RSE, doubtless, was the announcement of strategic integration with the HEX Group of Finland. HEX has offered to acquire over 75% of the RSE shares, and most shareholders have consented to transfer their shares to HEX. The HEX offer, though, is a conditional one: to proceed with the transaction, RSE has to obtain the Latvian Central Depository (LCD) shares (all the shares except for the state owned). The LCD shareholders also have consented to sell their holdings to the RSE. It is expected that the entire deal will be completed by the first half of this year.
The strategic co-operation with HEX Group is anticipated to improve the liquidity in the stock market, to broaden the investor base as well as to increase the visibility of Latvian companies in the international arena and to strengthen the Latvian capital market.
In March, the total Latvian capital market trading turnover was EUR 32.07 (LVL 17.99) million. Although, in comparison to previous months, the total value traded declined, the equity market trading amounted to EUR 6.15 (LVL 3.45) million, showing rise of more than 400% over February. Trading volume in Debt market stood at EUR 25.90 (LVL 14.53) million.
Price index RICI augmented by 7.42% or 13.03 points during the month, and it is pleasant to note that on the last trading session of March it reached the highest value in the last one and a half years. Moreover, RICI has been producing a monthly increase already six months in a row, and since that index has increased from 145.43 to 188.74 points (29.78%).
Capitalization index RSE Dow Jones, in contrast to RICI, diminished by 8.57 points or 4.72% to 172.95 points. The drop of index should be explained by Latvijas Gaze share price changes as it lost 11.49% of its value during March. Also, it should be said that from the beginning of the 2nd quarter, April 2, the index composition will be changed: all Official (2) and Second (10) list shares will be included in RSE Dow Jones, as well as in RICI index.
Tallinn
Trading activity was down in March by 32% with the TSE™s monthly turnover at EUR 25 million. TALSE index closed at 179.32 as a result of the monthly increase of 3.03%.
Estonia™s 2001 GDP grew by 5.4% whereas during the fourth quarter 2001 the growth was 5.7%. Analysts cited domestic demand as the dominant factor for the economic growth, adding continuously slow foreign demand may cause slowing of the country™s GDP in early 2002.
Estonia launched funded pension or the II pillar of the pension system as of April 1, which offers additional pension coverage by mandatory as well as voluntary contributions for new entrants to the job market and others that choose to participate. It is based on 2+4 principle, meaning 2% is paid by the employee on monthly basis while state adds an extra 4% to it.
Eesti Telekom said that the planned merger of its two strategic owners, Finnish Sonera and Swedish Telia is positive news for the Estonian telecommunications giant, although it will have no direct short-term impact on it. The combined group will possess a 49% stake in Eesti Telekom.
EBRD sold half of its stake in Hansapank, decreasing its ownership in the Estonia™s leading bank to 4.85%. Swedbank, the strategic owner of the bank has now 60.08% of its shares.
Vilnius
Trading on the Stock Exchange this month was noticeably more active. Securities turnover on the Stock Exchange was by 75% bigger than in February and amounted to LTL 149 million (EUR 43.2 million). Central market turnover improved by 41% reaching LTL 23 million (EUR 6.7 million). Total share turnover, showing an increase of 54%, came to LTL 40 million (EUR 11.6 million) and accounted for 27% in the total turnover. As compared with the previous month, trading volumes of Government securities, amounting LTL 109 million (EUR 31.6 million), augmented by 84%. Block transactions made up nearly 91% of this trading volume.
The upswing in the central market turnover was determined by trading volume of the Government securities which was four times bigger than in February. Share turnover by block transactions climbed from LTL 12 million (EUR 3.5 million) in February to LTL 26 million (EUR 7.5 million) in March. On the central market, the most active trading was carried out in shares of AB Vilniaus Vingis (EUR 1.6 million), whereas shares of AB Lietuvos Þemës Ûkio Bankas were most actively traded by block transactions (EUR 3.1 million).
During the accountable month, capitalisation weighted indices LITIN and LITIN-G improved by 7.6% and 5.5 respectively. This was influenced mainly by a considerable rise of share prices of AB Lietuvos Telekomas, AB Rytø Skirstomieji Tinklai and AB Vakarø Skirstomieji Tinklai, which have the largest weighting in the index.
In April, the new Law on Securities Market comes into force. The new law established a range of new provisions as compared to the currently valid law.
